Honourable Greg Selinger Minister of Finance Creating A Community Where All Can Work

Overview Issues Putting the right programs in place Setting the stage Training and Education Lending a Hand Results 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

Aboriginal Population

Aboriginal Education

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 (Millions of Dollars)

Putting the Right Programs in Place We believe in: Educational opportunity Accessible child care Fair income support Maintenance enforcement Building communities

Getting the Fundamentals Right People need jobs to move to Balanced, 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

2003 Increase in Use of Food Banks 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 capital Direct loans and training grants to save jobs, encourage expansion Infrastructure 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 Initiative Industrial Training Partnerships Labour Market Development Agreement Access Program University College of the North Cooperative 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 work Step 1 – stop doing what isn’t working Step 2 – get the policy mix right Step 3 – build cross-sectoral policy links

Step 1 – Stop What Doesn’t Work Ended workfare Eliminated the snitch line Raised income assistance rates Allowed the disabled to establish trust funds Ended 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 Child Affordable Housing Initiative Neighbourhoods Alive!

Child Care Lack of access is a barrier to work 5 year plan focuses on quality, accessibility and affordability More educators, more spaces, more subsidies, better funded infant care Increased time for job search

Child Care Child Care Funding (Millions of Dollars) Source: Manitoba Family Services and Housing

Healthy Child Strong families, strong communities Short-term - more resources for parents Long-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 improvements employment and training education and recreation safety and crime prevention

Showing Results Lowest unemployment rate last year Lowest youth unemployment rate - highest level of employment since 1990 Interprovincial migration losses lowest in 4 years - net migration positive Record increase in labour force, participation rate Record levels of employment

Showing Results Population Growing Source: Statistics Canada Percent

Showing Results People Coming Here Source: Statistics Canada

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 Average Annual Caseload Source: Manitoba Family Services and Housing

Showing Results Change in Case Composition 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 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 first building through research and innovation raising and retaining capital affordable government growth through immigration building our communities building our energy advantage Manitoba’s Seven - Point Action Strategy for Economic Growth