lilies as noel by Q ft. 3-Cant Gas Tax Increase -- rm --- -- - 0- miuhfn can ast..?.a1-udsliv: inn." '1' in VS II V& ciuiiiiiud one use l '0'!" in! limb . "I. ma by one of siasi-ten aroataat noon at 88,It.IIO.r7 as of March! May I draw your attention Iopvd tntaiu-rs. it is an ago all problem 11. IN; made up ss'l'1;lpgIbg-::im ufnmlmxlw that is still seeking solution. uss "I494 09" - t v AGES EINT 5;, ginkigi rand :bicle fees in the current year. aatiux RENTAL .( J” . . " 4 0n444iset i bov iefiecttheuwardl A" "":"”' "- inirstments Jnnshl .” J N". in me 7' rhdipected this fiscal year uathr th wt Flllldi-'4 9'" "5J”' nun” "fhzy -nu grumi present Federal-Provincial Tani ''''"'''M 10.11 aszsisss the foresight of this gum-iiineatl”"'"' '""”'”' ""5" "l”''' oi-owl will ' ”-m- uh h m ." bl , in nu on March at. 1057. run addutuaai Bank Ovcmnn. 3-4 J tran-sporttlaltittii fnhilietier as am tsirevnut h 7'" w the "bu”u.I 85 114361 them in the various phases of can t '""”" H '5' '"" ""'k"'” 7" merical undertakings. The servieaimm "c;:'w'md:l.?l',;ld, ""3: t ' . agreeme nc Toill 5” "mu uo'3Mu'" Ffcuggefnge; 'r:'::o:oJd;.:”dw?l5;,;'u nual amount of Canada's per car CAPITAL AS53110 H helped to cM'n C me its grant to the provinces. This Though the Public Debt was in- 3303:; outlook 0' Prmge Ed. agreement expires this month and

creased by 82,427.33! durillili tear. yet. at the same time WE it-quircd Capital Assets consisting of liighuays. Bridges and Road liat-hinery at a cots of 81.144328. Fixed Assets such as the New Treatment Centre at Falconwood . P.-dtriatrlcs Wing at the Provin- cial Sanato iui... with additions to I-iaiennwood Hospital, Provincial Infirmary.-and Bench Grove prop- ('I'll'. etc. at a cost of 8402.597: and made Loans and Advances to- Mrd the promotion and develop- men! of Industry. and community uclfare purposes, totalling 8278.- 137. in addition, the Government contributed 838,713. towards the construction of new hospital facil- ltics; assisted rural schools to the amount of 8115.000: SP0!" 0V9l' 531110.000 on rural electrification, and assisted fisheries in develop- ment by another 860,000. for I total expenditure of a capital na- ture of nearly four and 0119-0!" million.

It is gratifying to note that. not- withstanding the heavy demands placed upon the Government by our people for essential and yes. even non-essential services. the present debt of 20 ll'Iml0ll 0011311 burden upon our P00Pi0- A "'5' stantlal portion of that debt has been the means of creating per- manant, and better still. revenue producing assets for of this and com gsnerstions. NEW SECUBITI

The public debt operations. dur- ing the past fiscal year. includ- ed the redemption: of ',the 8131!).- 000.00-8 ce - year also of May lst,,"104i1, which matured on May 1, 1955. In addition. tha Province issued nsw securities amounting to 81.700.000.00 at a cost to the Province of 0.05 per cent. Thess debentures bad a 590 0!?- cent soupon attached and were issued for 10 years. The urpose of the issue was for rsfun ing the balance (14 the I per cent lune that matured on May 1. 1955 8766.664, and capital expenditures on highways 8058.016.

The average interest rate paid by the Province on its funded debt was slightly higher at the year- end than it was at the beginning. At. March 01, 1055 it was 8.3 per

- cent as compared with 8.2332 per

cent on April 1, I955. CURRENT FISCAL YEAR

I now coma to a review of the public business for the current fis- ral year April 1, 1954 to March 81. 1957

The Interim Statement of Rev- nine and Expenditure consisting of nine months actual and thru months forecast. tabled for your consideration. shows that a total sum of 813,471,062. was expended on Current and Capital Accounts. including loans and advances made for fisheries and develop- mcnt purposes. In ndddition, the accounts show a transfer of 8181,- 700. to sinking Fund Investments. Total Revenues amounted to 811.- 116.909, leaving an overall deficit of 81,703,528. after providing 855),- 250 for Sinking Funds. This deficit compares vary favourably with the 81,340,041. ortalnsllv mimet- ed in the budget for the current year, and is attributed to a strict system of budgetary control in all departments. By exercising that control. together with tha expand- ed revenues for the year. we an- ticipate a surplus on Current Ac- count of 81,100,523. after providing 8360.250. for debt retirement.

on Ordinary or Current Account the Province expects to collect by March 81. 1951 so.m,411.. or sun,- 435. more than was anticipated.

our Ordinary Expenditures for ths same period 8n.7.1a,i54., up some 5110.000.

REVENUE

A summary of the Ordinary Re- venues for the current year is as follows:

From the Federal Govei-anus

Subsidies g "mg. TEX Rental Agreement 4,s14.s7s K h . ussisn . if venttona Jug Total from Fedei-.1

Government 35,419,; From Provincial sources

Taxes

lnco E1 Gaulmeon ectrlclty 8 50.000.

7

Amusements gnu. I-"1"" moon. Tobacco 1.0.”.

8!,lI4,II.

l.tt'cnsc.I, Permits and Fees Motor Vehicle Licenses 8 560.3. (Zornorauon Licenaas Italt-onwood,

Boat-it Grove Old lfrm-incial Iansisriurn

im in,4ss gourt Fees up if-ii"i.'li”'i'l.”3.'&n.. 133: ;mf,- can-st . etc. 11,191.

--ti 55- sun.

ward Island. It has added. at least. four months to the period of ear- lier normal operations. What this may mean in dollars and cents to business and to the public in gener- al is most difficult to estimate. Judging. however, from the increa- ses ln returns from gasoline tan and motor vehicle registrations and the relative prosperity of our people, the financial uplift must be regarded as impressive.

that the revenue from the sale of liquor has not increased. While on this subject I should like to make a few observations. If liquor falls within the luxury category. then provincial revenues from this source will be highly sensitive to economic 'i t ; if on the other hand, as some contend, liquor as a social necessity, liquor revenues should be fairly stable. However. the most recent figures on liquor sales indicate a levelling off in I venue from this source. DISTRIBUTING TOTAL

Even with a decline in the sale of liquor. the amount of money spent on this commodity alone is a disturbing total. Taking into con- sideration nll those factors whlbh tend to a lower overhead and a- largar margin of profit. it is still a total that causes one to wonder-

hum whether more liquor is being con-

sumedw by Individuals, or whether more individuals are consurnlng liquor. The alternatives are not reassuring. The situation, indeed, gives us cause for further think- ing. When we consider the amounts that the public willingly and glad- ly pays for nonessentlnls, as oppos- ed to the contributions grudging- ly given in respect to health, ed- ucation and social services, we are reminded of the utterance of Benjamin Franklin -- as found- ed in truth today as they were on the data of their delivery, almost two hundred years ago.

"Friends and neighbours. The taxes are indeed heavy-and if thou laid on by the government were the only ones we had to pay we might the more easily dis- charge them. but we have many others and much more grievous to some of us. We are taxed twice I! mllllil by our Idleness, three times as much by our Pride. and

It is most encouraging to note.

is replaced by the new federal- provlncial tax-sharing arrange- ment. In the budget part of this speech I will remark on this new proposal. and its method of cal- culation.

From the Interim Statement you will note that over 55 per cent of our revenue is fixed and subject to periodic agreements with the federal government. the remain- ing 45 per cent finds its main sour- can in the tax on gasoline, motor vehicle fees. and the sale of liquor. These major items of revenus are greatly variable. They are subject to the spending power of the peo- pic. This shows how vulnerable our provincial economy can be as a result of national and local condi- tions.

EXPENDITURE!

At the last session of the Legis- lature there was presented for your consideration and approval the Estimates of Expenditure for tbs present fiscal year which ends the 31st of this month.

These estimates. as brought down. made provision for some in- creases in program costs. It was not anticipated. however, that the price rise would be so great and swift to increase in some cues to over 25 per cent. Consequently, nearly all departments found it exceedingly difficult to remain within their appropriations and yet carry forward the programs as planned.

The Interim Statement shows that for the current year expendi- tures on Ordinary Account reach- ed an aggregate total of 86,735,154, as compared to the aforesaid Ea- timates of 8ll.5li4.33:l.. br 8150.821, more than we budgeted for last spring -- less than I perl cent. Very good administration control I should say.

During the year we spent on it- ems of a capital nature, including loans and advances for fisheries and industrial purposes. and rural electrification - 84,735,908. Off- setting these expenditures will be capital a 051,612, thus leaving a net capi- tal disbursement for the current year of 83.664196.

A comparative summary of ex- Dendllllrel, with estimates for both Ordinary and Capital. includ- ing loans and advances mnds for

Function

DEBT CHARGE!

On reviewing these expenditures 1 was quits concerned with the large amount of 81,470,625. for aer- vicing the public debt. of this amount 8560.250. was required for debt retirement. The toal 81.470.- 625. represents liiproximately 18 per cent of the revenue of the Pro-

I054-57

1956-57 is as follows:

EXPENDITURES - ORDINARY AND CAPITAL For the Fiscal Year mailing list March, 1857

Estimates Forecast Increase 2 Function 1054-57 1054-57 Decrease (-) Debt Charges 31,535,592 s1.47s,s2s .5";-1 I'ilcs;th ............. .....'T" .. 1,536,741 1,505,933 . I Eguclgf and Labour ... E11520 810,957 7.67 0” 1.445.359 -21.121 A””""Y-5""-"'4 225.149 .. a sat Legislation p mlgag 9"” Agriculture ....... 500.320 s52.zis sijau 1300:”?-I&V.F:i?ltu1;n1 Resources s erea ........-.. 128.260 115, .. Hlrgliwgys, Bridges. 3” ""1 err es, etc. . 1,3 . Public Works 33:3 I ”;:;23';, Refunds of Rcven 345,000 375,390 29:” Grlnta and Assistance to Municipalities and in. corporstcd Vill 123, 1 Insurance Premlumnsul .. 30.15103 1333.3 g. "1" Insurance Reserve Fund 20.000 zoom g. . General Government 411.513 437.352 35 g. Total Ordinary Expenditure ....8l,564,8:l8 83,735,154 3 150,3”

CAPITAL sun o-rnax EXTRAORDINARY n

isnates Forecast Inereaaa 3

men Decrease (-1

mlhwlYl.B1'l e 1. 2.930. Fixed Assets ..s "'g3'& Loans and Advancex 120.1110 1o5'sgg .. ":3; OHICET Extraordinary ' xpenditurea , Rural Electrification 3,3 ' 33:: Total Capital and other Extraordinary 8,011.3 3 4,735,903 g mg. Total ordinary and Capital Expenditures ........8l2,495,5aI gupgymg 3 my

mg thought with you. IIEALTI AND WEIIARI Coming now to expenditures in the fields of Public Health. and in welfare. the overall estinaats picture changed very little. Bow- OVOP. Mr. speaker, I would llh to make a few observations. Governments all over diis coun- try during the past twenty-flvs

lightened concept of human needs, been forced into the provision of more and more services for the use of their people. We In Prinsa Inward Island have baaa as as-

filed. A striking example is our-Isalth Wdf whm

iftlrs have. slowly but surely in video

I: Eat voted

Agriculture the adtq of the Gevarantsat is to put at the dis- pasal of our farmers and rural people, generally, the faculties aad the services which will asa- ble than to carry on their lashin- trini work efficiently and with a reasonable remuneration. It is de- signed to assist our farmers in-

spaed the flow of production, to secure new outlets for the of their agricultural harvest. To, give this service and asslatnncel the Department of Agriculture forecasts an expenditure of 8552.- 210. for the fiscal year some 850.000 over and above the amount appropriated.

HIGHWAYS IXPENDITUIIE

It will be noted from the Inter- im Statement of Revenue and Ex- penditures that, with the excep-

FOBECAST OF DE

retirement for the fiscal year

From the above we deduct the the same period

for Debt Retirement

or an increase in liabilities for the present fiscal year of 81,793,825, of which sum 836.610. represents the net amount of loans and ad- vances made during the year. Al- though theac loans temprnrily in- crease the debt for the year. nev- ertheless they are recoverable at a later date. DEBENTURE ACCOUNT

The high rating which this prov- incs continues to enjoy in the fi- nancial mnrket is evidenced by the fact that despite a vacillating market we recently sold 82,500,- 000. 5 per cent - 17 year callable debentures at a cost of 5.17 per cent, which compares favourably with similar issues sold by the Provinces of Nova Scotla, New Brunswick and Ontario Hydro-EL ectric Guaranteed. .

During the current fiscal year we redeemed two issues which nia- tured on August 1st and Decem- ber 15th for 81.250.000.00 and 81,- 000.000.00 respectively. The Sink- ing Fund accumulation for the two Issues totalled 8623.375. The bal- ance remaining 81,426,625, will be refunded under authority of an Act passed in this legislature last

','- amounting to 81,- M" h

c . 1057-68 BUDGET

We now come to the budget for the forthcoming fiscal year. Be- fore proceeding with the Estimat- es of Revenue and Expenditures I should like to comment on the general situation as it affects the provincial budget.

The prescntntion of a budget involving, as it does, an expendi- ture of over 80 million on Cur- rent Account and providing for Capital and other Extraordinary Expenditures of an additional 6'1: million for a Province the sins of ours. with a population of only 100,000 people. carries with it a tremendous responsibility. I per- sonally think it is a very gener- ous grant of supply.

The prepatlon of such a budget was the ca 0 of much concern. Even ten years ago, for the year ended list of March, 1947, the Treasurer then only had to deal with an Ordinary Expenditure of 83.000000, a total expenditure of less than 85 million and a public debt to be serviced of only a little over 10Va million dollars. Today, the debt is double; current oper- ations almost 2Va times what they were in 1046-47 and the provision for items of a capital and develop- ment nature increased over five times as much again. TREMENDOU8 EXPANSION

That is but an indication of the problem we have to face today in the realm of public finance and the tremendous pension of gov- ernmentnl functions taking place all over Canada. with the ever growing demands for increased public services.

The Government has endeavour- ed to maintain a sensible and equit- able balance. not only between re- venues and expenditures but he- twesn social service necessary for the welfare of our people today, and capital expenditures essential to the continued progress and de- velopment of our Province as a whole.

As intimated in my Budget Speech of a year ago. the Govern- ment's position is clear and defin- ite. With due regard. at all times, for the welfare of the people as a whole. we propose to expand the annual budgetary provisions pro- gressively and in keeping with the economic development of the Pro- . But, our people must be

ury. D APPROPRIATIONS

In our 5 7, proposals. you will increased appropriations to

Illltt transportation means to the the distributor and to generally . You will the increased appropriations

teayswsvowdsndormsir

turiiiiia out a better product, ial And finally 8 and storm in January of last year, 1he;Api'tl 1. ulelslaot and rain did much damage-19:8

On March 31. 1956 the lat debt of the Province was .. . To this we add the forecast expenditure

Deduct from the above sub-total ithe amount provided

And we have left a forecast net debt as of March 51. 1957 of .822,054.8.'i4

pnatssas. lawyer. is Capit As-. ieount. way Construction law ciudtng da ifighuayp rand Bridps. required an addi- itioaal appropriation of ll" of which will be fully explain- ied by the Minister of Highways in ,bis review of the 1066 activities of his department.

due to the serious

1 I

to our rural electrification instal- lations. However, with good work-. lmanship from line crews the dam-

lage was repaired with marked

1956-57, lrapidity. and our 1056 program of current

rural electrification continued to advance towards it ultimate goal. It is forecast that the expenditure lfor 195037 will be in the vlclnityi lof 8450.000.

i In my analysis of the financial statements under review I turn

March 31, 1957 - BT MARCH 01, 1057

820,261,011 0 including debt 1956-57 . ......a-...... l3,471,W 8aa.7a2.tm'

11,115.93! 822,615,064

anticipated revenue for

560.250

is no denying that pressures on our revenues are de. ' ,' 0ur' revenues have now reached its peak level, and future gains. if any, will be moderate. The time is here when further increases in expenditure cannot be accommo- dated within the dimensions of our present revenue. We are, there- fore, obliged either to halt expen- dlture increases or obtain new sources of lrevenue. Our present requirements are very large and perhaps it would be better to con- centrate on essential: and leave to the future the things that we would like to do but cannot for the time being afford. That deci- sion must be made now for if we want to go ahead all of us must be willing to contribute financial- ly to the cost.

Unfortunately for us, the newi Federal-Provincial Tax-Sharing i Arrangements does not favour thisl Province and our 1957-56 tax and general subsidy remains at the same level as it was for the cur- rent fiscal year. i

If a more realistic attitude on the part of the Federal Govern- ment towards this Provincc, in re- lation to our fiscal needs. had been considered and a better financial arrangement approved. then we could have been in a better finan- cial position to continue our ef- forts.

GASOLINE TAX

I am almost certain that it has been evident to nearly everyone that we could not continue to fi- nance our enormously increased expenditure for highways without some upward boost in the gasoline tax.

In preparing the revenue part of the budget it became immed- iately apparent that in tho finan- cing of our road program, and the financing of the increased ex- penditure of other government de- partments, the Provincial Treas- ury would requlra revenues consi- derably in excess of those of any previous year. Even allowing for, increases in yields from the pres-I ent tax rates and from the olher' source of revenues, our revenue forecast indicates an additional Q million dollars required to meet all expenditures including the full road program. To attempt the raise gasoline tax revenues by the amount required to meet the en- tire l957-58 highway expenditure would involve the imposition of an unreasonably high tax and would indeed be likely to thwart the very purpose of the increased levy. In the light of all circum- stances. however, it does seem rea- sonable to increase our gasoline tax rate slightly.

INCREASE ANNOUNCED

Grave an the decision is to in- troduce new taxation or propose increases in exisiting taxes, the Government has accepted its re- sponsibility. We propose to raise the tax on gasoline three cents per gallon. This will ring the tax up to sixteen cents per gallon which will still be lower than thet rate in Nova Scotia and equal not that now in force in Ngw Brung- wicln We also propose to rebate- one cent of the increased tax to farmers and fishermen in accord- nnce with the provisions of the Act.

Another change in our tax sys- tem is proposed. and I refer to the changeover in the method of collection and remluton of thc tax on the sale of tgucco, prev. iously. the tax was collected and turned in to the Treasury by re-j tailers. By the new method, the, tax is to be remitted by the whole- saler. Previous misgiviaga in re. gsrd to the former method of re-. mliilnif will be corrected. Every-i one will be better satisfied: the

the province will ha ,7 . a ti. nubile will have no I?.lsflclt1ifin :1

lettvs-and sf&.4D.aothatthefararai

aIa1nouethvl5Q

results of next year's operatin will he an increase in Debt J 81.615046,

It is anticipated. there the net debt of the Province as I March 81. 1036 will he as follows: Forecast nel debt March 31. 1937 Adv Estimatcd increase from 1937 to March 31.

For a total of

For the forthcoming fiscal year I am budgeting for a revenue 41 account of 8l0.l96.571.. or for an increase of 8601.320. over that estimated for the present cur- rent year.

The proposed estimated ordin- ary expenditures for the coming year tnal 89.i.'i2.4l7, which, when compared with the estimates for