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February 7, 1975 ALBERTA HANSARD 475

LEGISLATIVE ASSEMBLY OF ALBERTA

Title: Friday, February 7, 1975 8:00 p.m.

[Mr. Speaker resumed the Chair at 8 p.m.]

MR. MINIELY:
Mr. Speaker, I have received certain messages from His Honour the
Lieutenant-Governor
which I now transmit to you.

[The House rose.]

MR. SPEAKER:
The Lieutenant-Governor transmits estimates of certain sums required for
the service
of the province for the 12 months ending March 31, 1975 and recommends the
same to the
Legislative Assembly. The Lieutenant-Governor transmits Estimates of
certain sums
required for the service of the province for the 12 months ending March 31,
1976 and
recommends the same to the Legislative Assembly.

Please be seated.

head: GOVERNMENT MOTIONS (reversion)

6. Hon. Mr. Miniely proposed:

Be it resolved that the messages of His Honour The Honourable the
Lieutenant-Governor,
the Estimates and all matters connected therewith be referred to the
Committee of
Supply.

MR. MINIELY:
Mr. Speaker, I beg leave to table a copy of the Estimates of Expenditure
and move that
the messages of His Honour the Lieutenant-Governor, the Estimates, and all
matters
connected therewith, be referred to the Committee of Supply.

[The motion was carried.]

7. Hon. Mr. Miniely proposed:

Be it resolved that this Assembly approve in general the fiscal policies
of the
government.

head: BUDGET ADDRESS

I. INTRODUCTION

Mr. Speaker, on March 17, 1972 I was privileged to present to this
Assembly the first
Budget of our government in Alberta.

This fourth budget of our government reflects our success in achieving new
directions
and new priorities in Alberta.


476 ALBERTA HANSARD February 7, 1975

This budget reflects the strong financial position Alberta now enjoys and
the great
economic success which the province has enjoyed over the past three years.

This budget reflects our commitment:

that all Albertans - our senior citizens, our wage earners, our farmers,
our
small businessmen, our handicapped - must share equitably in the
province's
natural wealth and great opportunities;

that all Albertans on fixed incomes and those not in a position to secure
adequate gains in incomes must be protected from rising prices and costs,
and

that Alberta's natural resources be managed wisely to ensure the future
prosperity of all Albertans and to provide opportunities for meaningful
and
imaginative pursuits by young Albertans.

This budget, Mr. Speaker, provides a balanced response to the social and
economic
needs of 1975 and the future of our province.

II. ALBERTA'S ECONOMY

Mr. Speaker, I would like to outline briefly Alberta's economy. Despite
international
economic problems and a distinct slowing of the Canadian economy during
1974, the Alberta
economy registered a boom year. Final data is not yet available for gross
provincial
product in 1974, but a number of economic indicators support this
conclusion.

Employment Opportunities for Albertans

In the area of employment opportunities for Albertans, although Alberta's
labor force
expanded at a record rate during 1974, employment opportunities expanded
even more
rapidly. During the last quarter of 1974, 96,000 more Albertans were
employed than in the
same quarter of 1971. As a result, Mr. Speaker, Alberta had the lowest
unemployment rate
in 1974 of any province inCanada, and the lowest in this province since
1967. Alberta
has achievedthis low unemployment rate while providing employment for a
larger percentage
of the working-age population than any other province.

Increased Income for Albertans

Average wages and salaries in Alberta advanced at record rates during 1974,
providing
substantial real income gains for a large number of Albertans. Although
price increases
for consumer goods have been large, inflation has been less severe in
Alberta than for
Canada as a whole. We are concerned, however, with the effect of inflation
on personal
incomes. This concern is reflected in the programs our government has
introduced since we
assumed office, and which we are expanding in this fourth Budget.
Another major source ofpersonal income for many Albertans is farm income.
In 1973,
Alberta farmers' realized net income was more than two times as great as
it was in 1971.
A further increase, Mr. Speaker, of 40 per cent is expected for 1974.

A Broader-Based Economy for Albertans

Mr. Speaker, one of the objectives of our government has been a broader-
based economy
for Albertans. The value of manufacturing shipments advanced by about 20
per cent during
1974 as plants constructed earlier began to come on stream. Since 1971,
employment in the
manufacturing sector has expanded by more than 23 per cent; a more rapid
rate of advance
than any other sector, with the exception of retail and wholesaletrade.
Expansion in the
service industries, 16 per cent since 1971, has further increased job
opportunities for
Albertans.Preliminary estimates indicate investment spending in Alberta
increased by 24 per
cent in 1974, rising faster than any other demand category. Primary and
construction
industries had the greatest rate of increase in the business sector in
1974, but
manufacturing investment in 1974 was more than two and one-half times the
level in 1971.
The value of retail trade advanced by 19 per cent through the third
quarter of 1974
indicating strong growth in consumer expenditures. This reflects both the
large increases
in employment and incomes for Albertans, and a high level of confidence in
the future of
our province.


February 7, 1975 ALBERTA HANSARD 477

Alberta's Economic Potential and Challenges

Alberta's prospects for continued strong growth and our capacity to
provide meaningful
employment for our residents in the future are important as we look ahead
to the last half
of the 70s. The government's industrial strategy and economic goals and
objectives were
set forth extensively by the Premier last October in his remarks to this
Legislature.

Opportunities

Opportunities exist for expansion and diversification of our existing
economic base:

by continued orderly development of our natural resources;

by further upgrading our natural resources in areas such as petrochemicals
to
expand our manufacturing sector;

by continued expansion of our service industries, and

by using these opportunities, Mr. Speaker, to strengthen the regional
balance of
activity within our Province.

Alberta can play a leading and important role in the Canadian economy by
utilizing our
advantage as natural resource producers to assume an important role in
manufacturing and
service industries.

External Pressures

Developments in the Alberta economy take place in the context of the
Canadian and
international economic climate. Host industrialized nations currently face
balance-ofpayments
problems, inflation and serious problems in maintaining output growth. To
date,
the Canadian economy has fared better than most other industrialized
nations in sustaining
employment and output due, in large measure, to the significant volume of
domestic crude
oil production.
At the same time, inflation has continued to accelerate around the world.
In Alberta
we have taken many steps to offset the rise in prices for those
individuals such as senior
citizens and others on fixed incomes who are not in a position to secure
compensating
increases in incomes. This, Mr. Speaker, is the most effective action for
a provincial
government to take.
It must be borne in mind that increased real incomes for individual
Albertans can be
achieved in the longer run only by increased productivity. Business, labor
and government
cooperation in this task are necessary if we are to realize the potential
in the Alberta
economy.

Mr. Speaker, I would now like to turn to Alberta's financial position.

III. ALBERTA'S FINANCIAL POSITION

Before proceeding to the specific 1975 budget measures, it is important to
outline to
Albertans the magnitude of the change in Alberta's current financial
position. Hon.
members will recall that because of the uncertainties and important
negotiations
surrounding the price of oil, as well as the pending policy on oil
royalties, I presented
the 1974 Budget on a basis which excluded additional royalty revenues to
be generated by
our new royalty provisions and our efforts to obtain higher prices for
crude oil. On this
basis, I presented a budgetary cash surplus of $19 million and an overall
cash requirement
of $128 million. Our latest forecasts, Mr. Speaker, for the current fiscal
year, again
excluding proceeds from the oil export tax and incremental crude oil
royalties, are
summarized in the following table. On this basis, and after allowing for
special
warrants, I anticipate a budgetary cash surplus of nearly $90 million and
an overall cash
surplus of about $25 million for the 1974-75 fiscal year.
The expected outcome for 1974-75 and the Budget which I am presenting this
evening,
reflect the striking improvement in Alberta's financial position which has
taken place
since we assumed office in 1971. Mr. Speaker, after running budgetary
deficits
consistently from 1965-66 to 1972-73, I estimate the result of our first
three budgets
will be a cumulative budgetary surplus of approximately $225 million. I
would stress
again that this does not take into account the incremental oil revenues or
the oil export
tax proceeds.


478 ALBERTA HANSARD February 7, 1975

Total Financial Position of Alberta

Mr. Speaker, taking into account our current estimate of all General
Revenue Fund
revenues, including incremental oil royalties and oil export tax proceeds,
I estimate the
combined income and capital surplus will reach $1.3 billion by March 31,
1975. Four basic
factors have contributed to Alberta's improved financial position:

first, tax revenues have been nearly doubled, reflecting the rapid growth
which has
taken place in the Alberta economy;

secondly, budgetary oil and gas revenues have nearly tripled, reflecting
our energy
and royalty policies;

thirdly, incremental oil revenues, reflecting the higher prices we have
obtained for
Alberta crude oil and our royalty policy that a substantial share of the
additional
revenues should be claimed for present and future generations of Albertans,
and

lastly, improvements, Mr. Speaker, in financial management and responsible
expenditure
policies have controlled growth in expenditures to a lower rate than
growth in
revenues.

The government's financial position, Mr. Speaker, presents an historic set
of
circumstances for designing the 1975 Budget. The large revenue surplus
could be used in a
number of ways.

The challenge has been to design a budget which:

reflects Alberta's financial strength;

maintains continued confidence in the Alberta economy;

responds in a responsible way to Alberta's social needs in 1975, and

promotes the future well-being and prosperity of all Albertans.

I now would like to turn, Mr. Speaker, to the Budget measures.

IV. PERSONAL AND CORPORATE INCOME TAXES

In view of the additional natural resource revenue accruing as a direct
result of our
government's energy and royalty policies and the resulting strong
financial position of
the province, we have two very important personal income tax reductions to
propose in this
budget.

Personal Income Tax Rate Reduction

Effective January 1, 1975 we are proposing that the Alberta personal
income tax rate
be reduced to 26 per cent from 36 per cent of federal basic tax. Albertans
will now enjoy
the lowest personal income tax rate in Canada.

I estimate this 28 per cent reduction in Alberta personal income taxes
will increase
disposable incomes of Albertans by $115 million for the 1975 taxation year
at a time
of substantial increases in the cost of living.

The average tax reduction for each Alberta taxpayer is approximately $140.

For an average family of four with wage and salary income of $10,000 the
annual tax
savings are $98.

Taxpayers will begin to receive the benefits of the tax reduction in July
when the
source deduction tables are changed.

This substantial tax reduction, Mr. Speaker, is a logical and equitable
way to provide
the benefits of Alberta's resource wealth directly to Albertans.

It will provide also additional incentives for private initiative by
individuals and
the increase in disposable incomes will provide significant stimulus for
the Alberta
economy.


February 7, 1975 ALBERTA HANSARD 479

The government believes that it will be possible to maintain this position
regarding
personal income tax only so long as oil and natural gas revenues maintain
their current
levels. In the event that world prices for crude oil or natural gas
decline, or in the
event that the federal government takes further action to jeopardize these
revenues,
higher personal income tax rates may be required in the future to finance
our normal
budgetary expenditures and at the same time maintain our position of
having no sales tax
in Alberta and the lowest property and gasoline taxes in Canada.

Selective Personal Income Tax Reduction for Lower Income Albertans

Mr. Speaker, in addition to the benefits provided by the general reduction
in personal
income taxes, we are proposing a selective tax reduction for lower income
Alberta citizens
to provide $8 million in additional benefits to an estimated 270,000
Albertans with
taxable incomes below $4,000 - one third of all Alberta taxpayers. The
measure will
mean that 100,000 Albertans with taxable incomes below $1,400 will no
longer pay any
provincial income tax. At taxable incomes above $1,400, the benefit is
reduced gradually
so that taxpayers with taxable incomes above $4,000 will receive no
benefits from this
selective measure. The combined effect, Mr. Speaker, of the general and
selective tax
reductions is to reduce Alberta income tax by 64 per cent for individuals
with taxable
incomes of $2,000 and by 39 per cent for individuals with taxable incomes
of $3,000.

In addition to the two measures proposed above, the following significant
tax
reductions will be in effect for 1975.

The Alberta Renters' Assistance Credit

The expanded Alberta Renters' Assistance Credit which was introduced for
the 1974
taxation year will continue in effect for 1975. Hon. members will recall
that the credit
has been expanded in three ways:

1. eligibility for the credit has been broadened to include all rented
residences
subject to general property taxes;

2. the level of benefits was approximately doubled, and

3. the minimum benefit for most eligible renters is $50.

This tax credit will provide very substantial relief to lower income
renters in
Alberta from the increases in rents now being experienced. In addition to
the other tax
reductions, this program will provide $125 to a renter with $5,000 taxable
income and
monthly rent of $250.

Other Personal Income Tax Reductions

In addition to the measures outlined above, Albertans will enjoy
reductions in
provincial income taxes as a result of certain measures introduced by the
federal
government which we are passing the full benefits of to Alberta citizens.
I estimate that
as a result of our passing on to Albertans the full benefits of indexing
of the provincial
personal income tax, Alberta taxpayers will save approximately $35 million
in 1975.
Other measures such as the interest-dividend deduction, the pension
deduction and the
Registered Home Ownership Savings Plan also will reduce provincial taxes
for Albertans in
1975 by an estimated $15 million.

Business Tax Incentives

Mr. Speaker, as I outlined to the Assembly on January 29, we are
proceeding with the
development of very significant new Alberta business tax incentive
measures to encourage
the growth of small Canadian and Alberta-controlled businesses in our
province,
agricultural processing and diversification of our economy.
We are hopeful, Mr. Speaker, that some of these measures can be
implemented for the
1976 taxation year, possibly under the Tax Collection Agreement. In this
respect, I am
encouraged by the indication that the Minister of Finance for Canada is
prepared to
consider relaxing the conditions under which the federal government would
agree to
administer changes in provincial income tax systems.


480 ALBERTA HANSARD February 7, 1975

V. EXPENDITURE PROGRAM

THE RECORD

Mr. Speaker, I now would like to review the accomplishments of our
government. The
four budgets presented by our government have achieved the new directions
and priorities
for which we received a mandate in 1971. I would like to review briefly
tonight the
positive record of this government in implementing these new directions
and priorities.

A. FINANCING OF LOCAL GOVERNMENTS

Major new assistance to municipalities was contained in the Alberta
Property Tax
Reduction Plan introduced in January 1973. The emphasis of the plan was to
lessen the
extent to which social programs are financed from the local property tax.
This was
accomplished in two basic ways:

the Province assumed all financial responsibility for hospitals and local
health
units, and

the education foundation levy on residential property was reduced
significantly
by means of direct refunds to home-owners, personal income tax credits to
renters
under age 65 and grants to senior citizen renters.

In our 1974 Budget, the Alberta Property Tax Reduction Plan was extended
by removing
completely the education foundation levy on all residential property.

In addition to our programs to reduce property taxes directly, we have
increased
unconditional municipal assistance grants to municipalities and have
provided new programs
to meet special needs such as transportation and recreation.
Mr. Speaker, our four-year record with respect to assistance to
municipalities is
unparalleled in any other Canadian province. We have accomplished:

1. $247 million in direct property tax reductions and indirect property
tax reductions of
$33 million. The available data would suggest that property taxes on a
typical threebedroom
home in Edmonton and Calgary virtually will be no higher in 1975 than they
were in 1971. Mr. Speaker, taxes on residential property are lower in
Alberta than in
any other province in Canada.

2. $180 million has been provided by way of unconditional assistance
grants.

3. Over $300 million has been provided for health and social services,
transportation,
recreation and other programs at the local level.

4. The provincial share of financing the School Foundation Program has
increased from 66
per cent in 1971 to 88 per cent in 1975.

B. SENIOR CITIZENS

Mr. Speaker, in the area of assistance to our senior citizens, in our
first and
subsequent budgets we were determined not only to relieve the inflationary
pressures being
felt by senior citizens but also to increase government programs for this
important group
of people who have contributed so much to the life we now enjoy.
I am pleased to announce tonight that we have succeeded, since we formed
the
government, in providing a total of $200 million in programs for senior
citizens compared
to $25 million in the prior four years. The most significant of the
programs introduced
by our government for senior citizens have been in the areas of free
medicare and other
medical benefits, housing, the Assured Income Program of $235 per month,
shelter
allowances, and the elimination of the school tax levy on senior citizens.
These programs
make Alberta the preferred province for senior citizens.

C. OUR ECONOMIC BASE

We have undertaken initiatives to broaden and strengthen our economic base.

1. Expenditures in agriculture to restore the viability of Alberta's
primary agricultural
industry and to encourage processing of agricultural products in Alberta
have
increased by 258 per cent since we formed our government. In addition,
outstanding


February 7, 1975 ALBERTA HANSARD 481

agricultural loans and guarantees have increased from $37 million in
September 1971,
to $344 million in December 1974.

2. We also stressed the importance of Alberta's manpower and the need to
provide more
training opportunities. To this end we have increased operating budgets
for college,
technical and vocational education by 100 per cent since 1971. We
introduced a
manpower planning capability to ensure that Albertans would have the
greatest
opportunities for new jobs.

3. Our first four budgets have provided $586 million for roads, almost
double that which
was provided in the prior four years. This expenditure has developed an
Alberta
transportation system to support our broadened and strengthened economic
base. In two
years our support of urban transit will have reached over $35 million.

4. A fundamental concern of this government is to maintain and improve our
quality of
life. Since 1971, the operating budget of Alberta Environment has
increased
sevenfold. A total of $7 million has been provided for new sewer and water
assistance
programs. An additional $60 million has been provided in our capital
budgets for
resource conservation and water resource development projects. Already 55
communities
have put in place or are constructing overdue water and sewer facilities
and an
additional 42 communities will be serviced in 1975.

5. At December 31, 1974, the Alberta Opportunity Company had approved and
committed $52.3
million under its programs to promote growth and diversification of the
Alberta
economy, with loans averaging $113,000 to assist small Alberta businesses.

D. DIRECT ASSISTANCE TO INDIVIDUAL ALBERTANS

Mr. Speaker, in the area of direct assistance to individual Albertans,
within this
context of an expanded economic base we have been successful in providing
direct
assistance to those Alberta citizens who need it most. I have already
mentioned our
programs for senior citizens.

1. Our government, through the Alberta Housing Corporation, has broadened
and expanded
housing programs, particularly for Native and other rural Albertans and
for senior
citizens. As a result of this effort, Mr. Speaker, 13,999 housing units
will have
been made available to Albertans under our four budgets, compared to a
total of 7,513
units in the prior four years.

2. We have provided a total of $11.4 million to improve pensions paid by
the Workers'
Compensation Board to permanently disabled workers and their dependants.
This has
improved the benefits by 57 per cent and further improvement is being
proposed.

3. Important reforms in mental health that started in our first year have
been followed
through in each budget, with a total increase of 80 per cent over four
years.

4. The special programs in education for the handicapped which we
introduced have been
continued and increased. In the Department of Health and Social
Development,
expenditures for the handicapped have increased by 164 per cent over four
years.

5. To assure continued excellent health care for Albertans, support for
our health system
has increased by 106 per cent since 1971-72.

6. In the area of education, we have succeeded in reordering priorities.
In this period,
expenditures for college, technical and vocational education have
increased by 100 per
cent, while grants to schools have been increased by 92 per cent and
universities have
increased by 51 per cent.

7. We have announced several new programs to assist cities, towns, rural
areas and group
associations to develop and operate parks and other recreational
facilities. We have
committed $11 million for support of the 1978 Commonwealth Games. Not
including our
new program for development of major cultural and recreational facilities,
expenditures for municipal and provincial parks and recreational
facilities have been
increased by 452 per cent.

8. For those who receive public assistance, basic allowances have been
increased in two
years by 33.4 per cent to offset the effect of inflation in housing, food
and
clothing. We have announced that payments will be reviewed in February of
each year
to ensure that these citizens will not suffer because of inflation in the
future.

9. To complement the provision of better housing for our Native citizens,
our government
has undertaken a program to develop better sources of drinking water,
particularly for
the Metis colonies. A total of 725 water systems will have been provided
by the end
of the coming fiscal year, at a cost of $3,135,000.


482 ALBERTA HANSARD February 7, 1975

10. Expenditures for law enforcement, correction and rehabilitation have
more than doubled
in the last four years.

Mr. Speaker, due to the energy and royalty policies of the Alberta
government, these
impressive programs have all been accomplished not by increasing taxes -
but at the same
time, substantially reducing tax burdens on Albertans.

THE 1975-76 EXPENDITURE PROGRAM

The budget I am presenting tonight reflects the concern of this government
to provide:

measures to offset increased costs of living for Albertans;

assured income and housing for our senior citizens;

substantially increased assistance to Alberta municipalities;

improved social programs for Albertans, and

continued strength and diversification of Alberta's economy.

A. MEASURES TO OFFSET INCREASED COST OF LIVING FOR ALBERTANS

The impact of inflation, particularly on the cost of our social programs,
requires
several important adjustments in our expenditure programs for the
forthcoming fiscal year.

1. Assistance to Persons on Fixed Incomes

This budget recognizes the need to ensure that the real income of persons
dependent on
fixed incomes is maintained.

a) Workers' Compensation Board Payments: An additional $2 million will
provide for a
further increase of approximately 33 per cent in compensation payments for
permanently disabled workers and their dependants.

b) Public Assistance: An additional $11.1 million will provide for an
average
increase of 15.6 per cent in basic allowances for public assistance
recipients.

c) Pensions: $3 million is provided for cost-of-living increases of up to
11 per
cent in the pensions of retired government employees and Alberta teachers;
$500,000 is provided to equalize pensions for female teachers who retired
before
1970.

2. Increased Funding of Social Programs

Mr. Speaker, this budget provides substantial funding to meet inflationary
cost
increases in the provision of social programs. A large element of this
increase will
result in higher salaries for many Albertans.

a) Basic Education: The provincial contribution to the School Foundation
Fund will
provide for a 15 per cent increase in the per pupil grant over and above
the
basic improvements in education financing which I have previously noted.

b) Health Care for Albertans:

Hospitalization payments will be increased by $69 million or 21 per cent,
to
maintain Alberta's high standards of health care and provide improved
incomes for
Alberta's hospital workers.

$7 million is included in the Alberta Health care Insurance Commission to
adjust
fee payments to Alberta physicians by 6.5 per cent in recognition of the
increased costs of medical practice.

An increase of $4.3 million, 33 per cent, will maintain and improve health
service provided by local health units.

c) University Financing: An increase of $23 million, or 25 per cent, will
provide
for a 15 per cent increase in the basic university grant formula, as well
as
meeting the costs of increased enrolments and new and improved programs.


February 7, 1975 ALBERTA HANSARD 483

3. Direct Measures to Increase Disposable Incomes of Albertans

Mr. Speaker, in addition to meeting inflationary increases in program
costs, the
direct measures to increase disposable incomes of Albertans provided in
this budget will
be of significant benefit in offsetting the impact of increased living
costs on our
citizens.

a) Tax Measures: As previously indicated, the tax measures provided in
this budget
will increase directly the disposable income of Albertans by $123 million.

b) Utility Costs: $56 million will be provided under the Natural Gas
Rebate Plan to
reduce the cost of natural gas to Alberta citizens. In addition, $21
million
will be refunded directly to consumers under the Public Utility Income Tax
Rebate
to offset the future rate increases.

c) Fuel Oil Distribution Allowance: In addition to the one-third reduction
in fuel
taxes provided in the 1974 budget, this budget includes $10.5 million to
continue
the rebate of 5 cents per gallon on the purchase of farm fuels and
domestic
heating fuel. Mr. Speaker, Albertans will continue to enjoy the lowest
fuel
costs in Canada.

4. Interim Cost-of-Living Adjustment for Alberta's Civil Service

The 1975 Budget includes $26 million to reflect interim salary adjustments
for
provincial government employees approved in 1974 to compensate for
increases in the cost
of living.

B. SENIOR CITIZENS

This budget includes a number of important provisions to improve further
the wellbeing
and security of Alberta's senior citizens.

1. Income

Our senior citizens, most of whom are dependent upon fixed incomes, are
particularly
vulnerable to increases in the cost of living.

The 1975 budget provides:

$23 million for the new Alberta Assured Income Plan to ensure that every
senior
citizen receiving old age security and the guaranteed income supplement
receives a
minimum monthly income of $235. Approximately 76,000 elderly citizens will
receive
benefits under the Alberta assured income plan, two thirds of the total
number of
elderly people in the province. This assured income plan provides benefits
greater
than those of any other provincial government.

An additional $1.8 million is provided under the Alberta Property Tax
Reduction Plan
to increase senior citizen renter assistance grants to $150 from $100.

2. Improved Services for Senior Citizens

In addition to improved incomes for senior citizens, this budget provides
important
new initiatives to ensure adequate health care and housing for our senior
citizens and to
encourage their participation in all aspects of community and provincial
life, including:

a) $1.6 million for a variety of new community-based and -related programs
for the
elderly - these programs represent a commitment on the part of our
government
to develop those services which will promote independence and enhance the
personal and family life of older people;

b) $25 million for new senior citizen housing projects, providing 10 new
senior
citizen lodges and additions to 16 existing lodges;

c) $1 million for renovations to upgrade existing senior citizen lodges;

d) $16.4 million for extended health care benefits providing dental
services,
hearing aids, surgical and medical equipment, appliances and supplies, and
a
major portion of eyeglass costs;

e) elimination of the $5 hospital administration charge for senior
citizens;

f) free medical examinations for drivers' licences for senior citizens;


484 ALBERTA HANSARD February 7, 1975

g) $1 million for the Senior Citizen Recreation Facility Program.

Mr. Speaker, the Assured Income Plan, combined with all benefits provided
to senior
citizens by our government, assures our senior citizens the best aggregate
benefits of any
province in Canada.

C. INCREASED ASSISTANCE TO ALBERTA MUNICIPALITIES

Mr. Speaker, in the area of increased assistance to Alberta municipalities,
we
recognize the legitimate needs of local governments for increased
financial resources to
provide services at the local level.

This 1975 Budget contains provision for extending additional financial
assistance to
municipalities:

$45.9 million, an increase of 15 per cent, is provided for unconditional
municipal
assistance grants.

$2.8 million is provided to lower interest rates to 8 per cent on new
borrowings from
the Alberta Municipal Finance Corporation excepting borrowings for
electric, telephone
and natural gas utilities.

$5 million of additional "tax room" will be provided by way of reducing
the education
foundation levy on non-residential property by 2 mills from 28 to 26 mills.

Mr. Speaker, total direct financial assistance to Alberta municipalities
will increase
28 per cent to $189 million in 1975.
In addition to this direct financial assistance, unrestricted amounts of
financing
will be available from the Alberta Municipal Finance Corporation.

D. IMPROVED SOCIAL PROGRAMS

Mr. Speaker, in the area of improved social programs, the 1975 Budget
reflects our
government's commitment to enhance opportunities and services for all
Albertans.

1. Housing for Albertans

In the area of housing for Albertans, the activities of the Alberta
Housing
Corporation will be substantially increased this year with two major
objectives involved:

to provide direct housing assistance to certain disadvantaged and low-
income
Albertans, and

to directly assist Albertans in home ownership.

The 1975 Budget provides:

a) $65 million, a twelvefold increase from the $5 million budget in 1971,
for the
direct lending program, which provides mortgage funds, Mr. Speaker, to
assist
Albertans in achieving home ownership, chiefly directed outside our
metropolitan
areas;

b) $6.6 million for Native housing programs for Alberta Metis citizens;

c) $5.5 million for rural housing programs for Alberta farm families,

d) $1.5 million, an increase of 73 per cent, to accelerate the provision
of adequate
water supplies to Native communities.

2. Alberta Hospitals, Health, Education and Public Assistance

Mr. Speaker, in the area of Alberta hospitals, health, education and
public
assistance, our 1975-76 Budget will ensure that the high standards we have
achieved in our
social services will be maintained and will provide important improvements
in meeting the
special needs of our mentally and physically handicapped and low-income
citizens.

a) Hospitals: The largest single item of expenditure by the Province
continues to be
for the funding of hospitals in Alberta. In the 1971-72 Budget, the amount
provided was $212 million. Only four years later the amount required for
hospitals has risen to nearly $400 million and requires close to 20 per
cent of


February 7, 1975 ALBERTA HANSARD 485

the province's total operating budget commitments. These costs have nearly
doubled in just four years and in total dollars represent by far the
largest
growth factor in provincial government expenditure.

It is estimated that about 75 per cent of these funds is used to pay
salaries and
wages to those working in the hospital system. This growth in hospital
costs.
Mr. Speaker, is of continued concern to the provincial government, and
further
efforts to reduce unnecessary expenditures and improve efficiency and
productivity will be sought in the years ahead.

b) Health: In the area of health for Albertans, $1.2 million is provided
to expand
funding of operating costs of our Native alcoholism programs, as well as $
400,000
for construction of the Bonnyville Indian-Metis Rehabilitation Centre.

Over $500,000 is provided to fund 20 school lunch programs in northern
communities.

c) Education: In addition to the improvements in education financing
previously
outlined, the 1975 Budget provides:

$14 million, an increase of 58 per cent, for further development of our
Early
Childhood Education Program;

$5.6 million, an increase of 15 per cent under the Educational Opportunity
Fund
to upgrade the quality of education in grades 1 to 6, and extend
programming for
environmentally disadvantaged pupils in grades 1 to 12;

$11 million for a new program to move towards equalization of
supplementary
school requisition revenues.

d) Public Assistance: Mr.Speaker, in the area of public assistance, $4
million is
provided to commenceimplementation of the government's position paper on
public
assistance. The measures provided include a $1 million expansion of day
care
programs, increased public assistance earnings exemptions and asset limits,
and
programs to assist citizens on public assistance to find and retain
employment.

3. Recreational and Cultural Development

This budget provides a total of $65 million to enhance the quality of life
in Alberta
through improved recreational and cultural programs including:

a) $20 million for the first year of a 10-year program for the development
of major
recreational and cultural facilities throughout our province;

b) $10.3 million to continue development of the Capital City Park in
Edmonton and
the Fish Creek Park in Calgary;

c) $11 million to continue the vigorous provincial parks program outlined
in our
1973 position paper;

d) $600,000 forinitial development of a new pheasant hatchery near Brooks;

e) $2.6 million for Century Calgary celebrations as well as $1.2 million
for McMahon
Stadium to assist Calgary in hosting the 1975 Grey Cup;

f) $3.3 million for the support of the 1978 Commonwealth Games in Edmonton,

g) An increase of $677,000 in funding for cultural development activities
of the
Department of Culture, Youth and Recreation.

4. Law Enforcement, Correctional and Justice Systems

Mr. Speaker, our 1975 Budget provides for substantial improvements in
Alberta's law
enforcement, correctional and justice systems.

a) Law Enforcement, and Correctional Programs: In the area of law
enforcement and
correctional programs, the budget for the Solicitor General's Department
provides:

an additional $2.6 million for improved policing services, including
provision
for an additional 62 constables under our agreement with the RCMP, to
reflect the
government's growing concern, Mr. Speaker, with the need to bolster law
enforcement capability to the province;


486 ALBERTA HANSARD February 7, 1975

$337,000 for a new community corrections program;

$500,000 to improve rehabilitation programs for inmates of provincial
correctional institutions,

$600,000 for the expanded operation of the Calgary Remand and Detention
Centre.

b) Justice: In the area of justice for Albertans, Mr. Speaker, the budget
of the
Attorney General's department provides:

an 18 per cent increase in the cost of operating the provincial court
system
since September 1971, the number of provincial judges has been increased
from 45
to 60 in recognition of the need for the effective administration of
justice in
the lower courts;

$1 million in thrust funds to begin implementation of the recommendations
of the
Kirby Board of Review,

$1 million to improve the system of registration in the land titles
offices in
Calgary and Edmonton.

In addition to these important improvements in social programs for
Albertans, this
Budget provides $1 million to match contributions by Albertans to
international aid
projects.

E. STRENGTHENING ALBERTA'S ECONOMIC BASE

The 1975 Budget continues the priority which this government attaches to
restructuring
the Alberta economy in accordance with the Premier's industrial strategy,
to ensure
improved economic opportunities for all Albertans in the coming decades.
The personal tax
reduction, aside from its other obvious benefits, will be an important
addition to
economic activity in Alberta and will also tend to offset negative
external economic
pressures coming from other parts of Canada.

1. Diversification and Decentralization

Our economic programs are designed to manage growth to ensure the
development of a
stable economy which benefits Albertans throughout our province.

a) Transportation: Development of a province-wide transportation system is
essential to our efforts to diversify and decentralize the Alberta economy.
This
Budget provides:

[$26] million for development of Alberta growth roads, an increase of 26
per cent
over the 1974 forecast and a 56 per cent increase over last year's budget;

$1.4 million for development of northern, community and industrial
airports,

a total of $62 million to assist municipal governments in meeting local
transportation needs.

b) Improving Regional Services: The 1975 Budget continues this
government's
commitment to improving the capacity of our non-metropolitan centres for
future
economic development through provision of:

$11.5 million for the Rural Gas Expansion Program to provide natural gas
service
to 10,000 Alberta households in addition to the 14,000 rural households
serviced
to date;

$3.5 million for new capital projects to develop improved municipal water
supplies, as well as $2 million in the operating budget to reflect the
acceleration of municipal water supply programs;

$175,000 for electrification of isolated communities in Alberta,

$15.7 million, a 44 per cent increase over the 1974 budget, for
development of
government service centres throughout the province.

c) Encouragement of Alberta Business and Industry: In addition, Mr.
Speaker, to the
important measures planned in the area of tax incentives which I recently
presented to this Assembly, this Budget provides:

$22 million for additional funding of the Alberta Opportunity Company;


February 7, 1975 ALBERTA HANSARD 487

$1.5 million for interim assistance to the Alberta lumber industry;

$9.1 million for marketing development programs in the departments of
Agriculture, and Industry and Commerce,

$2.5 million for a guaranteed loan program for Alberta publishers, as well
as
$50,000 for direct grants to enhance the development of an Alberta
publishing
industry.

2. Agriculture

In the area of agriculture this Budget continues our government's
recognition of the
vital role played by our agricultural industry in the economic life of our
province. The
1975 Budget provides:

a) $25 million for additional funding of the Agricultural Development
Corporation;

b) $2.3 million for the Livestock Water Supply Program;

c) $450,000 for agricultural society grants,

d) $783,000 to stimulate thoroughbred and harness racing in Alberta.

Mr. Speaker, the various provincial programs to reduce input costs to
farmers - such
as the Natural Gas Rebate Plan, Alberta Property Tax Reduction Plan, farm
fuel allowance,
the income tax reductions - should assure that agricultural input costs
for Alberta
farmers are among the lowest for any commercial agricultural producers in
the world.

3. Manpower

One of the important elements in realizing our future economic potential
lies in
ensuring that Albertans realize the employment opportunities which will be
afforded by
development of our economy. The 1975 budget provides:

a) $36 million, an increase of 15 per cent, for technical and vocational
training
programs;

b) $5.6 million, an increase of 43 per cent, for manpower development
programs,
including a 24 per cent increase for apprenticeship training;

c) $850,000, an increase of 105 per cent, to provide employment
opportunities in
isolated Alberta communities under the Opportunity Corps Program.

VI. 1975 FINANCIAL PLAN

Mr. Speaker, before concluding, I would like to sum up the financial
position of the
government in light of the measures which I have just outlined.

The Budget calls for budgetary expenditures of $2,439 million, an increase
of 17 per
cent over our forecast of budgetary expenditures for the current fiscal
year. After
deducting $60 million for emergency assistance to farmers and
municipalities from the
1974-75 expenditures, the total increase in the operating budget is $374
million.

Of this increase, $303 million or 81 per cent is to be transferred to
local
governments, schools, hospitals, colleges and universities, or to
individual Albertans, as
direct payments, either to increase disposable incomes or to reduce costs.
This $303
million provides an increase of 26 per cent in these external payments in
1975-76.

Expenditures for provincially-administered programs show an increase of
only $71
million or 13 per cent. The growth in the public service will be
restrained to 855 new
permanent positions. This represents, Mr. Speaker, an increase of only 3.2
per cent over
the forecast of 1974-75 permanent positions; a significantly slower growth
rate for the
public service of Alberta.

Budgetary revenues are estimated to reach $2,490 million, an increase of
15 per cent,
after allowing $123 million for the new tax reduction measures outlined
and after
excluding incremental conventional crude oil royalties. I am unable to
quantify the total
incremental crude oil royalties which will accrue in 1975-76 due to future
price
increases.


488 ALBERTA HANSARD February 7, 1975

As summarized, I am pleased that this Budget I am presenting tonight
results in a
surplus of $51 million after combined expenditures on operating and
capital account, Mr.
Speaker, again excluding incremental crude oil royalties. For nonbudgetary
transactions,
the net cash requirement for loans and advances is estimated to be $188
million, primarily
for housing.

Due to our government's oil and natural gas policies, combined oil and
natural gas
returns to Albertans have increased from $270 million in 1971-72, when we
assumed office,
to an amount of $1.4 billion anticipated in the 1974-75 fiscal year - a
fivefold
increase since 1971-72. Mr. Speaker, this has provided many substantial
tax reductions to
Albertans including the $123 million personal income tax reduction
included in this Budget
and still retains substantial incremental royalty revenues for Alberta's
future.

According to our government's policy that a substantial part of the
incremental crude
oil royalties must be invested in such a way as to promote diversification
of our economic
base, an Alberta heritage trust fundNext Hit will be established to ensure the
prosperity of
future generations of Albertans. I have not included the incremental crude
oil royalties,
Mr. Speaker, in budgetary revenues in order to make it clear that these
revenues are not,
and will not, be available to finance ongoing, normal budgetary
expenditures. After
allowing for the substantial tax reductions and new expenditure programs
contained in this
Budget, I estimate that $1.5 billion will be available by December 31,
1975 for transfer
to an Alberta Previous Hitheritage trust fundNext Hit for present and future Albertans.

VII. CONCLUSION

Mr. Speaker, the highlights of our fourth Budget are reflected in these
benefits for
Albertans:

1. substantially reduced personal income taxation making Albertans the
lowest-taxed
citizens in Canada in every major individual tax area;

2. support for social and other government services equal to or better
than any
government in Canada;

3. partnership programs with the private sector to sustain and diversify
an economy
which is already the most dynamic in Canada; and, Mr. Speaker,

4. the complete reversal of the financial position of the provincial
government in
three and one-half short years - from a position of dwindling revenues and
increasing borrowing requirements - to the strongest financial position of
any
provincial government in Canada, Mr. Speaker, allowing all of these
benefits and an
Alberta Previous Hitheritage trust fundNext Document for Albertans of $1.5 billion on December 31,
1975.

Mr. Speaker, hon. members, it has been my pleasure to present our
government's fourth
Budget this evening.

The first Budget began new directions in priorities for the people of
Alberta. The
second Budget reflected our confidence in Alberta and accelerated the new
directions. The
third Budget commenced a new era for Alberta, based on sound resource
management policies
and historic opportunities. Mr. Speaker, this fourth Budget indicates the
achievements of
our government and presents to the people of Alberta the benefits of our
policies.

[Applause]

MR. R. SPEAKER:
Mr. Speaker, I beg leave to adjourn the debate.

Mr. Speaker:
May the hon. member adjourn the debate?

HON. MEMBERS:
Agreed.

MR. HYNDMAN:
Mr. Speaker, I move that this Assembly do now adjourn until Monday
afternoon at 2:30
o'clock.

Mr. Speaker:
Having heard the motion by the hon. Government House Leader, do you all
agree?

HON. MEMBERS:
Agreed.


February 7, 1975 ALBERTA HANSARD 489

Mr. Speaker:
The Assembly stands adjourned until Monday afternoon at 2:30 o'clock.

[The House rose at 9:05 p.m.]