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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