April 22, 2003

Budget 2003 increases support for northern housing, employment and training, health, transportation and economic development initiatives that reflect the priorities identified in partnership with northern residents and communities, Finance Minister Greg Selinger announced today.

"Manitoba’s Northern Development Strategy is based on the conviction that the priorities, strengths and experiences of northern residents should guide local development," said Selinger. "In this budget we are building on the strengths of the region to provide greater opportunity for northern Manitobans and their families."

Budget 2003 recognizes that education is the foundation of an effective economic strategy. The budget commits $10 million for training initiatives to help ensure northerners are in a position to benefit from the proposed construction of new Manitoba Hydro generating stations. The money is the first stage in a proposed $60 million training initiative involving the province, the federal government and Manitoba Hydro.

"This training program is being developed in consultation to ensure northerners benefit from the development of clean and renewable hydro resources," Selinger said. "Construction of the proposed three new generating stations would be among the largest capital projects in Manitoba and would result in significant long-term economic benefits for the North."

Budget 2003 also allocates funds to establish the University College of the North, a creative new approach to skills training with an emphasis on flexible course options and delivering programs close to home.

Selinger said removing barriers and creating more learning opportunities for young Manitobans is a top priority of Budget 2003 which also:

• doubles the interest-free period on Manitoba student loans from six months to one year;
• provides a 10 per cent tax credit of up to $1,000 per student for employers who provide a work placement for a co-op education student;
• cuts the middle income tax rate by six per cent, saving Manitobans $40 million annually;
• maintains the 10 per cent reduction in post-secondary tuition fees; and
• provides further investments for expanding colleges, universities and apprenticeship training.

Budget 2003 supports health care and builds on three priority areas identified by Manitobans: investing in medical equipment and upgrading facilities; training and retaining professionals; and fostering innovation in health technology. Today’s budget continues the progress with:

• more funding for the northern regional health authorities (RHAs) of Norman, Churchill and Burntwood;
• new funding for Burntwood RHA to further tackle diabetes;
• construction of the new Garden Hill dialysis unit is underway;
• new resources for the Northern Patient Transportation Program;
• support for the physician resource plan;
• new ambulance service for Flin Flon;
• $47 million for needed medical equipment and training;
• construction set to begin on a new CT scanner for the Pas and a new ultrasound scanner will go into operation in Churchill;
• more support for home care;
• funding additional new beds at Snow Lake Personal Care Home; and
• new resources for prevention of fetal alcohol syndrome.

"The number of physicians and nurses has increased in Manitoba in the past four years and today’s budget provides additional support to recruit and retain health care professionals, an issue of particular importance to people living in northern and remote communities," Selinger said.

Budget 2003 contains increased federal funding provided in response to the Romanow report which will help maintain the health care system. Budget 2003 also adds Pharmacare coverage for new drugs such as Gleevec and Pegetron, effective May 1. Deductibles will be raised slightly July 1--between $1 and $5 monthly for most beneficiaries--to help address a projected 26 per cent increase in drug costs this year.

The Northern Development Strategy recognizes the critical importance of transportation and this is reflected in Budget 2003 which provides $1 million towards the continued operation and promotion of the rail line serving the Port of Churchill. Churchill is Canada’s only deep-sea arctic port facility and plays an important role in delivering prairie grain to overseas markets.

"Churchill has a strategic economic and national role for both Manitoba and Canada," Selinger said. "The rail line provides important linkages to remote communities in Manitoba and Nunavut. The port and rail line also play a vital role in the region by supporting important industries like mining, hydroelectricity, forestry, fishing, tourism and trapping."

Selinger also noted the province has supported such recent transportation initiatives as the construction of air terminal facilities in Island Lake, God’s River, Oxford House and Lac Brochet as well as runway extensions at Red Sucker Lake, Brochet, Lac Brochet and York Landing.

In addition, $6.5 million was recently put towards replacing an old air ambulance jet which provides life-saving transport each year to more than 500 people living in dozens of remote communities.

Budget 2003 builds on this ongoing commitment to transportation with funding for the second year of a five-year, $600 million highways initiative adding to the $75 million spent on northern highways since 2000.

Additional investments in northern economic development include:

• funding for the expansion of the Northern Forest Diversification Centre in The Pas, helping residents harvest, process and market non-timber products;
• providing $37 million for road construction and maintenance; $11.6 million for airport and marine operations, maintenance and capital; and $5.8 million for winter road operations;
• recognizing hydro as a cornerstone of economic development with the consideration of three new northern generating stations and the pursuit of an east-west power grid to increase export sales;
• continuing the Mineral Exploration Assistance Program;
• supporting eco-tourism in Churchill and other northern communities with more funding for tourism promotion; and
• introducing a new Community Enterprise Development Tax Credit to help local communities pool local savings to support local investment.

Selinger said the province will continue to build on its hydro advantage for the benefit of northerners and the entire Manitoba economy. Manitoba Hydro’s low-cost, renewable, reliable power gives businesses a competitive edge, while Manitobans enjoy the lowest electricity rates in North America. Selinger said the province is proud to have recently equalized hydro rates so that Manitobans now pay the same low power rate regardless of where they live. That move saves northern and rural residents about $14 million a year.

Of vital importance to all Manitobans is drinking water quality and Budget 2003 continues support for initiatives that help ensure that water remains safe. Selinger noted over the last three years, 45 northern communities have benefited from $26 million in improvements to drinking water and waste water treatment systems.

Other initiatives supported in Budget 2003:

• increased water quality monitoring through the Office of Drinking Water;
• a 70 per cent subsidy for private drinking water tests; and
• ground water testing of 1,000 wells in agricultural areas.

The budget also supports such initiatives as $6 million more for child care, an increase in general social assistance rates and the full restoration of the National Child Benefit. In 2004, families on social assistance with children 17 and under will receive the full benefit.

Today’s budget supports other community-building measures by:

• fully restoring grants to the Manitoba Association of Friendship Centres;
• supporting renewal programs like Neighbourhoods Alive!, which recently funded a child care centre and homeless shelter in Thompson;
• funding the RCMP up to full complement;
• providing $500,000 more for Community Places to improve recreation across the province;
• supporting improvements to rec centres in The Pas and Dauphin;
• increasing funding for northern libraries by 13 per cent;
• designating a new provincial park; and
• adding new resources to further address the recommendations of the Aboriginal Justice Implementation Commission.

The budget also noted Manitoba is one of only two provinces to achieve four consecutive years of private investment growth. Other highlights include:

• Job creation is averaging 8,000 new jobs per year since 1999 compared to an average of 3,000 per year for the previous decade.
• Unemployment and youth unemployment rates are the lowest in the country, with a record 69.2 per cent of working-age Manitobans participating in the labour market.
• Manitoba’s credit rating is higher today than in 1999, recently upgraded by Moody’s Investors Service to Aa2, tied for second in Canada.

Budget 2003 reduces personal income taxes by lowering the middle income rate by six per cent, starting Jan 1, 2004. This new tax reduction brings the total personal income tax cut to $220 million annually since 2000, the largest four-year reduction in personal income taxes in Manitoba history. A one-income family of four earning $60,000 will pay $1,400 less annually in 2004 than in 1999.

Selinger noted that northerners also share in other tax cuts, including:

• the maximum Education Property Tax Credit for seniors will rise to $800 from $775, up from $625 since 1999, an increase of 28 per cent; and
• the Education Support Levy on residential property will drop an additional 20 per cent this year saving homeowners $17.1 million annually.

Budget 2003 also offers tax measures aimed at stimulating business growth:

• corporations will now be exempt from paying corporation capital tax on the first $5 million of capital;
• the Manufacturing Investment Tax Credit will be extended and broadened to encourage business to invest in energy-friendly equipment and power sources;
• our four-year plan to cut general corporation income tax rates continues, falling from 17 per cent in 1999, to 15.5 per cent in 2004 and 15 per cent in 2005, the first cut in this rate since the Second World War; and
• the income threshold for the small business tax rate will rise to $360,000 in 2004 and $400,000 in 2005, building on a 37 per cent reduction in small business taxes since 2000. Manitoba’s five per cent small business tax rate is fourth lowest in Canada.

The budget projects a balanced budget of $10 million in accordance with balanced budget legislation. For the fourth straight year, the province will commit $96 million to paying down the debt and pension liability, supported by a $48 million draw from the Fiscal Stabilization Fund.

"This budget works for all Manitobans, in every region of the province and in all our communities," noted Selinger. "Working co-operatively with Manitobans, we are striving to provide more opportunities today while building for the future."

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