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Budget Highlights

Protecting our Future

Budget Overview

Economic Performance

  • 2003-04
    • Real GDP grew by 4.7%, led by growth in exports and consumer spending.
    • Offshore oil production grew by 17.9% to 123.0 million barrels.
    • Employment increased by 1.8% to 217,800 on an annual average basis.
    • Real personal income grew by 1.4% and real disposable income increased by 1.1%.
  • 2004-05
    • Real GDP is expected to grow by 1.3% driven mainly by consumer spending and investment.
    • Employment is expected to grow by 0.9% to 219,700 and the unemployment rate is set to decline to 16.4%.
    • Inflation is expected to be 1.8%, which is lower than inflation in 2003-04.
    • Retail sales are expected to increase by 3.0% to $5.5 billion.
    • Housing starts are estimated to be 2,600 units.
    • Capital investment is expected to increase by 10.5% to almost $4.2 billion, the highest level ever.

Fiscal Performance 2003-04

  • Accrual deficit of $958.7 million versus $665.9 million at budget.
  • Cash deficit of $406.6 million versus $286.6 million at budget.

Budget Outlook 2004-05

  • Accrual deficit of $839.6 million versus PricewaterhouseCoopers estimate of $988.9 million.
  • Cash deficit of $361.6 million versus PricewaterhouseCoopers estimate of $601.6 million.

Responsible Decisions

  • The PricewaterhouseCoopers report revealed that the fiscal outlook for the next four years is much worse than expected, and that the cash deficit cannot be eliminated by revenue growth alone.

  • Government is taking difficult but responsible decisions to protect the future of the province.
  • Closures
    • Salmonier Correctional Institution,
    • a 10 bed unit at Whitbourne Youth Centre,
    • 20 Human Resources, Labour and Employment offices.
  • Cancellations
    • New school in LíAnse au Loup and West Coast Exhibition Centre in Corner Brook,
    • healthcare facilities in Grand Bank, Grand Falls-Windsor and Gander.
  • Deferrals
    • Funding for a CT scanner in Burin,
    • redevelopment of Herdman Collegiate in Corner Brook,
    • the extension to Learyís Brook Junior High in St. Johnís,
    • the Mealy Mountain High School auditorium in Happy Valley-Goose Bay,
    • one year delay in the opening of The Rooms.
  • Workforce adjustment strategy
    • Government will achieve a reduction of approximately 4,000 positions in the public service over a four year period.
    • This reduction will be realized mainly through attrition and retirements.
    • Government has lived up to its commitment to avoid massive layoffs.
    • A clearing centre and other support programs will assist employees whose jobs are affected.
  • Health blueprint for reform
    • Reduction and integration of health boards.
    • Fair and equitable approach to location of health services to be established.
    • Development of a skill mix framework to ensure that the right mixture of health care professionals is available to deliver high quality and effective services.
    • Development of a "best practices" culture to continuously evaluate all areas of clinical and support services to improve effectiveness and efficiency.
  • Reduction of school boards from eleven to four plus one Francophone board, for anticipated savings of at least $6 million annually.
  • Implementation of the Sparkes-Williams formula for teacher allocations over two years.
  • Increases in tobacco taxes.
  • Increased vehicle registration fees will provide an additional $7 million to the provincial roads program to perform preventative maintenance.

Our Social Responsibility

Government has a responsibility to ensure the efficient and effective delivery of resources to those who need them. Measures taken in this budget protect valuable social programs.

Health

  • An investment of $1 million for community mental health services in response to the Reid/Power Inquiry.
  • $8.6 million increase in the Drug Program to over $106 million, $800,000 is provided for a new chemotherapy drug to help fight cancer (Gleevac).
  • $4.3 million will be spent this year on additional primary health care projects.
  • Funding for additional social workers for Labrador and St. Johnís.
  • Implementation of year five of the Personal Care Home Strategy at an additional cost of $475,000, to increase personal care home rates for those who provide care to our seniors.
  • $200,000 to assist the new Ministerial Advisory Council for Aging and Seniors to ensure that the needs and concerns of seniors are properly understood and addressed. Government will also establish a Division of Aging and Seniors in the Department of Health and Community Services.
  • Funding is provided for a new Chief Nurse position within the Department of Health and Community Services.

Education

  • $22.1 million will be spent in 2004-05 on major capital construction projects to improve existing schools and construct new facilities.
    • $13.9 million of this is for projects already underway, including the new Francophone school/community centre, and extension and renovations at Northshore Elementary School (Meadows) and improvement to the St. Bernardís School in Mobile.
    • $8.2 million is for major maintenance projects.
  • Funding is allocated for creation of a Ministerial Council on Early Childhood Learning to foster comprehensive programs across all government departments and agencies that focus on the learning needs of children and their families.
  • $250,000 to proceed with a White Paper on Post Secondary Education.
  • Tuition is frozen at Memorial University and the College of the North Atlantic.

Help for Those Who Need it Most

  • Commencing in the 2005 taxation year, a Low Income Tax Credit will be instituted; individuals with net income up to $12,000 and families with net income up to $19,000 will pay no provincial personal income tax. The annual cost of this measure will be $5.3 million.
  • Indexing of the Seniorsí Benefit and the Newfoundland and Labrador Child Benefit to the Consumer Price Index will start in 2004 at a cost of $400,000.
  • Enhancement of the Mother Baby Nutritional Supplement to provide eligible mothers $90 at the time of birth.
  • $250,000 to implement a "Healthy Children - Healthy Schools" program.
  • $500,000 grant for the Kids Eat Smart Foundation.
  • Government will provide an extra $1.6 million to further enhance the Child Care Services Subsidy Program.
  • Additional $400,000 to expand the supported-employment program to assist people with disabilities to enter the workforce.
  • Additional $100,000 to address gambling addiction.
  • Increased funding for the Womenís Advisory Council and for eight Womenís Centres located throughout the province.

Policing and Justice

  • Train 75 new RNC officers over three years at Memorial University.
  • $2.25 million by 2007-08 to hire 45 new RNC officers.
  • Funding for an additional four RCMP officers in Labrador.
  • $1.5 million for new equipment and training for the RNC, some of which was recommended by the Reid-Power inquiry.
  • $2 million for the Supreme Court in Happy Valley-Goose Bay.


Investing in Our Future

As we restructure our social programs to make them more efficient and sustainable, we will also seek new revenues for social programs by investing strategically in economic growth and job creation.

  • A new Department of Business will be established, to be led by the Premier, with an annual budget of $1 million.
  • $350,000 provided for a Newfoundland and Labrador Office of Federal-Provincial Relations in Ottawa.
  • $1.25 million will be spent to implement the recommendations of the Dunne report on fish processing policy, to be offset by increased fees for fish processing licenses.
  • $1 million will be spent to preserve the provinceís contributions to fisheries and aquaculture development.
  • Cost-share with the federal government $7.5 million for year two of the federal/provincial agreement on Agricultural Policy Framework.
  • $500,000 for land development, allowing farmers to lease land not currently being used for agricultural purposes.
  • $80,000 for a focused effort on preparation of a comprehensive energy plan for the province.
  • $7.3 million for a silviculture program to help promote sustainable development in our forest resources.
  • $3.5 million for the Forest Resource Roads Program, allowing access to hard to harvest forestry stands and for infrastructure development for the coastal Labrador ferry service.
  • $7 million for tourism marketing initiatives. This is a $1 million increase over the last year, and further increases will be made each year until our marketing effort matches that of the Maritime provinces.
  • $825,000 is allocated to augment the $1.5 million in federal funding to grow cultural industries.
  • $150,000 for French Heritage Celebrations.
  • $250,000 grant to the Heritage Foundation of Newfoundland and Labrador.
  • $200,000 for the Music Industry Association of Newfoundland and Labrador.
  • A new Chief Information/Innovation Officer will lead a new Innovation and Advanced Technologies Branch within the Department of Innovation, Trade and Rural Development. This new branch will develop a comprehensive innovation strategy, for which $200,000 is earmarked.
  • $7 million in additional funding for a total of $30 million for the Provincial Roads Program.
  • $24 million to proceed with Phase III of the Trans Labrador Highway and complete Phase II.
  • $15.1 million in the Strategic Highway Infrastructure Program (upgrades to the TCH).
  • $1.5 million for capital improvements to island ferry terminals; $750,000 for upgrades and maintenance to ferry terminals for Coastal Labrador Ferry Services.
  • $2.4 million for the Ferry Vessel Refit Program.
  • $430,000 for Road Weather Information System (first of a three year project totaling $1 million to assist winter maintenance crews by more precisely predicting when and where to apply sand and salt).
  • $1.7 million from existing funds for a new Rural Secretariat as the focal point for government to work with local and regional partners to building strong and dynamic communities.
  • Funding for broadband internet infrastructure for rural communities.

  Back to Budget 2004


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