Legislative Assembly

on September 16, 1959 it amounted to $30,281,610. An increase of nearly $25 million under the Shaw Government. In addition, the indirect debt by way of guarantees to municipalities, school districts, industrial development and other

guarantees and contingent liabilities rose from $3,439,050 to a new high of $22,637,063.

For comparison with our neighbouring provinces, the net debt per capita as

shown by our external auditors, on Appendix 12, in their report of July 28, 1966 is as follows:

Nova Scotia New Brunswick P. E. Island 1964 $234. $236. $368. 1965 230. 239. 407. 1966 Not Available 237. 456.

These figures, Mr. Speaker, are not produced for political reasons but are resented for the cimpose of showing the Honourable Members why this Government s deeply conceme over the increasing costs of public services, the steadily mounting debt, and the necessity to exercise some restraint and control over public spending.

Unless we slow down, Mr. Speaker, the already over-burdened taxpayer is going to find it even more difficult.

The level of spending already established requires continued borrowing. Make no mistake — this Province’s debt will continue to increase for several years. This

grovinlce has become addicted to spending, and the cure must be a gradual with- rawa .

As Honourable Members will notice from the estimates presented here tonight, the increase in the debt for the coming year is about $2.000,000. less than that pro- vided for in last year’s estimates (ignoring the “sale” of the Provincial Administra-

tive Building). I hesitate to compare our program with the appalling deficit actually incurred for the year 1966-67.

If we admit, and we do admit. that continued borrowing will be necessary to finance capital expenditures, as well as to fund the present short term liabilities, how then can we maintain the investor’s confidence? By a reduction, year by year, in the additional debt we incur: by restraint in both ordinary and capital e di- tures; by the courage to take the unpopular steps to increase revenues, as th s be-

come: necessary. If we are living beyond our means there are only three things we can 0:

(1) Continue borrowing to cover our deficits; (2) Reduce our spending; (3) Increase our revenues by taxation.

Can we continue to borrow indefinitely? I suggest, Mr. Speaker, that just as

there is a limit to the amount an individual may borrow there is also a limit to gov- ernment borrowing.

Where does one begin to reduce spending? Increases in salaries are built into

a schedule rising annually. In addition we must revise our salary schedules to com- with the rest of Canada in order to retain our civil servants. Health, Welfare, ducation, and Agriculture all need more funds to provide the services which the public expect. As we continue to borrow we must provide about $90,000. per year in debt service for every million borrowed. Over the last five years our ordinary ex-

Eenditures have risen at an average of 11% per annum. We cannot reduce spending, ut we must control its increase.

Our revenues are increasing each year. Approximately 39% of our total revenue is derived from provincial sources. It is quite obvious that with such a small fer- centage coming from local sources, very substantial increases in tax rates woul be required to provide any worthwhile addition to our total revenue.

0f the remaining 61% received from the Federal Government almost one-third of this is received in the form of conditional grants which require the Province to make e enditures in order to receive a partial payment from Ottawa. The other two-thirxifs received from the Government of Canada is not related to Provincial

488—