Government of Newfoundland and Labrador Budget 96

Spending Program

Government will achieve a surplus on its Current Account Budget.
The Current Account surplus is forecast at $61,350,300; Capital Account net expenditures are forecast at $76,121,700.
The projected gross Current Account expenditure is estimated to be $3,207,351,600; the gross Capital Account expenditure is projected at $200, 453, 000 for a total Current and Capital Account expenditure of $3,407,804,600.
The Province will have a budgetary borrowing requirement of $44.8 million in 1996-97.
The structural deficit has decreased slightly to $87 million from $90 million last year.
The Budget contains a contingency reserve of $30,000,000 to guard against unfavorable budget variances which may arise during the year.

Health Care

The Health Care sector's operating budget has been increased by $2.2 million to $903.3 million.
This increased funding will be directed towards cardiac surgery and for community based health programs.
Government has committed to maintaining this level of funding for three years.

Other Budgetary Initiatives

No increases in retail sales tax, gasoline or other consumption taxes.
No increase in corporate income tax.
No general increase in personal income tax.
A high income surtax levied on taxable income in excess of $60,000 will be introduced commencing in the 1996 taxation year.
Effective June, 1996, the rate of the financial corporations capital tax applied to banks and trust companies will be increased from 3 percent to 4 percent.
There are no unilateral wage rollbacks or benefit reductions for public sector employees.
Over 20 Boards, Agencies and Commissions will be abolished in 1996-97.
Significant restraint measures on all Government funded operations will continue during 1996-97. Total current and capital account gross expenditures will decrease by $80, 964, 000 compared to the 1995-96 revised spending levels.
Newfoundland and Labrador Hydro will continue to remit dividends to the Province.
Continued restructuring and reorganization to achieve efficiency of Government operations without impeding service to the public.
Health and Education reforms and restructuring will remain high priority items.
Salary costs, supplies, travel and telephone expenses in Government Departments will decrease by 6%; Purchased Services will decrease 9%; Professional Services will be reduced by 10% and Property, Furnishings and Equipment expenditures will be lowered by 29%.

Economic Initiatives

Although Government spending must be reduced, Government will continue to pursue policies that will promote economic development.
The Province has one of the most competitive corporate income tax systems in the country. Sales tax harmonization and EDGE incentives will continue to create new business ventures and employment.
The Canada-Newfoundland Economic Renewal Agreement will provide $100 million to the Province over the next 5 years.
$23 million of this Agreement will be spent in 1996-97 to encourage growth in key sectors such as aquaculture, advanced technology and tourism initiatives.
The 1997 celebration of John Cabot's voyage will provide a tourism investment opportunity of international significance.

Employment Initiatives

A 35% increase in funding to $895, 000 for Women's Employment Programs.
Funding for the Youth Employment Strategy will be virtually unchanged at $1,634,100. The program provides for educational, training and work opportunities for youth.
A 13% increase in funding to $1,700,000 for a wage subsidy program to encourage employers to hire recent graduates, the unemployed and the underemployed.

SUMMARY OF CURRENT REVENUES (By Source)
		                 WHERE THE MONEY COMES FROM


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       Percentage
	of Total		Source	                              Amount
						                      ($000)
    Revised   Estimate			                       Estimate	    Revised
    1995-95   1996-97			                        1996-97     1995-96

			 Provincial:
      16.8	16.6	   Retail Sales Tax			541,000	    565,424
      16.4	17.8	   Personal Income Tax			583,000	    553,632
       3.6	 3.7	   Gasoline Tax				120,600     121,947
       2.4	 2.3	   Newfoundland Liquor Corporation	 75,000	     81,450
       1.9	 1.5	   Corporate Income Tax			 50,500	     62,794
       1.9	 2.0	   Tobacco Tax				 64,000	     65,575
      14.0	13.1	   Other Provincial Sources		429,133	    470,754

      57.0	57.0	 Total: Provincial		      1,863,233   1,921,576

			 Government of Canada:
      27.0	28.7	   Equalization Payments		938,500	    911,598
      16.0	14.3	   Other Federal Sources	        466,969	    539,220

      43.0	43.0	 Total: Government of Canada	      1,405,469   1,450,818

     100.0     100.0	 Total				      3,268,702	  3,372,394

SUMMARY OF CURRENT ACCOUNT EXPENDITURES (By Function)
	                             WHERE THE MONEY GOES


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	Percentage
     	 of Total		Function of Expenditure		  	  Amount
					                                  ($000)
      Revised	Estimate		                         Estimate	  Revised
      1995-95	1996-97		                                  1996-97	  1995-96

			   Expenditure:
	20.6	  20.8	     Education				  679,289	  693,794
	22.6	  23.3	     Health				  762,442	  761,501
	16.2	  16.7	     Debt Charges and Other		  546,587	  547,785
			       Financial Expenses
	15.2	  15.8	     Social Welfare			  518,245	  511,937
	 3.6	   4.0	     Natural Resources, Agriculture,	  131,794	  122,673
			       Trade, Industry and Tourism
	 6.1	   6.6	     General Government			  215,591	  205,639
	 4.3	   4.3	     Protection to Persons and Property	  139,458	  143,807
	 2.8	   2.9	     Transportation and Communications	   94,081	   96,165
	 3.9	   3.7	     Other				  119,865	  131,613

	95.3	  98.1	   Total: Expenditures			3,207,352	3,214,914
	 4.7	   1.9	   Financial Contribution		   61,350	  157,480

       100.0	 100.0	   Total:				3,268,702	3,372,394

SUMMARY OF GROSS CAPITAL ACCOUNT EXPENDITURES
	                             (By Function)


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	Percentage
	of Total	  Category of Capital Expenditure		Amount
									($000)
      Revised	Estimate				       Estimate		Revised
      1995-96	1996-97					        1996-97		1995-96

			  Expenditure:
	32.5	  36.5	    Transportation Projects	         73,123		 88,881
	10.9	   7.6	    Resource Development	         15,282		 29,824
	29.1	  37.5	    Municipal Infrastructure	         75,219		 79,832
	 6.8	   3.7	    Health Facilities		          7,308		 18,494
	 5.6	   5.0	    Educational Facilities	         10,005		 15,387
	 8.9	   5.9	    Equipment Acquisitions, etc.         11,870		 24,490
	 6.2	   3.8	    Public Buildings		          7,646		 16,947

       100.0	 100.0	  Total: Expenditure		        200,453		273,855

			  Source of Financing:
	32.8	  45.6	    Government of Canada Revenues        91,343		 89,903
	11.1	  16.4	    Provincial Revenues		         32,988		 30,282
	56.1	  38.0	    Financial Requirement	         76,122		153,670

       100.0	 100.0	  Total: Sources		        200,453		273,855

SUMMARY OF GROSS GOVERNMENT EXPENDITURES
	                               CURRENT AND CAPITAL
	                                   (By Sector)


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	                      (TOTAL EXPENDITURE: $ 3,407,804,600)

	GROSS GOVERNMENT EXPENDITURE                          GENERAL GOVERNMENT SECTOR

	               Estimate	 Percentage		                        Estimate  Percentage
	                1996-97	  of Total		                         1996-97   of Total
	                ($000)	     %		                                  ($000)      %
Sector Expenditure			      Consolidated Fund Services	 616,303    18.1
  General Government	933,479     27.4      Executive Council	                  21,292     0.6
  Resource	        213,469	     6.3      Finance				  41,603     1.2
  Social	      2,260,857     66.3      Government Services and Lands	  23,273     0.7
                                              Legislature		          10,853     0.3
Total: Expenditure    3,407,805	   100.0      Public Service Commission		   1,887     0.1
					      Works, Services and Transportation 218,268     6.4

					      Total: General Government Sector	 933,479    27.4


	SOCIAL SECTOR		                     RESOURCE SECTOR
	               Estimate	 Percentage	                                Estimate  Percentage
	                1996-97	  of Total	                                 1996-97   of Total
	                 ($000)	      %	                                          ($000)      %

  Education	        714,994	    21.0	Development and Rural Renewal	  61,900     1.8
  Health	        915,108	    26.8	Environment and Labour	          12,096     0.4
  Justice	        108,629	     3.2	Fisheries and Aquaculture	  12,905     0.4
  Municipal and
    Provincial Affairs	145,184	     4.3	Forest Resources and Agrifoods	  52,693     1.5
  Newfoundland and Labrador			Industry, Trade and Technology	  28,889     0.9
  Housing Corporation	  8,200	     0.2	Mines and Energy	          10,167     0.3
  Social Services	368,742	    10.8	Tourism, Culture and Recreation	  34,819     1.0

Total: Social Sector  2,260,857	    66.3	Total: Resource Sector	         213,469     6.3

SUMMARY OF BUDGETARY FINANCING SOURCES
                   (For Gross Current and Capital Account Expenditures)


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     Percentage
      of Total		Category of Financing		                Amount

					 	                        ($000)
 Revised  Estimate		                                  Estimate      Revised
 1995-96   1996-97		                                   1996-97      1995-96

		     Revenue Sources:
   55.9	     55.2      Provincial				 1,896,221    1,951,858
   44.1	     43.5      Federal					 1,496,812    1,540,721

								 3,393,033    3,492,579
      -	      1.3    Budgetary Requirements:			    44,772	      -

  100.0	    100.0    Total: Sources				 3,437,805    3,492,579
		       Less : Budgetary Contribution			-	(3,810)
				Contingency Reserve		  (30,000)	      -
			Gross Current and Capital Expenditures:  3,407,805    3,488,769