ORDERS OF THE DAY

Hon. Jim Ernst (Government House Leader): Madam Speaker, will you call Bills 2, 4, 6 and then the balance of the bills as listed on the Order Paper?

DEBATE ON SECOND READINGS

Bill 2--The Balanced Budget, Debt Repayment and Taxpayer Protection and Consequential Amendments Act

Madam Speaker: To resume debate on Bill 2 (The Balanced Budget, Debt Repayment and Taxpayer Protection and Consequential Amendments Act; Loi sur l'équilibre budgétaire, le remboursement de la dette et la protection des contribuables et apportant des modifications corrélatives), on the proposed motion of the honourable Minister of Finance (Mr. Stefanson), standing in the name of the honourable member for Swan River (Ms. Wowchuk).

An Honourable Member: Stand.

Madam Speaker: Stand? Is there leave to permit the bill to remain standing? [agreed]

Mr. Stan Struthers (Dauphin): Madam Speaker, I would like to take an opportunity to rise for a few minutes in the House today to speak about Bill 2, The Balanced Budget, Debt Repayment and Taxpayer Protection and Consequential Amendments Act.

I am going to try to outline some of the views especially from the rural communities in my constituency and hopefully some of the rural views on this bill that are contained throughout rural Manitoba. [interjection] As the member for Emerson (Mr. Penner) points out, I want to try to keep my comments very positive, as I always have throughout my tenure in the Legislature and from before that.

First of all, I do want to point out in as positive way as I possibly can that this Bill 2 is nothing more than a gimmick, and I want to assure the member for Emerson that that is the most positive way that I can put this.

First of all, it is a gimmick because of the record of this government over the last seven years. Over the last seven years, we have seen debts increase, we have seen deficits each year, we have seen cut-and-slash attitudes when it comes to funding programs that are needed by the people across Manitoba. We have seen deception in the forms of taxes rising and we have seen deception in forms of covering up the taxes that have actually been imposed on Manitobans.

Madam Speaker, let us be clear. Nobody on the face of the earth would stand up and say that balanced budgets are not a good thing. It is universally accepted that if you are going to be in a position of handling public accounts, the goal in your mind should be to balance budgets. I have no problem with that. My problem is that the hot air contained in Bill 2 does not in itself produce a balanced budget.

I want to point out that there are jurisdictions all over the world, including in our country, where these jurisdictions do not need to have balanced budget legislation in order to balance a budget. It can be done without the legislation. I point back in our history at different times when provincial governments and federal governments have indeed produced balanced budgets without this kind of draconian legislation.

I might sound like I am blowing my own horn, but Tommy Douglas did not use balanced budget legislations and stiff penalties for his cabinet ministers to produce one balanced budget after the next in the years that he was Premier of Saskatchewan. What the CCF in Saskatchewan used was good, old-fashioned common sense. They realized that money does not grow on trees; you just cannot go out and pick up a bunch of money from a tree and use it to pay off the expenses that a province has. The CCF in Saskatchewan approached their financial responsibilities with common sense and did not use this type of legislation to get the final result of balanced budgets.

The budget sounds good on the surface, but in reality there is no foundation. What I want to point out is that over the last seven years we have been treated to a government who cannot run a lemonade stand without running a high deficit. We have seen a government who cannot run a lemonade stand without a million-dollar feasibility study and we have seen a government who could not run a 25-cent-a-cup lemonade stand without some type of tax break to help them out.

I want to get members to think a little bit about farming these days and, in particular, farm financing and compare what happens in a farm situation with what this government is putting forth in Bill 2. Today, if someone was to start out farming, they would need a high outlay of capital at the beginning to get started. They might want to purchase some land, land these days running in the area of approximately $50,000 a quarter, depending on what the quarter section of land is made up of, but we can assume that an average of $50,000 for a quarter of land. And we all know that you cannot farm and raise a family in a profitable way on simply a quarter section of land. So you are looking at a lot more than one quarter of land at $50,000 per quarter.

The farmer would need to buy a tractor. Let us just say a medium-sized tractor would cost the farmer in the area of $70,000. Everybody knows that a tractor is an essential part of a successful farm operation. The farmer would also need to take his crop off, come harvest time. The farmer would need a swather in the range of $60,000, a combine which in many cases can run upwards from $100,000.

* (1440)

It becomes a very expensive venture, this farming business, a very expensive venture to start out with, which is one of the reasons why not very many new farmers are taking up the occupation of farming in Manitoba these days.

The main point, however, is that the outlay of capital at the beginning is great. The outlay of capital at the beginning is prohibitive, in many cases, to farmers starting out. So where is the farmer going to get this money to start out with?

First of all, in the fine farming tradition in rural Manitoba, the farmer is going to look for the best deal possible. The farmer is going to go from one farm sale to the next. The farmer will go from one auction sale to the next looking for good deals, looking for the best possible deal to bring his initial outlay of capital down.

If the farmer decides he is going to buy these pieces of equipment new, then he is going to go from one dealership to the next comparing what one dealership to the other is going to cost him and then opt for the best deal in terms of new equipment.

So there we have a farmer with a huge outlay of capital that he needs to make to get started in farming. Where is he going to get the money from? Well, there are some farmers who are fortunate enough to inherit this equipment from one generation to the next. There are those farmers who inherit the equipment and the land already.

Now these farmers, No. 1, are few and far between. These farmers may be fortunate enough that they do not have to come up with this outlay of capital at the beginning of their farm operation.

Another option, I suppose, could be to approach the government for some type of start-up funds that one government from time to time has come up with to start out younger farmers on their way to becoming full-time, permanent farming families in the rural parts of our province. That is always an option.

But of course the majority of farmers do not inherit money. The majority of farmers cannot get started solely on the basis of one government program or another. The vast majority of farmers needs to take out loans, usually sustaining high levels of interest, but they need to take out loans to get started.

So what we have in the province right now is the majority of farmers who have incurred some sort of debt at the beginning of their farm career and now are out in rural Manitoba farming away, providing the food that we eat on our tables all across the province.

Could these farmers have started out if they had not had the availability of loans to get started in their farming operations? I further ask, would these farmers, if they had to live under the conditions of Bill 2, have been able to get started in the first place? I propose to those listening in the Legislature that farmers would not have been able to get started if they had to live under the rules set out in Bill 2, the balanced budget legislation that we are debating these days here in the Legislature.

So right from the beginning, we can see that the provisions of Bill 2 are in fact counterproductive to what should be the fine objectives of providing employment through agriculture in our province. I want to also point out that even on a year-to-year basis, farmers need the loans in order to get the crops into the field, in many cases, to buy fertilizer and chemicals and the seed and granaries in which to store them and the final harvested grain that they take off the fields. Each year, from year to year, farmers begin their operations by taking out a loan once again. This is separate from the large capital expense that they have put out in equipment and machinery at the beginning.

Again, I would suggest that if the elements of Bill 2 were somehow included, if the farmer had to live by the rules of Bill 2, every year he would not be able to, or many farmers would not be able to, put the crops into the field. It is an investment. Farm communities, farmers understand what the word "investment" means. They understand what it takes in order to have a successful, prosperous farm operation. Those same principles should apply to those of us in the Legislature. Those same principles should apply to the government.

I want to talk, as well, about another example in which the proposals contained within Bill 2 would not make any sense. I have heard people from the government side of this House today, recently, during the last provincial election, even before the last provincial election, speak of how a family must balance its budget, implying that somehow the family would disintegrate or break up if they did not have a balanced budget.

Well, Madam Speaker, I would submit that, again, any Manitoba family would prefer to have its books balanced. They would prefer not to owe any money, but, if families did not, from time to time, take out some form of manageable debt, they would not survive either. Very obviously, a family needs a place to live. Families quite often will buy a home. Families very often will have to take out a loan to buy this home. I myself have a mortgage. Now where would families live if they could not have the option of taking out a loan and taking a mortgage out in order to buy a house? Should not the same principles that we are talking about in terms of family apply to Bill 2? I would submit again that if families throughout the province had to live according to the proposals within Bill 2, the family situations across our province would be very grave indeed.

Madam Speaker, families in our province, from time to time, need to buy cars. I know for myself, I could not just walk into a bank, slap down a cheque for a car of any kind, not even an inexpensive one, without taking on some kind of debt. I would have a plan to pay off that debt, and I would not take on a debt that is much too far out of my possibility of ever paying it off. That is what we have got right now. It may be that I need my car in order to find employment, in order to maintain my employment. That becomes an investment, so the loan that I take to buy a car becomes an investment in order for me to get a job and to maintain that job. That investment or that debt enables me to be a productive citizen of Manitoba's society. Now if I had to live within the proposals here on Bill 2, I would not be able to take on that debt for a car and become a productive citizen of Manitoba.

Let us talk about investment families make in education. Some families have an opportunity to put money away over a period of time so that their sons and daughters can use that money, access that money at some point to go to some level of post-secondary education, college, university, whatever. Some families can do that. I submit that there are not a lot of families, however, in a position where they can take a lot of their cash on a monthly basis and put it towards a child's education throughout that child's life. What we have to remember is that we represent all the people of the province of Manitoba, not just those who can afford to put money away for their children's education.

* (1450)

Now these are the kinds of things that families deal with on a day-to-day basis: education, transportation, housing, the very basic needs, food, heat, all that sort of thing. How is a family going to raise money in order to maintain the basics of life and also have a little fun while they are doing it? Well, again, a family could inherit a lot of money. Not many families in Manitoba inherit big potfuls of money which would sustain them for the rest of their lives. Those are the kind of people, though, that this Bill 2 is designed to protect. The vast majority of families in this country and certainly within this province are more in the stage of providing this investment on their own. Most families do not have silver spoons in their mouths; most families do not have the luxury of inheriting potfuls of money; most families have to try to survive month to month, and those are the people that I think MLAs in this Legislature should be standing and supporting.

How else could a family raise money? Maybe they could win a lottery? Well, there are not too many in this province who end up with bank accounts full of lottery money. Maybe the members across the way would suggest that they should pump loonies into VLTs and maybe, in that way, they will win enough money to send their kids to school or to buy a house or to buy a car, because this bill, if it would apply to families, would not allow families to incur some sort of small, manageable debt that they could use in order to invest in the family and the children of the family.

Maybe another suggestion would be that the people within the family should get second jobs. Maybe they could send grandmother out to work with the City of Winnipeg or they can send the youngest daughter out on paper routes. Maybe those are ideas that the government finds acceptable. Maybe we can put the children to work. That is also something that would be acceptable underneath the rules of Bill 2.

That leaves one more--just a quick brainstorming here--avenue open for any family in Manitoba, and that is to take out a loan. It happens all the time. It is a daily occurrence. Families take out loans for one reason or for another. Under Bill 2, this government is trying to tell us that families should not do that. Well, I think it is perfectly acceptable for a family to invest in itself and I also think it is perfectly acceptable for this government to invest in the people of Manitoba. The provisions of Bill 2 will curb the ability of this government to do just that.

The last specific example that I want fellow MLAs to think about as we consider Bill 2 is the plight of students. Young people all across this province who graduate from school based on their hard work, if they want to go on to the post-secondary level, many of them find that one of the barriers is the high cost of post-secondary education. So right off the bat, the student has a choice to make: Do I want to go to school and pay that kind of money or do I want to take the chances of not going to school and not having to pay the high tuition, the high cost of books and, specifically for rural families, the high cost of room and board as you send your sons and daughters from rural Manitoba into the city?

Now, how are the students going to raise this kind of money in order to invest in their future and become contributing members of Manitoba's society? Well, again, maybe that student is lucky enough to inherit a bunch of money from a rich uncle someplace, or another good possibility is to marry into money. Maybe a student can find some money for education doing that. How many students across this province, though, to speak in terms of reality, are fortunate enough to inherit that kind of money? I would suggest very few are in that sort of position today in Manitoba. Again they could play the lotteries, they could play VLTs. Chances are though they are not going to win. Chances are they are not going to get enough money in order to afford to go to university, and chances are they are not going to find a summer job in which they can actually pay for their universities.

Again we are left with one more possibility and that is the possibility of getting a loan in order to pay for education. Again under Bill 2, if Bill 2 and the propositions involved in Bill 2 were applied to university students, then what would happen was that you would see a very drastic cut in the number of students going to university as, I would suggest, we have seen in recent times.

I want to take a moment, Madam Speaker, to address the referendum section of Bill 2, and I want it made perfectly clear that this is the part of Bill 2 that protects those in Manitoba society who already have it made. This is the part, I think, of Bill 2 that protects the rich.

In the bill, referendums are required if the government wants to increase the income tax, the corporate tax, the sales tax and the payroll tax. I want each and everybody here to realize that that is a protection of the people in society who already have a lot of money. It leaves the door wide open for attacks on the middle-income group and the group in the low-income strata of Manitoba society.

In the reading that I have done on Bill 2, I came across a tax lawyer who indicated that the loopholes for wealthy people that are found in Bill 2 are wide enough to drive a truck through, and as this truck goes through the loopholes, he aims at the lower-and middle-income earners in this province and runs them down.

Bill 2 leaves the door wide open to broadening further the base of the provincial sales tax, something that this government has already accomplished in its 1992 budget. It is bad enough that we have a 7 percent provincial sales tax; it is even worse that the Conservative government would broaden that tax to include baby's clothing and books and other things in society. That is a very sneaky, underhanded way of raising taxes.

Bill 2 leaves wide open, as well, the possibility of new taxes which would not require a referendum according to this legislation, this Bill 2.

* (1500)

Another area that I am concerned with is that Bill 2 says nothing about the elimination of property tax credits. This is something that has already been done by this government. It has already been reduced once, I believe, in the budget of 1992. It was sneakily called a cut rather than being called what it was and that was an increase in taxes. People's taxes increased as a result of the action of this government with property tax credits. Bill 2 does not say that the government cannot do that again. There is still room for this government to eliminate or further reduce the property tax credit from where it is now.

So that is why I claim that this bill is nothing more than a gimmick. It is good window dressing, but when you look right into the bill and what it can and cannot allow this government to do, it becomes a sham.

Another part of the bill that I have some concerns with and I have been approached by many of my constituents on is the ability that Bill 2 gives for this government to use Crown corporations, specifically the selling of Crown corporations, to balance the budgets.

I have to ask the question, how honest is this? We have in this province assets. We have some assets that are actually worth something. We have assets in this province that belong to all the people of Manitoba.

When a child is born, it has been suggested that automatically as they are born they have a certain amount of debt attached to them, but it makes sense and it is logical to assume that that same child has a certain amount, a certain number of assets, provincially owned, that they are born with as well. It is not fair just to suggest that that child, when he or she is born, only has the debt, because it is an absolute fact that they do have assets that they are born with as well.

It is also not fair for this government to come along, take those assets from that child, sell them off and use those assets to try and balance the budget.

I want to make as a specific example, Madam Speaker. I want to talk--[interjection] Permanent depression is a result of cuts to Brandon Mental Health Centre, not what the member for Lakeside (Mr. Enns) is talking about.

I want to specifically talk for a minute about one of these Crown corporations, one of the assets that each child is born into Manitoba with, and that is the Manitoba Telephone System.

Now, what we have seen over the past short period of time is a splitting into four of Manitoba Telephone System. My worry is that that makes the whole corporation easier to sell. For me, I am worried that it also makes parts of the corporation easier to sell.

The other concern that I have is that the balanced budget legislation that is being proposed here puts governments, even this one, into a straitjacket, not allowing us to invest in some of the things in our province that have paid off over the long run, like the floodway. Think of how many millions of dollars the government in the '60s saved Manitoba over the long haul in flood claims. Think of all the money we saved by investing some money at the front end. This government is saying that no future government should have that option available to it. It is a straitjacket.

I want to touch a little bit on the amount of trust and accountability involved in Bill 2. I want to point out that maybe, Madam Speaker, it is necessary that this government have some kind of legislation controlling itself because it certainly does not appear to be able to do it on its own. It was quite amazing, I think, to people of Manitoba when they realized that the same government that talks a lot about fiscal responsibility had a $762-million deficit one year, the highest in the province's history, but what we find out later is that that was not even the worst of it; a year later, they had an $819-million deficit. That is what you added to the debt. What did you tell the people of Manitoba? Well, you told the people of Manitoba that year you had a $330.5-million debt. Oops! It takes the Provincial Auditor to step in and tell the truth on the reporting of your own deficits, so maybe you do need this legislation to control yourselves, but I would suggest that most governments would not need this kind of straitjacket.

As I think of the material that I have read having to do with the balanced budget legislation and this government's fiscal performance, headlines jump out at me that suggest that Tories flunked math test, that Tories came out with an $819-million deficit one year and reported $330 million. What kind of trust can the people of Manitoba put in the financial integrity of a government that would do that? Budget fantasy is another headline that pops out from the pages that I have read. Members of the government, former members of the government themselves have called into question the accounting practises of this government. Does it make sense or is it acceptable for a government to drain the Lotteries surpluses and use that to bring down the deficit? Is that acceptable? Are those acceptable accounting practices? I do not think so. The Provincial Auditor does not think so, but this legislation, Bill 2, allows the Finance minister to do pretty much anything he likes to produce a balanced budget. That is in the area of honesty and trustworthiness.

What about another angle here? Where does this balanced budget leave health care? Well, I can speak from recent actions of this government in which the health care of Dauphin has been absolutely negatively impacted by cuts that were made by this government.

Madam Speaker, $1.4 million has been cut this year from last year out of the budget of the Dauphin Regional Health Centre. Now, that is without this kind of draconian legislation. What is going to happen in years down the road when the pressure is really on this government, when the federal transfer payments do start to kick in and bite, and they are going to be massive, we know that.

What is going to happen to health care when the choice of this government and particularly this cabinet is between funding health care or getting their own salaries reduced by 20 or 40 percent? I think that spells tough times in the area of health care.

What about education? We have seen cuts again in education this year. We have seen that without this legislation being in place even today. What is going to happen when this legislation comes in and starts to force even more and massive cuts to our public schools?

Madam Speaker, it reminds me of a farmer who has a pig. This pig is a grand champion at all the fairs in the area. The pig is famous. He is in all the newspapers and on television and radio. The farmer is interviewed because his pig is such a good one.

* (1510)

When somebody came out to see this pig at the farm, there he was living a glorious life in a pigpen. He is well fed and watered. He is safe. He is secure. He has got everything he wants, everything that a pig would want. He has only got three legs though. Somebody asks the farmer, why does this pig only have three legs? The farmer gave much the answer that I think this government would give: Why eat him all at once?

That is what is happening in education, in health care. You are taking apart different departments one leg at a time. My worry is that what is going to happen--my worry about this legislation is that once it is in place we are going to start taking apart every department of the Manitoba government one piece at a time, much like the way the farmer was taking the pig apart.

I think what we have to do is look long term as opposed to short term. This balanced budget legislation, Bill 2, is very much a short-term, knee-jerk reaction to what has been happening across Canada and throughout the world.

When we lose millions of dollars in transfers from the federal government in the upcoming years, what is going to be the reaction of this government? What is going to be the reaction of the government in terms of child poverty? Will this government then turn and look at some long-term effective ways to battle child poverty? It does not do it now, and there is no legislation here.

Child poverty does not rate highly on the priority list of this government now, so when they are faced with the provisions of Bill 2, I would suspect the child poverty and any kinds of programs designed to help reduce the poverty, any program that would at least take us off the front of the parade when it comes to provincial provinces and their records on child poverty, I would suspect that this legislation will be very negative in terms of any kind of long-term strategy in fighting child poverty.

I also wanted to express my worry in terms of a government who would fund the losses of a hockey team, and we are stuck with those for the next year, if this legislation is put in place. We already have a government reluctant to fund to an acceptable level areas of health care and education and other areas, notwithstanding the amount of money we are going to put in to a hockey team in this province. I think that the government is absolutely abdicating its responsibilities.

Just to wrap up, I want to encourage this government to learn from the past, learn from governments who have balanced budgets without this kind of legislation. I want them to learn from the Californias of the world where this legislation has caused deep concerns, and I want this government to use a little bit of common sense when it comes to the financial management of this province's debt and deficits and expenditures and revenues. Thank you very much, Madam Speaker.

Ms. Rosann Wowchuk (Swan River): Madam Speaker, I would like to take this opportunity to put a few comments on the record with respect to Bill 2, the balanced budget legislation. I would like to speak in the context of this government's record on balanced budget and budget performance over the past few years. I would also like to speak about the impacts of this legislation and also some of the myths that are out there about what this legislation will do.

Madam Speaker, we believe that when you look at this legislation, we have to look at it in the context of how we run our family finances. If we really, really look at this, all of us would like to balance our budgets every year, but in actual fact that is not a reality and it cannot happen.

If we were to do our day-to-day business in that way, many people would never have the ability to own a home or to get an education or, within the farming community, buy a farm and invest in it, within the fishing community, major investments that have to be made and all of those things. If this legislation was applied, we believe it would be so restrictive that families would not be able to function.

So, Madam Speaker, as I say, we believe that to work towards the goal of a balanced budget is a good goal to work towards, but there has to be a realistic understanding that it cannot always happen.

Under this legislation, a poor family would never be able to make progress, and really it would only be the rich families who would be able to, without borrowing, buy a home, because in actual fact very few of us who sit in this House have the ability to buy a home with cash up front or buy a car or any of those things. We have to be able to borrow and take out a mortgage, whether it be on a home or on our land, and spread that debt over many years. For farmers to be able to buy a combine, which is a major piece of equipment right now, if you wanted to buy a new combine, you would be looking at somewhere between the range of $100,000 to $150,000. Now that is a tremendous amount of money and considering where the farm economy is right now and considering the blows that the farming community has taken from the federal government with respect to the removal of the Crow benefit and other support programs, certainly farmers are under additional hardship. But even in a very good year it would be beyond most farmers' wildest dreams to be able to purchase a piece of equipment like that without financing, without spreading the cost over a few years, over many years, in fact.

This legislation if applied to a family farm would restrict them completely from growing in their field of employment. Very few farmers would be able to pay for their children's college education under this. I know there are many people in this Legislature whose children are just coming to the age of entering university and some who have already put their children through university, and the majority of us would not have been able to do that, to support our children, if we had to pay for it within the one-year budget. Without being able to borrow money and spread the costs over many years, it would be again, Madam Speaker, the wealthy who would be able to provide their children with an education.

Under this legislation it would only be the wealthy who would be able to continue their growth and prosperity and anybody from lower-income families under this legislation would not have the ability to finance various things that they need in order to improve their economic situation.

The Tories claim that this bill will put economic growth on a sound footing and protect taxpayers. We, as New Democrats, disagree. We believe that this is very unbalanced legislation, and it will endanger the economy and close the doors on a positive government action. It is also full of gimmicks and tricks that will allow the government to take advantage of taxpayers rather than protecting them.

There are some myths in this legislation that I would like to address, in particular the myth that since you balance your budget every year, why should not the government. Well, as I had indicated earlier, Madam Speaker, in actual fact very few people do balance their budget every year, very few people. You can have a budget all set up and have things well planned out and then it may happen that you just have to buy a new car. If that is not within your budget, does that mean for that year you do not drive a car because you cannot balance it anymore?

Mr. Kevin Lamoureux (Inkster): You have to do it every so often.

Ms. Wowchuk: Certainly. The member for Inkster (Mr. Lamoureux) says you have to do it every so often, and I agree, every so often, but that is long-range planning. You should not be restricting it to each year that there has to be a balance. I guess that is where I commend the Saskatchewan government in their legislation in that they have at least looked at long-range planning and they are balancing their budget over a four-year period, and that gives some room for flexibility to carry over things.

* (1520)

This particular legislation, Madam Speaker, is very Draconian. If it applied to a household, certainly the average family would not be able to buy a car and pay for it in one year, so they would be out of luck under this legislation. I am in that situation, and I know the majority of the people that are on this side of the House are in that same boat where they would not be able to buy a car. There are many other people outside, and people in the farming community, as I have indicated, would have great difficulty under this legislation.

Again, the only people who would be able to go to university would be those who do not need a student loan, and when we look at ourselves within this House and look at people in our community, there are many who would not be able to operate, not send their children to university.

The majority of us would not be able to buy a house unless they were able to pay for it in cash. Now if people were not able to buy houses, what would this do to the whole economy of the province? What would happen to the construction industry? What would happen to our unemployment rates? They are high enough as it is, Madam Speaker, and we would end up seeing our unemployment rates go higher.

I referred to farmers. Farmers would not be able to operate nor would fishermen. Now I think about the logging industry and the people within the Swan River Valley right now, many who are hoping to get jobs in the forestry industry with the harvesting of wood. Again, if this kind of legislation was applied to the people who are hoping to invest in logging equipment or trucks, they would not be able to participate or have the opportunity to take any of those jobs, because this legislation, if applied to them, would deter them from investing. No one would ever invest in their future under this pay-as-you-go approach. This would be impossible for the average person to live with.

The other myth that we hear about this legislation is that this balanced budget legislation will protect taxpayers from greedy governments by requiring a referendum before taxes are raised. Well in fact, Madam Speaker, there are many, many loopholes in this legislation that will allow the government to raise money without holding a referendum. In fact, we could see property tax credits reduced without a referendum. You could see user fees applied to various administrations, something we have seen under this administration already, but we would see more of that. We would not see protection from that under this legislation.

We could see the goods and services tax applied by this provincial government. We could see the sales tax spread over an even broader base than this government has done in previous years. Again, those taxes could be raised without this government holding a referendum. So to say that the taxpayer is going to be protected from increased taxes is an untruth, Madam Speaker, because if this legislation passes, there are many loopholes that would allow the Finance minister to change the level of taxes, broaden the base. In fact, these taxes would hit most hard on low- and middle-income people while the government could end up giving great tax loopholes to corporations.

The other myth, Madam Speaker, is the idea that cabinet ministers will act responsibly because, with this legislation, if they do not balance the budget, they will lose a salary. I think we could see the ministers actually punishing the poor and cutting programs in order to keep their budget in line just so they would not lose their salaries.

(Mr. Gerry McAlpine, Acting Speaker, in the Chair)

The only way, for example, that the Family Services minister could protect him or herself from a salary cut would be to reduce welfare rates. Those are the dangers that are in this legislation. There is no way to ensure that, in order to balance the budget, the average person is not going to be hurt.

The ministers would have the ability to cut whatever they had to out of their budget in order to protect their own salary. I look at the Department of Agriculture. If it were the Minister of Agriculture (Mr. Enns) who wanted to underspend, you have to question: What kind of programs would we see cut? Would those support programs that have just been announced by the Minister of Agriculture to help to diversify the agricultural community, value-added jobs, would those programs have to be cut in order to save the minister's salary?

Mr. Acting Speaker, I feel that it is a myth under this legislation that the ministers would be held responsible because their salary would be reduced. To save face and to save their salary, they would reduce whatever they had to within that budget. It would be the poor and low-income people who are going to be the ones that would suffer.

The other things we hear is that it is tough medicine, but balanced budgets in every year are essential for a healthy economy in the province. Balanced budgets sound like a good idea, but in reality it is not a new idea. It is a very old idea, and we have seen attempts at this practice before.

Throughout the century, there have been politicians who have attempted to balance budgets. When we look back, during the recession, there was a Premier by the name of John Bracken who made balanced budgets his highest priority. During that time, we had the depression and high unemployment extended for more than eight years. We saw work camps. We saw the economy of the province just driven right down, so here we have a prime example. At a time when the government should have been investing in the economy during the depression, trying to get the economy going--there was a real opportunity for the government to get out--the priority of the Premier at the time was to balance the budget and in actual fact drove the province into a very serious recession, a prolonged recession.

We have to be prepared to invest in our province. We have to be prepared to invest in the future of our children, and there are times when government has to do those kinds of things. The myth that if we do not balance our budget every year, we will leave our children with a crushing debt is also an untruth, because there have been examples where Premiers have had the foresight to take the steps, to make investments in this province. The investments have paid off.

There is nothing wrong with borrowing money and investing wisely and laying a foundation for a secure and cross-productive future. During the Second World War we saw examples of this. During the Second World War, we saw where a Premier, Doug Campbell, put the province on a pay-as-you-go basis. Little was spent on schools and on hospitals, very little was spent on infrastructure. By the time the 1950s came around we saw that there were real problems.

Certainly there was a Premier from the Conservative Party, Premier Duff Roblin, who did have a vision and he was prepared to invest. One of his investments was the floodway. He was prepared not only to invest in the floodway, but Mr. Roblin said, who can say what the monetary cost is of not building roads and schools and hospitals? His government was prepared. There was a Conservative who did not need to bring in balanced budget legislation because no government needs balanced budget legislation.

If the government has the will to balance the budget, they will do it without legislation, but I digress, Mr. Acting Speaker. I was referring to a Conservative Premier who was prepared to invest and take out long-terms loans. He started the process of building roads and schools and hospitals, and certainly he invested in the Winnipeg floodway, which cost a tremendous amount of money at the time. He was prepared to invest, just as Premier Schreyer in his day was prepared to invest, in the health and welfare of this province.

* (1530)

There are still marks of the work that was done under Premier Schreyer, but unfortunately actions taken by this government are destroying the healthy economy that we had, the investments that were made in schools and in hospitals under previous Premiers, such as Premier Schreyer, are being destroyed by this government. We are seeing our health care system gutted by this government.

We are seeing our education system progressing to a system where it is, again, only the wealthy who will get an education.

This legislation will not address the needs of our young people. This legislation will not maintain Manitoba as a wealthy place where our young people can continue to live and prosper. This legislation will restrict all of those things, Mr. Acting Speaker.

I think that when this government talks about balanced budget legislation, they should really look at their record because I think that their record is in fact very poor. This government had many opportunities to bring in a balanced budget if they so chose without this legislation.

Mr. Acting Speaker, I want to quote from the Crow Wing Warrior from Morris, Manitoba, certainly not a place that has strong supporters of--[interjection] A hotbed of socialists, as my colleague says. A very strong Conservative area, but in this article it says, and I quote: It took the Filmon government seven years to finally get around to the balanced budget and legislation to ensure such budgets. During those years, the Filmon government ran deficits including the all-time record deficit of $745 million in 1992-93.

In fact the Filmon government once had the golden opportunity to give Manitobans a balanced budget a long time ago when the Fiscal Stabilization Fund or rainy day fund was created. During the initial years of the Filmon government, they turned away from balanced budget in favour of running a deficit.

Where was this idea of balanced budget legislation? I have to think, Mr. Acting Speaker, that this somehow came about just to have some idea before an election, and it sounded good. I go on: The Filmon government used what would have been a surplus to create a rainy day fund. The deficit was run in order to make up for the surplus used to create the fund.

One line that Premier Filmon likes to use is that New Democratic Parties and Liberals voted against his government's balanced budget legislation last March prior to the election. Filmon tries to create the illusion that the opposition are nothing more than free-wheeling, tax-and-spend politicians. That is amazing considering the Premier was responsible for the all-time record deficit of $745 million.

As Leader of the Opposition, Gary Filmon stood in the Legislature to vote against the budget that would have provided the province with a surplus of $58 million. A surplus, imagine that. This Conservative government when they were in opposition voted against the budget that would have had a surplus. Hypocrisy at its finest. In 1988 NDP Finance Minister Eugene Kostyra tabled what would have been a balanced budget according to the Provincial Auditor's office. Mr. Filmon and his Conservatives stood against a balanced budget and now they are bringing in legislation because it sounds good. In today's day, it sounds good, but in actual fact, Mr. Acting Speaker, although it sounds good there are more loopholes in this legislation to raise taxes than this government will admit, and this legislation that they are proposing is very draconian and will hurt the poorest of the poor in this province.

And I go on with this article: And what of the balanced budget Premier Filmon and Mr. Stefanson have? It is full of leaks, this editor says, a balanced budget, a rare infusion of $145 million from the federal government as part of a readjustment to transfer payments, a balanced budget which does not account for the coming cuts totalling $245 million, thanks to the same federal government. A balanced budget from a government depending on $230 million to be made off gambling in this year--$230 million from gambling, that is what this government proposes to balance their budget with, Mr. Acting Speaker.

As the Filmon government prepares to pass their balanced budget legislation they should keep in mind one thing: The serious flaws in the March budget are so bad Premier Filmon and his cabinet ministers might all be $20,000 short in their pocket. As I say, this is taken from a paper in Morris, Manitoba, people who are strong supporters of the Conservative government, but even those people who are strong supporters of this government are being very critical of this government for creating--[interjection] No, the people are being very critical of this, the editor, but I am surprised that government members and the member for Morris (Mr. Pitura) who has read this editorial, I am sure, has not stood up and put his comments on the record as to the views of his constituents with respect to this legislation.

So, Mr. Acting Speaker, there are very serious concerns with this legislation, and I think that this legislation will cause a downturn in our economy. If this legislation were to apply to a family, families would not be able to function, and I think that there are many myths. This was legislation that the government brought forward before the election because it sounded good. The government should, if they are bringing this kind of legislation forward, be looking at--

Mr. Acting Speaker, I would hope that the government would reconsider what they are bringing in in this legislation, because I feel that it will have very negative effects. If we were to apply the same kind of legislation to our family operations, it could not work. It would be impossible for families to function. A farming family could not function--

The Acting Speaker (Mr. McAlpine): Order, please. The Chair has recognized the honourable member for Swan River. Those members who wish to indulge in conversation would do so outside the House or in the loge. I will continue to recognize the member for Swan River to continue with her remarks and ask members to give her that time to have her say.

Ms. Wowchuk: Thank you, Mr. Acting Speaker.

If this legislation were to apply to a family, Mr. Acting Speaker, and a family got into a serious financial situation, it would result in them having to sell off their assets to pay off their bills. We do not want to see governments having to sell off their assets to pay off the deficit, and we do not see how this can work.

* (1540)

We saw in 1994, this government sold McKenzie Seeds, a money-making Crown corporation, and manipulated that sale so that the proceeds could be put into the 1995-96 expenditures. We see them create slush funds.

So, Mr. Acting Speaker, with those few comments, I want to say that I have serious concerns, as our party does, with this balanced budget legislation. If we were to apply this to a family situation, it would not work. I also feel very strongly that if the government has the political will to balance budgets, if that is their political will, they can do it without legislation. There is no need. They can operate. Just as this government has the ability to run up debts right now when they want to support the Jets, they can run up that debt. If they have the will to pay off, to balance the budget and have a good record, they can do it. It has been done. The government should take a look at the examples of previous NDP governments. Look back at the governments that were in Saskatchewan. Look back at what Roy Romanow did in writing down the debt created by Grant Devine. He did not have balanced budget legislation, but they had the political will to treat people humanely and also address the concerns of debt that was created by Conservatives.

This government has run up great debts, and they have that ability. There are ways to do it humanely and treat people well without cutting back on hospitals, without destroying the education system and without putting a burden on the poorest of the poor in society. They have that ability to do that, Mr. Acting Speaker, without legislation, but it takes political will. Unfortunately, this government has a very narrow vision. They do not have the vision that previous premiers had, such as Premier Schreyer and Premier Duff Roblin, just for a comparison of both. Those premiers saw that it was important that you invest and you make long-term investments for the future of this province.

That is not what we have seen when we listen to what the government has done with roads in areas where people do not vote right, according to some of them. We see that this government does not have the will, and I believe, Mr. Acting Speaker, that even with this legislation we will not see--with this legislation, if it passes without amendments, we will see a deterioration in the quality of life of people in rural Manitoba, in all of Manitoba. We will see the poor and the middle-income people suffering even more than they are. We will see the wealthy prospering because it will be the wealthy that we will see loopholes created for, and it will be on the poor that we will see the government expand their tax base on, which they will be able to do without a referendum. We will see the programs cut because ministers who are going to be losing $20,000 of their salary are going to make all the cuts they have to to ensure that they are not the ones that suffer, and it will be the poor that will suffer. We will see social programs cut. We will see education cuts, and we will see health care cuts.

There is a much better way to do this. The government does not need this legislation. What they need is the will, and I hope the government will recognize that they have many opportunities to create a better life for people in Manitoba rather than increasing taxes and cutting back on services, as we have seen under this government. Thank you, Mr. Acting Speaker.

Mr. Jack Penner (Emerson): Mr. Acting Speaker, it is with some trepidation that I rise today to address this subject simply because of many of the things that the opposition members have said about this legislation, and in my view the complete lack of understanding of how government should function, how the business community functions and how business principles can be and should be applied to the operation of government as well as any other economic activity that is viable over the long term.

For that reason, I cannot help but reflect over the past since the time that I started in business myself, into the business of farming. Some of the things that the member for Swan River has stated in her remarks just now caused me some great concern, because I know that she and her husband also farm in the Swan River area, and she left the impression, as a number of the opposition members have from time to time, that government would be restrained from taking positive initiatives to address periodically situations of economic concern, whether they be child poverty, whether they be health care issues, whether they be transportation initiatives, infrastructure initiatives and those kinds of things.

The reason I say it appears that there is a complete lack of understanding about business principles is something that I think has been prevalent in the socialist ranks ever since they took government and became a party of some consequence in this province and I think when we go back as far as the Schreyer administration demonstrated clearly their lack of understanding on how you should apply those economic principles in the operation of government.

I remember well, and it is some 20 years ago, when many, many people in this province, and most of those comments were generated by then-members of the Legislature, said that governments should not really worry about borrowing money, because principals really did not have to be repaid. A lot of the economists of the day at the time said something similar. They said it was silly to apply taxation to buy down the debt.

In other words you could keep on borrowing and borrowing and borrowing, and that is true, Mr. Acting Speaker. That is true if you are willing to apply under the same principles increased taxation and increased taxation and increased taxation in order to maintain your revenues to offset your deficit.

Now, they certainly were masters at applying those increases on a regular basis, because they certainly did borrow unendingly, even though their revenues increased very dramatically in some years and they had surpluses generated during those years, but did they apply the principles of true business to government? No.

That is what concerns me about the remarks that the honourable member for Swan River made and many remarks that opposition members have made in this debate.

(Madam Speaker in the Chair)

It demonstrates clearly a lack of understanding of what this legislation will and should do. There are no restrictions, Madam Speaker, on borrowing in this legislation. Government can borrow if they can demonstrate that at the end of the day they can raise enough revenue to offset the borrowing, the same as any farmer or any businessman or anybody else can from time to time.

* (1550)

It appears to me that the reason we really need this legislation, Madam Speaker, is to guard against the ruthless, unprincipled, unmanaged governments that we have seen in the past. I would suggest to members opposite that had they truly applied business principles to the operation of government some 20 years ago when they ran very significant surpluses, and the government of the day, of course, made every attempt to spend every dollar they could to make sure that all the money was spent instead of putting some of this money into a rainy-day fund or a bank account or as you and I would call it, Madam Speaker, a savings account so that when revenues in fact fall, as we all know they do once in a while, you could write a cheque on your savings account and at the end of the day balance your books.

The lack of the knowledge and understanding of those business principles cause us now to have to introduce legislation that will put a great deal of liability on those politicians that are now espousing we do not need this legislation, that when they want to change this kind of legislation to follow their archaic principles of economics that would cause them to have to go before the public in a referendum to make major changes to this kind of legislation-- therefore, Madam Speaker, this legislation should stand loud and tall. This is why people in all parts of Manitoba support this kind of legislation because they want some form of law to be applied to those ruthless spenders on the other side of the House. We have heard nothing but, nothing but saying, spend more, spend more, spend more. In other words, bring on the Binx truck, the Brink's truck--sorry about that, Mr. Clerk, I did not mean to use your name in vain.

I say to you that I really do believe that the Brink's truck is something that the honourable members opposite, when they were in government, used far too often. They unloaded at the backdoor without having any recognition of the need to put some in the front door from time to time to ensure that next time there would be something to unload.

So, Madam Speaker, I would suggest this whole matter of legislation before us is as simple as running my farm. When my wife, Dora, and I first got married we really did not have any money. We did not have any land, but we did want a farm. See, we did want a farm. This is what the honourable members opposite do not understand.

We went to the bank. We said to the bank, you know, in order for us to be able to make a living for the two of us, in order for us to build a base, to raise a family, we asked them whether they could borrow some money. You know what the banker said? The banker said, well, if you can demonstrate to me that over a 20-year period you can raise enough money off of that farm and earn enough on that farm to repay not only the principal but also the interest and are able to demonstrate that you can make your living off of it at the same time, I would consider borrowing you some money.

You know what, Madam Speaker, that principle is enshrined in this legislation. That is exactly what this legislation said, that in order for a government to spend more in any given year you have to go back to the banker. You know who the banker is? The people of Manitoba. You have to ask the banker whether they are willing to put more money into your operation, so the monies that need to be raised need to come from the people that are going to pay the bill at the end.

This legislation clearly states that in order for politicians to make promises to constituents during elections on education, on health care, on child care, on highways, on anything else, they better ask their banker.

Some Honourable Members: Oh, oh.

Madam Speaker: Order, please.

Mr. Penner: I really did not want to excite the honourable members opposite to the point of them standing in the aisle and wanting to sort of raise the roof. I know we have a light shining from above and that really reminds me, Madam Speaker--and I know that we are not allowed to bring exhibits into the room, and I really do not want to, but this whole issue of balanced budgets and the reasons for this legislation bring me back to a principle that is age, age old.

It really got me to thinking about an apple, a nice, shiny, red apple. By the way, this apple was grown in Winnipeg. It is a Manitoba-grown apple.

Madam Speaker, I am going to put the apple away, but the apple reminded me of a story, a Biblical story where Eve held out an apple to Adam and said to Adam, if you will, I will give thee. And that is really the principle that should be applied to government, because politicians are so vulnerable when it comes to during election times or just prior to election times that they will from time to time promise far more than their economy can deliver. So Adam found himself in a position that after he partook of the apple, he found himself in a position that he could not remedy himself of later, and so are governments the same way.

I say to you, the opposition members want a free, open door that they can make promises to Manitobans without having any fear of financial retribution and responsibility at the end of the day, and that is why we need this kind of legislation, to prevent ruthless politicians from going out on the hustings during a campaign debate or other areas and saying to the electorate, we will give you anything you want, we will borrow enough money to pay for it, we will not care whether we ever repay the debt or not.

But what we refuse to tell the electorate at the same time is that the interest clock is going to keep on ticking, and at the end of the day you are going to pay $640-650 million a year in interest costs. We will take that out of the mouths of children, sick people and those people who need highways, and we will give it to the banks, and that is the principle that the opposition members want to maintain.

I say to you, Madam Speaker, that principle can no longer be applied. This legislation clearly demonstrates our will and our desire as a government to ensure, to put an insurance policy in the hands of the electorate and say to them that when we need to spend more money than we have, we will come to you and ask you how much we can spend.

I will stand on any platform anywhere in this province and defend the principles of this legislation to no end. Thank you, Madam Speaker.

* (1600)

Madam Speaker: I wanted to get clarification as to whether the member for Emerson (Mr. Penner) wished to continue debate on this when this matter is again before the House or whether indeed he sat down because I stood up because it was four o'clock.

The honourable member for Emerson will have 24 minutes remaining when this matter is again before the House.

The hour being 4 p.m., as previously agreed, time for private members' hour.