The Economy

Mr. Speaker, our strong fiscal performance has allowed us to take bold measures to improve the lives of Newfoundlanders and Labradorians by enhancing existing programs and services, offering new programs and services, providing support for the vulnerable, building new infrastructure and rebuilding old, lowering taxes and paying down debt.

Fiscal health and economic strength go hand-in-hand. Economic performance provides a measure of the improvement in the lives of our people.

Economic Performance 2007

Last year, the number of people employed in our province grew. The unemployment rate fell to 13.6 per cent, a reduction of 1.2 percentage points from the previous year. While this unemployment rate is the lowest in 26 years, Mr Speaker, this rate is still unacceptably high, so we will continue to implement policies that see this number decline.

Last year, personal income grew by 4.3 per cent, while the largest personal income tax cut in the province’s history put more money back into the hands of taxpayers, boosting personal disposable income growth by five per cent. This growth in disposable income, along with increased consumer confidence, resulted in exceptional growth in retail sales of 9.5 per cent. Residential construction investment increased by an impressive 9.9 per cent with gains in both new and renovation spending, with 2,652 housing starts for the year.

Real Gross Domestic Product (GDP) increased by 7.9 per cent last year driven largely by exports of oil and minerals followed by the consumer and government sectors.

2008 Expectations

Mr. Speaker, real GDP is forecast to decline by two per cent in 2008, resulting from lower offshore oil production. Nevertheless, capital investment is expected to increase by an extraordinary 15 per cent, largely on the strength of increased oil and gas investment. Combined capital expenditures on Hibernia, Terra Nova and White Rose are expected to be around $1 billion. This outstanding investment in this province speaks to the continued momentum of our oil and gas industry.

Mr. Speaker, the momentum in residential construction is expected to continue as the number of housing starts this year is expected to be 2,657, a level consistent with last year and an indicator of high consumer confidence.

Last year, the unemployment rate was at a 26 year low. This year, employment is expected to increase by 1.5 per cent, adding another 3,300 jobs, and shaving another 1.2 percentage points off the unemployment rate to 12.4 per cent.

Anyone familiar with the history of Newfoundland and Labrador knows that out-migration has been part of us for a long, long time. All of us have felt the sense of loss as loved ones moved away to find work, often sacrificing a better quality of life in the bargain. We are about to turn a new page in the history of Newfoundland and Labrador. Never in the history of the province has there been greater opportunity for young people, especially those with post-secondary education, and, in particular, those with skilled trades.

Mr. Speaker, we have more jobs being created than people entering the work force, and we have many major projects operating or on the horizon including Hibernia, Terra Nova, White Rose, Hebron, Voisey’s Bay, a nickel processing facility, expansion at IOCC, the Lower Churchill, a potential new liquefied natural gas transshipment terminal, a potential new refinery and potential for a large shipbuilding contract at Marystown. In order to fill these jobs, we will have to attract people back to the province. It has already begun. For the second half of the 2007 calendar year, there was net in-migration of almost 2,000 people to Newfoundland and Labrador. Most of the people moving to the province came from Alberta and Ontario, and we look forward to welcoming more in the years ahead.