Budget 2009 announced today is touted as a financial plan aimed to steer the province through an unsteady economic sea balanced on a sturdy fiscal ship the Williams Government says it has built over the past few years.
The budget outlines increased spending while running a deficit of about $750 million for 2009-10, so spending for important programs and services will not be cut.
Total spending is forecast at $6.7-billion. The budget includes significant increases for health and education, and invests in economic development initiatives, offers a tax reduction for low-income earners, and tackles issues of poverty.
Finance Minister Jerome Kennedy brought down the budget titled "Budget 2009: Building on Our Strong Foundation" in the House of Assembly this afternoon. The document outlines targetted expenditures in economic development, infrastructure, healthcare, education, poverty reduction and the environment. It also promises to deal with the economic issues facing the province without having to cut programs.
"Right now all around the world, there is an economic storm, but in this province, our confidence remains unshaken because our foundation is rock solid," Kennedy said in his budget speech.
"We have confidence that comes from knowing that our approach has been proven to succeed. Having plotted the course that leads from decline to growth, we will stay the course."
The provincial government is forecasting a revised surplus of $1.3 billion for the past fiscal year, 2008-09. When a one-time adjustment for the 2005 Atlantic Accord is included, the total surplus is $2.4 billion.
More than half of the deficit forecast for 2009-10 - $414 million - can be attributed to the unilateral action of the federal government to eliminate benefits this year under the 1985 Atlantic Accord, budget documents state. The balance is primarily attributed to a decline in the value of the province's pooled pension fund.
"The federal government, in its recent budget, imposed a massive cut on just one province, and that province is ours, contravening a long-standing agreement they had made with Newfoundland and Labrador," Kennedy said.
"We as Newfoundlanders and Labradorians are outraged that, after working so hard to achieve a greater measure of fairness and self-reliance in this federation, we are now being punished for our initiative.
One of the key measures taken in past years to enable the province to meet financial challenges in these times of economic uncertainty, Kennedy noted, was the focus on debt reduction. Four years ago, the province's net debt was approaching $12 billion - about $23,000 for every man, woman and child - well over twice the per capita national average.
"At March 31, we expect that net debt will be $7.9 billion, with net debt per capita reduced to about $15,500," Kennedy said.
Among the highlights for Budget 2009:
• A record $2.6 billion for health and community services, including investments to strengthen the health-care system based on the recommendations of the Cameron Inquiry.
• An additional $130.9 million in education this year to bring the total budget to $1.3 billion. This includes $5 million to eliminate the interest on the provincial portion of student loans, support for debt reduction initiatives for current post-secondary students and those now in repayment, and infrastructure needs in both the K-12 and post-secondary systems.
• An investment of over $40 million for Grand Falls-Windsor and region.
• About $900 million invested for economic development and stimulus. This includes a 50 per cent increase in infrastructure over last year including projects such as roads, hospitals, schools and long-term care facilities. This is expected to create 5,400 jobs in the province this year.
• A $228 million equity investment by Nalcor Energy to take full advantage of potential opportunities, including projects such as Hebron, White Rose Expansion and the Lower Churchill development.
• Money for research and development.
• Implementation of new tax reductions for low-income earners.
• More money to address growth in the home support program and foster care.
• The creation of a new department responsible for Child, Youth and Family Services.
• An amount of $132.2 million to target poverty reduction.
• An investment of more than $135 million in Labrador through the Northern Strategic Plan.
