A New Future, A Renewed Pride

Economic Performance

• Review of 2004:
  • Real GDP increased by 1.4% driven mainly by investment and consumer spending;
  • Capital investment increased to over $4.2 billion, up 13.8% over 2003 levels, largely due to the White Rose and Voisey’s Bay projects; and
  • Employment increased by 1.3% to 215,200 and the unemployment rate fell to 15.6%, its lowest level in 15 years.
     
• Forecast for 2005:
  • Real GDP is expected to grow by 2.1% as iron ore production rebounds and Voisey’s Bay shipments begin;
  • Capital investment is projected to increase by 1.9%; and
  • Employment is expected to grow by 1.4% to 218,200 and the unemployment rate is forecast to decline to 15.1%.

Fiscal Performance 2004-05

• Significant improvements in the province’s fiscal circumstances:
  • New Atlantic Accord arrangement;
  • Improvements to the Equalization Program; and
  • Higher offshore royalties.
     
• Deficit of $473 million versus budget target of $840 million.
   
• Cash shortfall of $14 million versus budget target of $362 million.

Fiscal Outlook 2005-06

• Deficit projected to be $492 million.
   
• Cash short fall estimated to be $62 million.
   
• No new taxes and only one tax rate increase. Effective 12:01 a.m., March 22, 2005, the tobacco tax rate on cigarettes will increase by one cent per cigarette and by five cents per gram of fine-cut tobacco.

Investing Strategically To Strengthen Our Province

• $6 million in operational funding is provided for The Rooms to assist in securing and celebrating our rich and dynamic culture.
   
• $2.29 million is earmarked for the Newfoundland and Labrador Film Development Corporation. Of that amount, $2 million will be used to assist the film industry through the Equity Investment Program, while the remainder will be used for core operational support.
   
• $2.4 million has been allocated to support the growth of cultural industries. This includes funding for the Cultural Economic Development Program, Music Industry Association of Newfoundland and Labrador, Heritage Foundation of Newfoundland and Labrador, Magnetic North Theatre Festival and the Art Procurement Program.
   
• An additional $1 million is allocated for tourism marketing, bringing the total tourism marketing budget to $8 million.
   
• An additional $160,300 is allocated for the Newfoundland and Labrador Arts Council (NLAC) of which $100,300 will be used for core programs and $60,000 will be used to support the NLAC 25th Anniversary Celebrations. This new funding brings government’s total contribution to NLAC in 2005-06 to $900,000.
   
• $500,000 has been provided to support the 2006 Labrador Winter Games.
   
• Government is prepared to provide $1.3 million over the next two years towards the future development of a new Provincial Training Centre. The Province is the first funding partner to confirm its intentions and is encouraging the Government of Canada and the City of St. John’s to join us.
   
• Beginning this year, $100,000 will be provided in each of the next three years for Destination Labrador to implement a marketing and product development program.

• Over $8 million in additional funding is provided for IT initiatives to assist in fulfilling government's commitment to streamline and enhance service delivery, reform IT management and operational practices, and work with local IT companies.
   
• $7.9 million, in addition to the $2.1 million previously allocated to the Small Business Seed Capital Equity Program, will be used to establish a new $10 million Small and Medium Enterprise (SME) Fund. This fund will be used to provide loans and equity investments to small and medium size businesses.
   
• $5 million is provided to establish a Regional/Sectorial Diversification Fund that will provide contributions for economic development initiatives that address regional and sectorial development, diversification and innovation.
   
• Funding for the Business and Marketing Development Program has been doubled from $500,000 to $1 million annually.
   
• $1 million has been allocated for the implementation of the provincial Innovation Strategy.
   

• $33.7 million provincial commitment to improve provincial roads. This includes a continuation of the commitment of $30 million for the Provincial Roads Improvements Program and $3.7 million in uncompleted road work which will be carried over from the 2004-05 fiscal year.
   
• $40 million is provided for continued work on Phase III of the Trans Labrador Highway, including carryover work from the 2004-05 construction season.
   
• Strategic investments will be made in ferries and marine infrastructure:
  • $2.97 million provided for refits to the MV Sir Robert Bond and MV Northern Ranger, which are part of the Labrador Marine Service;
  • $4 million allocated for annual and mid-life vessel refits for ferries that serve the island;
  • $1 million in new funding provided for capital improvements to the province's ferry terminals; and
  • $500,000 earmarked for planning work towards an implementation of a provincial vessel replacement strategy.

• Improvements to municipal infrastructure have been approved under the Multi-Year Capital Works Program, the Municipal Capital Works Program and the Canada / Newfoundland and Labrador Infrastructure  Program. The province's share of $46.5 million brings the total value of  this year's capital works to $83 million.
   
• The Municipal Rural Infrastructure Fund is also expected to cost share infrastructure projects valued at $84 million over five years and the federal gas tax rebate will invest $82.3 million over five years.
   
• $4.25 million is earmarked for the Community Enhancement Program to highlight employment projects which have an economic development or community infrastructure objective.

• In addition to the $10.1 million in federal-provincial funding available under the Agricultural Policy Framework Agreement, the province will invest another $4 million to commence new agricultural initiatives and expand existing programs. This includes $3.5 million for farmland consolidation and long-term development.
   
• $7.3 million is allocated for silviculture initiatives, including support for the Wooddale Provincial Tree Nursery and the Happy Valley-Goose Bay regional nursery, the reforestation program, and research and development initiatives.
   
• $3.5 million has been budgeted for forest resource road construction.
   
• $900,000 is provided to strategically position the energy sector to maximize benefits for Newfoundlanders and Labradorians, including development of a comprehensive Energy Plan.
   
• $800,000 is provided to expand the Inland Fisheries Enforcement Program to assist in addressing poaching problems and to protect our vital natural resources.

• A new Seafood Development and Diversification Division will be established to coordinate fisheries development responsibilities. This will see a greater emphasis on public and private sector partnerships to develop the harvesting, processing and marketing sectors.

 

Environment and Conservation

• $1 million is allocated to complete the clean-up of PCB contaminated material and hydrocarbon fuel contamination at the former military site in St. Anthony.
   
• $500,000 is provided to create the Centre of Environmental Excellence in Corner Brook. This funding will be used for a master plan and feasibility studies.
   
• $300,000 is allocated to fully operationalize the Institute for Biodiversity and Ecosystem Science at the Sir Wilfred Grenfell College.
   
• $250,000 will be spent to upgrade La Manche Provincial Park, including installation of a comfort station and related facilities.
   
• Funding of approximately $367,800 has been allocated for a Mealy Mountain caribou monitoring program in Labrador to ensure protection of the herd during the construction and operation of Phase III of the Trans Labrador Highway.

Investing In Our Social Responsibilities

• $20 million in one-time stabilization funding has been allocated to the Regional Integrated Health Authorities to assist them to achieve their budget targets.
   
• Funding of $23.2 million is provided to reduce patient wait times and improve access to key services by purchasing new medical equipment and expanding services. Some of the items included in this funding are:

Equipment Purchases:

• $2.6 million for a second MRI unit in St. John's;
• $2 million towards replacing two existing CT scanners with new multi-slice CT scanners at the Health Sciences Centre and St. Clare's Hospital;
• $1.3 million for new ultrasound equipment in Carbonear, Corner Brook, St. John's and Labrador; and
• $6.2 million for nuclear medicine gamma cameras, mammography units, endoscopy equipment and laparoscopic equipment.

Expanded Services:

• $3.5 million to increase surgical capacity for cancer patients;
• $2.6 million to increase surgical capacity for joint replacement at the St. John's hospitals;
• $1.2 million to increase cardiac surgeries and to improve access to echocardiograms; and
• $1.3 million to support dialysis services in Gander and Carbonear; introduce Visudyne, a new photo-dynamic therapy for macular degeneration; extend mammography and endoscopy services in Grand Falls-Windsor; enhance cardio perfusion tests and bone scans in Gander; and extend access to chemotherapy and radiation at the Newfoundland Cancer Treatment and Research Foundation Centre in St. John's.
  
   
• $4 million is provided to expand and enhance the Picture Archiving Communications Systems.
   
• $7 million is budgeted to expand the provincial drug program. Approximately $2 million of this funding will support the associated costs of new drugs such as Remicade and Enbrel, while the remaining $5 million is earmarked to help the program meet growing demands and increased utilization. This brings government's total investment in the prescription drug program to $114 million.
   
• $1 million is devoted to implement initiatives consistent with the advice of the OxyContin Task Force. This includes establishing a methadone maintenance program.
   
• $740,000 is provided for gambling addiction services and awareness. As well, government is freezing the number of VLTs in the province at the current amount of 2,687 and will begin a five year reduction plan next year to reduce the number of machines by approximately 15%.
   
• $2.7 million is allocated to proceed with the detailed design and initial site work for a new long-term care home in Corner Brook.
   
• $1.4 million is allocated to begin detail design and site work for a new long-term care home in Clarenville.
   
• $200,000 is provided to begin planning and develop conceptual drawings for a new long-term care home in Happy Valley-Goose Bay.
   
• Effective April 1, 2005, $5 million will be provided to increase the home support rate so that employers of home support workers can provide a 50-cents-per-hour wage increase to their workers in recognition of the valuable contribution they make.
   
• $4 million is available for personal and community care homes to assist operators with the installation of sprinkler systems in these homes.
   
• An additional $1 million is allocated for Primary Mental Health Services. With these new resources, government is living up to its commitment to provide better access to services for those suffering with mental illness.
   
• $567,000 is available to assist Labradorians access health services outside their communities.

• $6.2 million is provided to the Student Investment and Opportunities Corporation for youth employment and career initiatives.
   
• $2 million will be invested over the next three years in employment and career planning, beginning in 2005-06 with $500,000 to direct more services to Income Support clients, including youth.
   
• An additional $1 million is provided in 2005-06 to increase income support rates for couples without children and single clients. Support benefit rates will increase by 1% on July 1, 2005 and another 1% on January 1, 2006.
   
• Beginning in September 2005, a new Stay in School Incentive Allowance will be established. A total of $600,000 is provided to help offset the loss of child benefits for families receiving income support and to encourage youth to complete high school.
   
• $350,000 is allocated for an improved earnings exemption for working Income Support clients that allows clients to keep 10% of their earnings beyond the current levels.
   
• An additional $411,000 is allocated to the Labour Market Development Agreement for Person with Disabilities to enter the work force and maintain employment.
   
• $500,000 is provided to help young people get the support they need, including $250,000 to support the Kids Eat Smart Foundation program and $250,000 for youth recreational and extra-curricular programs.
   
• $250,000 is provided to increase the Newfoundland and Labrador Child Benefit.
   
• $200,000 is allocated towards the development of an anti-poverty strategy.

• Increased funding is allocated to support the operation of eight Status of Women Councils/Centres.
   

• $500,000 is committed for violence prevention work in this province.

• Four new RCMP officers will be hired to increase police resources and enhance public safety.
   
• Funding of $183,000 is provided to support the National Sex Offender Registry.
   
• $400,000 is provided for the planning and design of a Supreme /Provincial Court building in Corner Brook.
   
• $183,000 is allocated for a court security program for the Supreme and Provincial Courts in Corner Brook and the Provincial Court in Stephenville.
   
• Start-up funding of approximately $255,000 is provided to create a new Victims Services Program for Children. A Provincial Victim Fine Surcharge which will be applied to Provincial Statute offences will fund this program over the long term.

K to 12 System

• $26 million is provided for school infrastructure, including construction, major maintenance, renovations, upgrading, extensions and re-development of aging buildings. Included in this funding is an increased allocation for major maintenance projects to $12 million and $4 million carried over from the previous year.
   
• $250,000 is committed to allow school boards to undertake a long-term facilities planning process that will assess the suitability of existing buildings and estimate future needs for school infrastructure.
   
• 52 teaching units will be reinvested to address primary class size issues. Redeploying these teaching units back into the system represents and investment of $3.1 million annually.
   
• Approximately $3 million per year, over the next three years, is provided to implement Cultural Connections, a comprehensive, sustainable fine arts and culture strategy in our schools. The strategy will include the redeploying of an additional 23 teaching units to support enhanced music and cultural programs.
   
• $3 million is allocated to begin to reduce the age of school buses, and address maintenance and bus driver training issues. This includes funding to finance 53 brand new school buses for our children.
   
• An extra $2.5 million, over and above the $4 million base budget, is provided to support the purchase of new learning resources to ensure the province's curriculum remains current.
   
• $1 million is provided to purchase physical education equipment for schools to promote healthier lifestyles.
   
• $500,000 is committed to begin the process of addressing issues identified in the federally-commissioned report on Innu education, commonly known as the Philpott report.

Post-Secondary Education

• Funding is provided to Memorial University and the College of the North Atlantic to enable these institutions to extend the tuition freeze. This freeze will mean tuition in this province remains the lowest rate in the country and 40 percent lower than the national average.
   
• $14.7 million has been allocated for implementation of initiatives arising from the White Paper on Post-Secondary Education.
   
• An additional $230,000 is provided for the Adult Basic Education Level 1 pilot programs, bringing total funding to $530,000.

Charts

• Summary of Current Revenues (By Source) - Where the Money Comes From (PDF)
• Summary of Current Accounts Expenditures (By Function) - Where the Money Goes (PDF)
• Summary of Gross Capital Account Expenditures (By Function) (PDF)
• Summary of Gross Government Expenditures - Current and Capital (By Sector) (PDF)
• Summary of Budgetary Financing Sources (For Gross Current and Capital Account Expenditures) (PDF)

Back to Budget 2005