Notes for Remarks by
HON. RALPH GOODALE, PC, MP (REGINA-WASCANA)
Canada’s Minister of Public Safety and Emergency Preparedness
REGINA & DISTRICT CHAMBER OF COMMERCE
March 26th, 2019
Thank you, Mr. Chairman.
Distinguished guests, ladies and gentlemen. Good afternoon.
Thank you for the invitation to talk about the economy and the federal budget that was handed down a week ago today, and thank you all for coming – as we gather on the territory of Treaty #4 and in the homeland of the Metis.
There are a great many things in this budget which are relevant and useful and positive for people in Saskatchewan. While I can’t deal with all of them in the time we have available, I will try to hit some of the key highlights, and then look forward to your questions.
To set the stage – we all know the world in which we live is a turbulent place.
Political turmoil and unpredictability in the United States seem likely to persist for the foreseeable future. Our two biggest trading partners, the U.S. and China, are locked in a trade war. The United Kingdom is totally consumed by its Brexit chaos. France and other countries in Europe are facing internal dissension and slowing growth. The Middle East continues to roil. And Russia continues to meddle in a number of places around the globe.
But despite all this, the Canadian economy has done remarkably well.
While our overall growth rate has moderated a bit, it’s still second only to the U.S. among the top G-7 countries. Foreign direct investment is up, reflecting Canada’s solid reputation as a good place to do business. Canadian jobs are being generated at the strongest pace in 38 years – more than 900,000 net new jobs have been created since we came to office in November of 2015. Unemployment is at 40-year lows.
Here in Saskatchewan, the number of people working in our provincial economy is near a record high. The latest figures show an increase of 9,000 Saskatchewan jobs over the past year.
Our federal Credit Rating is Triple-A. And our Debt Ratio is low and steadily dropping even further – at about 30%, it’s the best in the G-7. By comparison, the federal debt ratio in the United States stands at a whopping 104%, and rising.
When our government began, we had to make a policy choice between austerity (as one alternative) and investment to drive greater growth (as the other). We chose “growth” because that was, and is, our economy’s greatest need – to meet the aspirations of the middle-class and all those who are working hard just to get to the middle-class, to generate the necessary jobs and wages, the standard of living and the retirement security that Canadians expect.
Austerity in the economy’s current context and circumstances would be counterproductive – reducing aggregate demand, stifling further growth and costing jobs.
Our growth investments have been carefully chosen and targeted:
- A 7% cut in the middle-class tax rate, for example, and an 18% reduction in the tax rate applicable to small businesses – to increase disposable incomes, strengthen demand and help drive growth.
- The creation of the Canada Child Benefit – targeted, indexed and totally tax-free. Nine-out-of-10 families are better off and 300,000 kids have been lifted out of poverty. The CCB pumps about a billion dollars every year into the spending power of Saskatchewan families. Driving growth.
- For business investment, including but not limited to agriculture, we have tripled the existing capital cost allowance for the first-year in which a new capital asset is in use. For example, a farmer investing $2 million in new machinery, equipment, technology or buildings would be able to save $160,000 in lower federal taxes.
- These new tax rules give Canada the best Marginal Effective Tax Rates on new business investment in all the G-7 – better than the average in OECD countries, and five percentage points better (that is, lower) than in the United States.
- To drive growth, we’ve also invested extensively in scientific research (the most of any government in Canadian history), innovation, higher education and trade. That has sent hundreds of millions of federal dollars into Saskatchewan. One prime example is the new Protein SuperCluster which aims to make Canada the undisputed world leader in the science, production, processing and marketing of plant protein.
- Public infrastructure is another growth driver – generating business activity and good jobs today, while building the right economic foundations for an even stronger future. The Government of Canada is a major investor in close to 200 water and waste-water projects in communities large and small from one end of Saskatchewan to the other. (We just announced eight more this morning.) We’ve financed renovations to local recreation or cultural facilities in 66 different communities. And we’re helping to build or upgrade hundreds of kilometres of provincial highways, along at least 20 different routes, representing a federal investment now approaching $200 million in Saskatchewan transportation.
- Here in Regina, our infrastructure work has included the City’s new Bus Barn, system-wide transit upgrades, improvements at several community recreational centres, a new power system for the Buffalo Pound water plant, more capacity to handle storm drainage, the clean-up planned for the old railyards, rebuilding the Winnipeg Street overpass, the University of Regina College Avenue Building … and there’s more to come.
In addition to regular federal transfer payments of about $1.7 billion annually, our investments to drive growth have also sought to reinforce the provincial government’s fiscal position. To that end, we transferred a number of federal water control structures to the provincial government in 2017, together with $365 million in cash that went straight to the province’s bottom line.
We’re providing Saskatchewan with $158 million for better homecare and mental health services, with another $190 million to follow.
There’s $41 million from the Government of Canada to help create 2,500 additional, high-quality childcare spaces in Saskatchewan.
There’s $12 million to help fight gangs.
There’s $500 million for workforce development – upgrading skills and helping people adjust to changing job opportunities in Saskatchewan.
There’s another $240 million to strengthen our local agri-food sector.
There’s $290 million for social and community housing in Saskatchewan.
I mention these things to make a simple but important point that the federal government is active on many fronts to help Saskatchewan succeed. And that includes a $4.5 billion investment to ensure pipelines get properly completed in the right way to move prairie resources safely and efficiently to offshore export markets at world prices.
Similarly, to defend Evraz, our local steel and pipe manufacturer, and its 2,200 employees here in Regina and in Alberta, we’ve made a $40 million federal investment to advance innovation, productivity and competitiveness at Evraz – and to safeguard those jobs, despite illegal tariffs imposed by the U.S.
Battling those tariffs by every means at our disposal, and restoring full Canadian access to the Chinese canola market are Canada’s two most important international trading priorities.
With respect to canola, a constructive discussion with China had been underway for several months prior to their most recent restrictions. We will intensify that work. Senior representatives will engage at the right strategic moments. Our objective is to keep this conversation focused on science and technical issues, because we know our product is the best and cleanest in the world.
Ministers Freeland and Carr are in close contact with canola sector leaders in Canada to ensure a totally coordinated Team Canada approach. We will spare no effort to defend Canadian producers and exporters.
Now let me turn to “what’s new” in the 2019 Federal Budget. It stands on six major pillars:
First – “Having an affordable place to call home.” And to that end we are creating a targeted first-time homebuyer’s incentive that effectively lowers borrowing costs; and we are modernizing the existing Home Buyers’ Plan to make it more flexible and generous along the lines recommended by Regina Realtors. On Budget Day, I was glad to hear positive reactions to these steps coming from both the Regina Home Builders, and the Realtors.
Second – “Helping Middle Class Canadians Find and Keep Good Jobs.” This is especially important in a province in which levels of post-secondary education attainment are losing ground to the rest of the country. So we’re lowering the federal interest charges on student loans, expanding work placement programs and creating a new personalized Training Benefit to help employees constantly upgrade their skills.
Third – “Moving Ahead on National Pharmacare.” Our objectives are to lower drug costs and improve drug coverage. To that end, as first steps, we will create a national drug agency to negotiate better prices, expected to save up to $3 billion a year. And we’ll advance a national strategy for high-cost drugs for rare diseases to help all Canadians get better access.
Fourth – “Supporting Seniors.” We are reducing the clawback that has applied to extra income earned by recipients of the Guaranteed Income Supplement, thus expanding eligibility. We’ll take pro-active steps to ensure that everyone who is eligible for the Canada Pension Plan actually gets their benefits. And we’re expanding the popular New Horizons program.
Fifth – “Connecting All Canadians to High-Speed Internet.” Over the coming decade, we will work with service providers like Sasktel and others in the private sector to build on the success of our existing “Connect to Innovate” program with the goal of linking every Canadian to top quality internet services everywhere. The greatest benefit will flow to rural and remote communities.
Sixth – “Topping-Up the Gas Tax Transfer to Municipalities.” One of the most popular programs I have ever been associated with is the arrangement whereby the Government of Canada sends a portion of the federal excise tax on gasoline directly to local municipal governments to help with their regular, on-going infrastructure costs – streets, roads, sidewalks, bridges, water systems and so forth. They decide. The formula for the transfer is well-established. It’s efficient and completely transparent. I’m happy to say the original idea was first implemented in the federal budget of 2005 (when it was my privilege to serve as Canada’s Minister of Finance).
The amount available to transfer has grown over the years. This year, Saskatchewan municipalities were expecting a combined total of $62 million (including about $12 million for Regina). To give all local governments a boost, the federal government is doubling this year’s allocation. Regina will be receiving $24 million to support its local Infrastructure priorities, and altogether Saskatchewan municipalities will receive $124 million. Driving good local jobs and more economic growth, both now and in years to come.
Those are the six major federal budget initiatives that are likely to attract the largest national focus – housing, skills, pharmacare, seniors, rural access to high-speed internet and the gas tax transfer. Many other dimensions in the budget will attract particular attention in different parts of the country. Let me close by mentioning two that have special resonance here in Saskatchewan.
One is STARS, the Shock Trauma Air Rescue Service which has provided rapid emergency helicopter ambulance and rescue services to people in trouble across the prairies and parts of British Columbia since 1985. The service came to Saskatchewan thanks to the great work of former Saskatchewan Finance Minister, Rod Gantefoer, who is in the room with us today, along with some of his STARS colleagues.
Their operations include vast rural and remote areas, our resource development and agricultural sectors, Indigenous communities, National Parks, National Defence properties, and much more. STARS saves lives virtually every day.
But their fleet of helicopters is aging and will soon need to be replaced and upgraded. And that’s expensive.
Consistent with Canada’s National Emergency Response Strategy and in recognition of STARS sterling record of public service in western Canada, I am pleased to confirm that the 2019 federal budget provides funding to my department, Public Safety Canada, to make an immediate one-time capital investment in STARS of $65 million to help replace and upgrade its helicopters.
Finally, let me turn to water. BIG water. The kind of water conservation, development and management that can truly transform the face of western Canada – and especially Saskatchewan.
Water is always an issue in our part of the world. We’ve either got too much of it, or too little of it. And it’s almost always in the wrong place. No issue is more contentious, or consequential.
Our parents and grandparents learned all about that in the Dirty Thirties, a decade of drought and depression when environmental disaster on the Prairies marked them for life. And they always remembered that no commodity – not oil or potash or uranium or grain – none of them is more precious than fresh, clean, flowing water.
Out of the despair of 1930s, two good things emerged.
One was PFRA, the Prairie Farm Rehabilitation Administration, a federal regional agency headquartered here in Regina, which thrived for 75 years as Canada’s most vital centre of knowledge, expertise, innovation, engineering and practical hands-on action for soil and water conservation and development. It was, quite simply, the best in the world.
The second “good thing” from the 30s was the South Saskatchewan River Project which was built by PFRA.
It took 20 years of planning and argument, and 10 years of construction. But finally it opened in 1967, bearing the names the three political legends who made it happen – Gardiner Dam, Diefenbaker Lake and Douglas Park.
The dam back then was the largest earth-filled physical structure on the face of the earth. The lake is 225 kms long, with 800 kms of shoreline. It supplies safe, fresh water to more than 60% of Saskatchewan’s population. It creates unique prairie opportunities for parks and recreation.
It supplies green hydro power into Saskatchewan’s grid. It help’s both flood-proof and drought-proof the core of the grainbelt. It enables more intensive irrigation farming, value-added growth and rural diversification.
But still, we are utilizing only a tiny fraction of the project’s potential – more water evaporates from Diefenbaker Lake than we actually use. The original vision for the project was never completed, because from that massive reservoir, conduit systems were to be built in all four directions – including into the Qu’Appelle Valley and southeast.
What if we were now to rekindle that idea? Sadly, PFRA is no longer available to lead. It was dismantled in federal budget cuts back in 2012. Ironically, because of Climate Change, we are probably facing more serious soil and water issues today than those that prompted the creation of the agency back in 1935.
Increasingly, more severe and volatile weather patterns, resulting in more costly storms and floods and droughts and wildfires are extracting heavy tolls. Across the Prairies in the last six years, the damages have added up to billions of dollars. The insurance industry says that debilitating cycle of losses is only expected to accelerate and deepen.
Are we then condemned to that fate, picking up the pieces and cleaning up the messes after-the-fact? No, in fact we’re not – not if we recognize the threat, and muster the political will to get ahead of it by investing up-front in the truly transformational “big water” infrastructure – both engineered and natural – for safe and clean water flows, greater flood-proofing and drought-proofing, and diversified water-based economic and social growth.
A good many Saskatchewan people are interested in this idea – the Saskatchewan Chamber, Mayor Fougere, APAS, irrigation farmers, watershed associations, Indigenous leaders, Ducks Unlimited, the crop diversification centre, the Global Water Institute, the Johnson-Shoyama Graduate School, both the UofR and the UofS, the Protein Industries SuperCluster, Clifton Engineering, and more.
We need to be ambitious. Over the coming decade, the Government of Canada is planning to invest $180 billion in infrastructure projects of all kinds across the country. They’re all important. But few would have the powerful impact of properly linking Lake Diefenbaker with the Qu’Appelle Valley, while permanently fixing future water challenges for both Moose Jaw and Regina on the way by.
As major infrastructure projects from previous years begin to wind-down – like the Regina Bypass, for example – the construction industry needs some new anchor projects. This could be one of them. It would likely take a combined federal and provincial financial commitment of probably $1.5 billion. That’s a lot of money. What could we get in return?
Private sector projections over a 40-year time frame suggest $17 billion in private investment; $130 billion in added GDP / $80 billion in Saskatchewan; 426,000 person-years of employment; and about 100,000 acres of added irrigation capacity.
There is a long way to go to realize a vision like that. But it’s well worth the effort. The 2019 federal budget provides initial funding and a mandate for the department of Western Economic Diversification to pull all interested parties together to assess what’s possible. We should be bold.
Ladies and gentlemen, thank you for your patience. I look forward to your questions. Thank you.