honourable greg selinger minister of finance creating a community where all can work

HonourableGreg SelingerMinister of Finance

Creating A Community

Where All Can Work

Overview

IssuesPutting the right programs in place

Setting the stageTraining and EducationLending a HandResults

Getting the mix right - focus on the future

Issues

Aging work force

Increasing aboriginal population

Skills gaps

Low wages, low income

The fiscal context

Manitoba’s Aging Labour Force

Labour Force Population By Age Groups

0%

10%

20%

30%

40%

15 - 24 25 - 44 45 - 54

2000 2010

Aboriginal Population

Aboriginal Population By Age Groups

0%

5%

10%

15%

20%

25%

15 - 24 25 - 44 45 - 54

2000 2010

Aboriginal Education

Distribution by Educational Attainment

0%

20%

40%

60%

80%

Aboriginal Total Manitoba

Less than High School Completed Post-Secondary

Low Wages, Low Income

12% of 2-parent families are below LICO

52% of 1-parent families are below LICO

22% of children live in low-income families

All three statistics represent the 2nd-highest rate in Canada

The Fiscal Context

Currently experiencing economic, budget pressures

Deficits unacceptable to Manitobans, not allowed by Balanced Budget Act

Major tax reductions seem to have run their course

Health spending consumes 3/4 of new revenues

The Fiscal Context

Over the medium term, revenues up 3%, expenditures up 2%

Key public services can be maintained, modest improvements in priority areas possible

Small draw on Fiscal Stabilization Fund necessary to compensate for federal accounting error

Fund replenishment possible in 2 years

Medium-Term Fiscal Forecast

2003/04 2004/05 2005/06 2006/07

Revenue 7,314 7,471 7,715 7,997Expenditure

Program Expenditure 6,925 7,056 7,198 7,342Public Debt Costs 331 348 365 365

Total 7,256 7,404 7,563 7,707

Net Revenue / (Expenditure) 58 67 152 290Interfund Transfers

Debt / Pension Repayment (96) (96) (115) (115)Fiscal Stabilization Fund 48 39 (27) (165)

Balance Under Balanced Budget Legislation 10 10 10 10

(Millions of Dollars)

Putting the Right Programs in Place

We believe in:Educational opportunityAccessible child careFair income supportMaintenance enforcementBuilding communities

Getting the Fundamentals Right

People need jobs to move toBalanced, responsible approach –

sustainable budgets, debt reduction, tax relief, physical and social investments

Maintain Manitoba as an affordable place to live, work and invest

Fundamental Success

Manitoba places in top 3 across all income and family types for affordability of total taxes and living costs

Manitoba was the only province in Canada where food bank use went down

One of the most affordable places for manufacturing firms in North America

Private sector investment is at an all-time high

Manitoba is Affordable

Rank on Taxes and Living Costs

1 = lowest

0

1

2

3

Single,$30k

SingleParent,

30k

1-EarnerFamily,

$40k

1-EarnerFamily,

$60k

2-EarnerFamily,

$60k

2-EarnerFamily,

$75k

Ran

k

2003 Increase in Use of Food Banks

11.4 10.2 9.9 9.9

5.3 4.5 3.2 2.4 1.3

-9.1-15

-10

-5

0

5

10

15

PE NB NS QC AB ON NL BC SK MB

Perc

ent

Source: Canadian Association of Food Banks

Helping Manitoba Grow

Manitoba Hydro’s new dam – economic growth, training for Northerners

Targeted tax incentives to leverage private investment

Attracting more venture capitalDirect loans and training grants to save

jobs, encourage expansionInfrastructure investment

Training and Education are the Key

Unemployment is low, but a skills mismatch exists

Need to give people the skills to access the jobs that are available

Need to target aboriginal Manitobans, Northerners and rural Manitobans

Need to deliver training and services where those people live

Training and Education Initiatives

College Expansion InitiativeIndustrial Training PartnershipsLabour Market Development AgreementAccess ProgramUniversity College of the NorthCooperative Education Tax Credit

Lending a Hand – Welfare to Work

Even when fundamentals are right and training programs are in place, direct intervention is necessary to ease the transition to meaningful, permanent workStep 1 – stop doing what isn’t workingStep 2 – get the policy mix rightStep 3 – build cross-sectoral policy links

Step 1 – Stop What Doesn’t Work

Ended workfareEliminated the snitch lineRaised income assistance ratesAllowed the disabled to establish trust

fundsEnded the NCB clawback for all children

on income assistance

Step 2 – Get the Policy Mix Right

Increased the minimum wage Increased resources for maintenance

enforcement – promoted reciprocal enforcement

Increased funding for Access programs Introduced the Building Independence

initiative

Building Independence

Provides substantive links to training and employment for income assistance participants with other government departments

Provides a range of supports to reduce barriers to employment

Provides job readiness assessments Develops and supports initiatives in

partnership with agencies

Tax Reductions

Middle and upper rates have been reduced

Non-refundable tax credits, Family Tax Reduction have been increased

Manitoba has one of the most generous sets of low-income reductions and credits in Canada

Tax relief for the poor builds faith in the future

Step 3 - Cross-sectoral Links

Child care Healthy ChildAffordable Housing Initiative Neighbourhoods Alive!

Child Care

Lack of access is a barrier to work 5 year plan focuses on quality,

accessibility and affordabilityMore educators, more spaces, more

subsidies, better funded infant care Increased time for job search

Child Care

0 1999/2000 2000/01 2001/02 2002/03 2003/04

50

55

60

65

70

75

80

Child Care Funding

(Millions of Dollars)

Source: Manitoba Family Services and Housing

Healthy Child

Strong families, strong communities Short-term - more resources for parentsLong-term - improve child outcomes,

break the cycle of dependency Focus on pre-natal to early school years

Affordable Housing Initiative

Lack of access is a barrier to work 5 year federal-provincial plan to

increase supply of affordable rental units and new housing

Targets low-income renters, urban families, off-reserve aboriginal people, Northerners, seniors, persons with disabilities, new immigrants

Neighbourhoods Alive!

Social and economic development strategy

Long-term, community-based Focus on:

housing and physical improvementsemployment and trainingeducation and recreationsafety and crime prevention

Showing Results

Lowest unemployment rate last yearLowest youth unemployment rate -

highest level of employment since 1990 Interprovincial migration losses lowest

in 4 years - net migration positiveRecord increase in labour force,

participation rateRecord levels of employment

Showing Results

Population Growing

Source: Statistics Canada

Annual Population Growth (%)

0.170.12

0.44 0.430.34 0.37

0.63

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

1997 1998 1999 2000 2001 2002 2003

Perc

ent

Showing Results

People Coming Here

Source: Statistics Canada

Manitoba Total Net Migration, 1997 - 2002

-4,578

-1,677

820

-377-973

2,442

-5,000

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

1997 1998 1999 2000 2001 2002

Pe

rso

ns

Showing Results

Income assistance case loads down 12% since 1998/99

General assistance cases down 50%Single parent case loads down 11%Disability case loads up 32%Persons with disabilities now make up

51% of caseload, up from 34%

Showing Results

Decline in Assistance Cases

30,000

31,000

32,000

33,000

34,000

35,000

36,000

37,000

38,000

1998/99 1999/2000 2000/01 2001/02 2002/03 2003/04

Num

ber

of c

ases

Average Annual Caseload

Source: Manitoba Family Services and Housing

Showing Results

Change in Case Composition

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1998/99 1999/2000 2000/01 2001/02 2002/03 2003/04

Num

ber o

f cas

es

General Single Parent Disability Other

Source: Manitoba Family Services and Housing

Focus on the Future

Room for improvement on employment growth - increased immigration, capital projects are key

Benefit stacking results in high marginal effective tax rates at low incomes - rates need to be lowered

Market Basket Measures as a tool for setting welfare rates and tax credits

Individual Development Accounts

Marginal Rates Too High

Single Parent - All Taxes, Benefits and Subsidies

-100

-80

-60

-40

-20

0

20

40

60

Income

%

Source: Manitoba Finance

Conclusion

Strategy focuses on supply and demand sides

Strategy the result of shared values, a common vision and a defined purpose

Strategy part of overall economic growth strategy

Conclusion

education firstbuilding through research and innovationraising and retaining capitalaffordable governmentgrowth through immigrationbuilding our communitiesbuilding our energy advantage

Manitoba’s Seven - Point Action Strategy for Economic Growth