PREFACE
ECONOMIC OVERVIEW
OUR BUDGETARY POSITION
OUR RESPONSE
CONCLUSION
STATEMENTS
EXHIBITS
ECONOMIC OVERVIEW
The Short Term
Mr. Speaker, in the final analysis, the financial
strength of Government and the well-being of the people depend on
a strong economy.
During 1995, our economy grew for the third consecutive year,
despite the continued shutdown of the groundfishery. Our major
resource industries performed well, and there were positive
developments in the mining and oil and gas sectors.
Our newsprint mills at Grand Falls-Windsor, Corner Brook and
Stephenville have been operating near full capacity. During 1995,
the value of newsprint production increased by approximately 40
percent. Our silviculture programs will help meet future demand
for pulpwood.
During 1995, the landed value of our fish reached an all-time
high due to our shellfishery. Aquaculture production was close to
double the level of the previous year.
Click here for Chart - Real GDP and
Employment
However, as all parties acknowledged during the recent election
campaign, 1996 and 1997 will be difficult years for the economy.
Real gross domestic product, employment and incomes in the
Province will decline from last year's level. Hibernia spending
and employment will lessen as construction ends and production
begins.
In the short term, the social and economic adjustments due to the
continued closure of the groundfishery will result in population
declines.
Table 1
PROVINCE OF NEWFOUNDLAND
MAIN ECONOMIC INDICATORS
(percentage change)
1995 1996
Gross Domestic Product
Nominal 6.2 -2.4
Real 1.5 -4.3
Personal Income
Nominal 1.3 -3.5
Real -0.1 -4.5
Retail Sales
Nominal 1.5 -3.5
Real 0.7 -4.7
Capital Investment
Nominal 3.6 -18.2
Real 2.9 -17.7
Consumer Price Index 1.4 1.0
Employment 1.4 -5.0
Unemployment Rate (percent) 18.3 19.4
Our Economic Prospects
Mr. Speaker, we will meet the current challenges.
This Province will have a bright future. New industries, projects
and business opportunities will foster economic growth and
employment.
The Voisey's Bay mineral discovery in Labrador has revitalized
our mineral exploration sector. A mine, smelter and refinery will
be built in this Province. Jobs will be created. Benefits will
flow for all the people of our Province, especially those in
Labrador. Revenues will be generated for all levels of
Government. Other mining projects have commenced within the last
year, and exploration continues at unprecedented levels.
The Province's petroleum industry will also be a source of
growth. The first oil will flow from Hibernia next year.
Development of Terra Nova will be concluded and other east coast
offshore fields will follow. Hunt Oil will drill in the
Port-au-Port basin during 1996. Amoco Canada is expected to drill
two wells on the Grand Banks during 1997.
These developments will create economic benefits for Newfoundland
and Labrador and for the Government of Canada.
We must respect our resources. We have learned the importance of
conservation. The fishing industry sustained this Province and
the livelihoods of the people who live in our hundreds of fishing
communities for most of the last 500 years. Restructured,
well-managed harvesting and processing, and proper aquaculture
development, will maintain the integral role of the fishery in
our economy and culture.
This cultural richness is our greatest tourism asset. Our unique
and rugged character and country remain largely undiscovered. We
must develop it properly - promote it aggressively.
OUR BUDGETARY POSITION
Meeting Our Deficit Targets
Mr. Speaker, while we made substantial progress in
recent years, a significant structural deficit remained.
Government tabled a balanced Budget in 1995-96 - with the help of
$90 million of one-time revenues. Last December we took
corrective action totalling $60 million to meet reduced federal
revenues and increased expenditures.
As a result of those actions, the balanced Budget projected for
1995-96 has been achieved. For the first year since Confederation
our debt has not increased.
Yet, despite this accomplishment, an underlying deficit remains.
While our revenues decline, spending demands increase.
We must, therefore, use our limited financial resources
prudently.
Table 2
SUMMARY OF 1995-96 FINANCIAL PERFORMANCE
($ millions)
Budget Revised
1995-96 1995-96 Variance
Current Account
Gross Expenditure 3,270.4 3,214.9 55.5
Related Revenue 264.1 256.5 (7.6)
Net Expenditure 3,006.3 2,958.4 47.9
Provincial and Federal Revenues 3.134.2 3,115.9 (18.3)
Current Account Surplus 127.9 157.5 29.6
Capital Account
Gross Expenditure 272.8 273.9 (1.1)
Related Revenue 146.8 120.2 (26.6)
Net Expenditure 126.0 153.7 (27.7)
Total Budgetary Surplus 1.9 3.8 1.9
Lower Transfers for Social Programs
Governments everywhere are restraining their spending. The
Government of Canada, in reducing its deficit, has lowered
transfer payments for health care, post-secondary education, and
social assistance.
Federal transfer programs must recognize the varying costs and
needs dictated by differing social, economic and geographic
circumstances. The Canada Health and Social Transfer (CHST)
allocation mechanism announced in the 1996 Federal Budget does
not provide this recognition. It places increasingly greater
reliance upon a simple per-capita allocation at a time when this
Province's population is declining, and its needs increasing.
Click here for Chart - Projected Federal
Cash Transfers for Social Programs
Improving Our Tax System
Consumption taxes in the Province have long been the highest in
the country. In April, a Memorandum of Understanding was signed
with the federal government to harmonize the federal goods and
services tax and the provincial retail sales tax into a combined
15 percent value-added tax. This will be the largest single tax
reduction in the history of this Province. It will save taxpayers
over $100 million annually.
This new tax, with a rate reduction of almost 5 percent, will be
implemented on April 1, 1997 - just 10 months from now.
This $100 million shortfall will be offset over the first four
years by $348 million in transitional assistance from the
Government of Canada. The economic benefits of harmonization will
produce new revenues which will help offset the costs to both
levels of Government.
The benefits of this initiative are many and directly respond to
the people's wish for lower taxes, more jobs, and a stronger
economy. The after-tax price of most goods and services will
fall. The average tax burden will decrease at all income levels.
We will be more competitive locally, nationally, and
internationally. Our Province will be a more attractive place to
do business. This sales tax reform will simplify business
compliance and lower Government's costs.
Our Public Debt
Our debt is high. As our population declines, our per capita debt
increases. The $550 million annual interest payment is our third
largest expenditure after health and education. Each year that we
incur a deficit we add to our interest and reduce the money
available for public services.
Mr. Speaker, the reality is that we are now
spending more to service the debt than to provide assistance to
the more than 70,000 clients of social services. This money does
not reduce the debt. It merely pays the interest on our
collective credit card.
The time has come to take a new direction. A direction that is
sustainable and responsible.
Click here for Chart - Total Provincial
Direct Debt
Another major issue is the unfunded liabilities of our pension
plans, which add a further $2.5 billion to our debt. The
teacher's pension plan will run out of money nine years from now
in the year 2005. Government and its employees must work toward a
solution. We are resolved to do so with the NLTA this year.
The Challenge for 1996
Mr. Speaker, if we had not made the choices in this
Budget, the deficit for 1996-97 would have been unacceptable.
When the pre-Budget consultation document was prepared in early
March, a deficit of $230 million was forecast. Revised economic
projections based on lower employment numbers indicated a greater
decline in 1996 GDP. These factors pushed up our deficit
projection by $30 million.
Midyear budget corrections in recent years have created
uncertainty in both the public and private sectors and diverted
efforts from the real job of planning and providing services.
To help address this problem, the Budget contains a contingency
reserve of $30 million. These funds will be borrowed only in the
event of an unforeseen decline in revenues or unforeseen
emergency spending requirements.
The prudent choice of budgeting for this contingency brought our
total projected deficit for 1996-97 to $290 million.
OUR RESPONSE
A Planned Approach
Mr. Speaker, in our pre-Budget consultations we
indicated that incurring a large deficit was not a choice. The
people agreed. The projected deficit has to be reduced.
Our budgetary problem, however, did not begin this year. Our debt
has accumulated over many years. It will be several years before
we return to our previous levels of employment and income.
We have taken steps toward a lasting solution. The efficiencies
achieved last fall have reduced the size of the deficit problem
for 1996-97. Educational reform is underway. The health care
system is being restructured. We have taken initiatives to lower
future spending.
Strengthening Our Revenue Base
Mr. Speaker, while revenues are needed to pay for
programs and services, taxes influence people's spending patterns
and business investment decisions. Government's revenue needs
must be balanced against ability to pay and the effect of
taxation upon the competitiveness of our business sector.
Achieving the right balance at a time when we are faced with a
structural deficit, limited borrowing capacity and the need for
economic stimulation is a delicate task.
The people of the Province told us during the consultations that
the average family already shoulders a heavy tax burden, and that
Government must maintain a business environment which attracts
new investment and jobs. We are acting upon this advice.
We will not increase retail sales tax, we will not increase the
gasoline tax, nor will we increase any other consumption taxes.
There will be no increase in corporate income tax and no general
increase in personal income tax.
There are only two new tax measures that will raise additional
revenue from those with the greatest ability to pay.
Commencing with the 1996 tax year, to bring Newfoundland and
Labrador in line with every other province, we will levy a high
income surtax on individuals with taxable incomes in excess of
$60,000. This surtax applies to approximately 8,000 people, the
top five percent of taxpayers in the Province.
Secondly, effective June 1, 1996, the rate of the financial
corporations capital tax which applies to banks and trust
companies will be increased from 3 percent to 4 percent.
Mr. Speaker, beyond these measures applied to banks
and high income earners, no other tax measures are implemented in
this Budget.
Revenues from Newfoundland and Labrador Hydro will increase by
$19 million to $53.4 million. Hydro will not be seeking a rate
increase as a result of this additional payment.
Under the Terms of Union, the Federal Government is committed to
an $8 million annual payment to the Province in perpetuity. In
light of our unique economic and financial circumstances, the
federal government will advance amounts payable under Term 29
over the next three years, when the funds are needed most. The
regular annual payments of $8 million will resume in 20 years.
We will receive $50 million of the advance this year. The federal
government has agreed to provide us with another $80 million over
the three year period.
The provision of these funds has allowed us to avoid cuts in the
health care sector and the layoff of an additional 500 or more
front-line workers. As a result of this advance payment, the
health care budget will not be reduced this year.
Mr. Speaker, even after these adjustments, this
year our revenues will decline by $104 million from the 1995-96
revised estimate. This is a reduction of 3.1 percent.
Click here for Chart - Change in
Total Current Revenues
Spending Smarter
Mr. Speaker, if we did not reduce costs now, our
deficit and debt would become unmanageable. We must have the
opportunity to restructure Government in a planned and measured
way that protects priorities.
This year we will spend $3,408 million, $81 million less than
last year. That is a reduction of 2.3 percent.
We have achieved greater operational efficiencies and ensured
that front-line spending on social and economic priorities is
protected.
Groups We Fund
Many public sector organizations rely on grants from Government
to fund their operations. This sector must share our restraint.
Others will be substantially reduced. Government will eliminate
more than 20 agencies, boards and commissions to streamline
operations and reduce costs. Several will be consolidated into
one. There are close to 300 such agencies, all of which will be
reviewed and made to justify their productive roles in the months
ahead.
Government provides considerable financial support and assistance
to municipalities. Effective January 1, 1997, municipal operating
grants will be reduced 10 percent. Fire protection grants to St.
John's and Corner Brook will be reduced 20 percent. The charge
for municipal property assessment services provided by the
Province will increase.
Government provides a significant operating subsidy to the
Newfoundland Farm Products Corporation. A new board of directors
will be appointed to commercialize the corporation, and pursue
privatization.
Government will also continue to pursue privatization of the
Marystown Shipyard. The board of directors is currently
finalizing a plan for consideration by Cabinet which will see
major restructuring of the operations to create efficiencies
which will lead to a break-even operation.
Government will continue to identify those functions which can
better be performed by or in partnership with the private sector.
Government Operations
Mr. Speaker, departmental spending this year will
be reduced significantly from last year:
The reduction in the number of Members of the House of Assembly
will reduce the cost of operating the legislature by about $400
thousand this year. As well, Members' allowances and benefits
have been reduced by 11 percent.
There will be no more vehicles dedicated for the use of the
Premier, other politicians, Government executives, or visiting
dignitaries. Cars currently used for this purpose will be sold.
All those travelling at public expense, including the Premier,
Cabinet Ministers, Leader of the Opposition, Members of the House
of Assembly and executive will travel in economy class. There
will be no more business class travel.
Public Sector Salaries
Our public service workers make a valuable contribution to our
Province through their efforts in providing needed services.
Their wages and benefits comprise two-thirds of the cost of
Government.
All governments in Canada have found it necessary to reduce their
wage bills in recent years. Most have frozen wages. Several have
cut salaries by up to 7.5 percent. Others have required employees
to take unpaid leave. However, temporarily reducing salaries and
benefits does not achieve a lasting reduction in the cost of
Government. If the deficit is to be reduced we must have a
smaller public service.
Accordingly, there will be no public service wage or benefit
rollbacks in this Budget. However, we will reduce the size of the
public service. Wherever possible, we have reduced administration
rather than front-line service.
Restructuring in the health and education sectors will assist in
decreasing the size of the public service. The Economic Recovery
Commission has been dismantled. Enterprise Newfoundland and
Labrador is being integrated into Government and its lending role
reduced and reviewed.
Mr. Speaker, we are resolved to assist our
employees affected by these decisions. A program has been put in
place to help individuals who will be losing jobs, including
counselling services, and first right of recall for job openings.
Approximately 500 people are directly affected by the measures in
the Budget. Another 500 are affected by restructuring initiatives
already underway.
Program Review
Mr. Speaker, the measures I am announcing today
will deal with revenue declines in the fiscal year 1996-97. The
fact is, our revenues will decline again in 1997-98, which will
require further adjustments to our spending. To achieve maximum
benefits from our limited dollars, I am announcing today the
establishment of a process to examine all expenditures and
programs of the Government of Newfoundland and Labrador. This
program review will be carried out by a select committee of
Cabinet to which all Ministers, their departments, commissions
and agencies will report.
Our programs and services will be tested against these criteria:
Mr. Speaker, this program review will help us
further rationalize our spending, and ensure a sound basis for
making the right choices in the further restructuring of
Government. At the end of this process, I will report the results
of the program review as part of next year's pre-Budget
consultations. We will again seek public input before
implementing the changes suggested.
Capital Spending
Government will provide over $165 million this year for capital
projects, through a number of provincial and federal-provincial
programs:
Protecting Our Social Programs
Our major social programs, health care, education and social
services, account for about sixty percent of our current
spending.
Health Care:
During the pre-Budget consultations, the people of the Province
clearly indicated that health services were their first priority.
They are also the most costly.
During recent years, Government has undertaken major reforms of
our health care system to provide community-based services and
cost-efficient management.
In meeting our fiscal challenges this year, we have reduced
spending on most Government services. Health care has not been
reduced. In fact, Government will increase health expenditures
and will provide additional funding for cardiac care and
community health services.
The health sector has sought a multi-year funding commitment to
better plan changes and improvements to our health system. We are
guaranteeing the 1996-97 level of operating funding for this
year, next year, and the year after. This commitment to health
care for the people of this Province, is close to $3 billion over
this three-year period. We are empowering our health care
managers to deliver services in the most cost efficient manner.
Education:
A quality education system that leads to a well trained and a
competitive workforce is essential to our economic well-being.
Our ability to meet our educational needs is challenged by lower
federal support and declining enrollments. Educational reform
must and will proceed.
We have chosen to rationalize educational facilities to ensure
that adequate funding is provided for students rather than
administration. We understand and sympathize with the concerns
that have been expressed about the closures of some programs and
institutions. However, in order to continue to offer viable
programs, the structure of post-secondary education must be
rationalized.
The grant this year to Memorial University will be reduced $8
million to $107.5 million. Next year the grant will be reduced to
$104.5 million, and to $101.5 million in the year following.
Social Services:
Government has a responsibility to protect basic social services.
The partnership with the federal government in meeting this
responsibility is dissolving. Social assistance caseloads in the
Province will continue to rise during 1996 because of lower
employment, the expiration of TAGS benefits for many individuals,
and reforms to unemployment insurance. This will increase our
assistance costs by about $6 million.
The Department of Social Services is taking initiatives to
streamline operations and improve client service, including
delegating increased decision making authority to front-line
workers. In recognition of the fact that those who have the least
amongst us cannot contribute more to the cost of deficit
reduction, the budget of the Department of Social Services will
not be decreased, and will, similar to the Department of Health,
receive a modest increase this year.
Building a Stronger Economy
Mr. Speaker, although we must reduce spending,
Government will continue to pursue policies that promote economic
opportunity. All of us, whether in the public or private sector,
must commit to and promote economic success.
Government has taken initiatives to substantially improve the
business climate in the Province. We have reduced regulations.
The Province now has one of the most competitive corporate tax
systems in the country. Sales tax harmonization and EDGE
incentives will create new business ventures and employment.
Together we can build a vibrant economy through resource
development, tourism and technology, manufacturing and services.
The Canada-Newfoundland Agreement on Economic Renewal will
provide almost $23 million this year to encourage growth in key
sectors of the economy. Funding is provided for aquaculture
projects, advanced technology and tourism initiatives.
The Province in partnership with the federal government, the
banks and the other Atlantic provinces will fund on a matching
basis a $30 million Atlantic Investment Fund which will make
investments in businesses located in Atlantic Canada. Our
contribution in this fiscal year will be approximately $1
million.
Tourism:
The 1997 celebration of John Cabot's voyage provides a tourism
investment opportunity of international significance. The 500th
anniversary events surrounding this celebration will showcase our
exceptional culture and artistic talent. Government's support and
the effort of countless volunteers will make this celebration a
success for not only the people of this Province, but also those
in Western Europe and North America who share our heritage.
In fact, next week a delegation including 21 businesses from this
province will go to Bristol to participate in the International
Festival of the Sea. A total of 6 countries will be
participating. We must take advantage of opportunities such as
this to enhance our tourism industry. These celebrations will
bring millions of new tourism dollars to this Province.
Labrador:
The people and the vast resources of Labrador make a significant
contribution to this Province and to the country. This Government
believes that it is time to increase our investment in Labrador.
Improving the Trans-Labrador Highway is one of the great capital
needs in this Province. During 1996-97, despite our financial
constraints, Government is committing $8 million for improvements
to the Trans-Labrador Highway. We are inviting the Government of
Canada to assist in further improvements.
Mr. Speaker, the $8 million this year is a doubling
of any previous annual commitment to the highway.
We have preserved to the greatest possible extent those programs
that provide special consideration for those who live in
Labrador.
Budgetary Outlook 1996-97
Mr. Speaker, the choices we have made have reduced
our projected budgetary deficit from $290 million to $44.8
million.
Table 3
ESTIMATED BUDGETARY POSITION
($ millions)
Estimates Revised
1996-97 1995-96
Current Account
Gross Expenditure 3,207.4 3,214.9
Related Revenue 208.3 256.5
Net Expenditure 2,999.1 2,958.4
Provincial and Federal Revenues 3,060.5 3,115.9
Current Account Surplus 61.4 157.5
Capital Account
Gross Expenditure 200.5 273.9
Related Revenue 124.3 120.2
Net Expenditure 76.2 153.7
Contingency Reserve 30.0 -
Total Budgetary (Deficit)/Surplus (44.8) 3.8
APPENDIX I
On March 1, 1996, the Government of Newfoundland and Labrador
released the pre-Budget document "Making Choices for a
Better Tomorrow". This document outlined our sources of
revenues, the programs and services we currently provide, our
public sector debt and deficits, our current economic challenges
and our future economic prospects. It also raised important
issues and questions for the Province's first pre-Budget
consultation process. The Government of Newfoundland and Labrador
committed to this process because we believe that the people of
our Province should have more opportunities to participate in
making the choices that lead to provincial Budgets.
Public participation in the consultation process was possible
through several means. A series of public meetings was chaired by
the Minister of Finance with a small committee that included
local MHAs. These meetings were conducted throughout March, in
the following communities: Labrador City-Wabush, Happy
Valley-Goose Bay, Corner Brook, Grand Falls-Windsor, Gander,
Marystown, Clarenville and St. John's. At each forum the Minister
gave a brief overview of the Province's fiscal position, which
was followed by presentations from interested groups and
individuals. A total of 130 presentations were made during the
Province-wide consultations.
A toll-free 1-800 number was set up for individuals to obtain the
consultation document, request information, or leave comments and
suggestions. An Internet site, E-mail address, and dedicated fax
line were established. Responses also could be made by way of a
postage paid comment card or by writing the Minister. To
facilitate the involvement of individuals with disabilities, the
consultation document was available in alternate formats
including audio cassette and computer file versions.
Approximately 1,400 groups and individuals participated in the
consultation process. The number and diversity of the responses
indicate that the people of this Province have a genuine concern
for their programs and services, and the Government's finances.
Submissions were received from people representing a broad
spectrum of our society, ranging from individuals to national
business associations, labour unions to small business owners,
and community-based non-profit organizations. The number of
people who demonstrated an interest and took the time to
participate is very encouraging. The submissions were of great
value to Government in making the choices leading to the 1996
Budget.
Click here for Chart - PARTICIPATION
Click here for Chart - WHO RESPONDED
Click here for Chart - RESPONSES BY REGION
NF MAP
Several common themes were evident from the presentations and
submissions. A majority of participants felt that social programs
must be Government's chief concern. Most respondents acknowledged
the limitations of the current fiscal situation, with many
indicating that savings could be achieved by Government through
more efficient management and choice of services. Many responses
further noted that the quality of essential front-line services
must be maintained or enhanced, particularly in health. Many
participants also recognized that there are limited options for
raising additional revenues, and that borrowing is only a
short-term solution.
Taxation and Fees
People feel that the overall tax burden in Newfoundland and
Labrador is high. The personal tax burden was considered very
heavy, particularly on lower and middle income families with many
respondents pointing to the 12 percent RST rate. Many respondents
believed that persons with high incomes could be taxed further.
Some people felt that business was not paying its fair share
while others felt that businesses should be encouraged to grow
with lower levels of taxation. Others suggested that some new
form of taxation be levied on companies with large profits,
particularly financial institutions. Finally with respect to
taxation, many indicated that there could be some room to raise
additional revenues by increasing taxes on luxury items, and
likewise, the idea of imposing new fees on specific services or
increasing existing fees was proposed as an alternative to
increasing direct taxation.
Click here for Chart - OPINIONS ON REVENUE
CHOICES
"User fees should be extended for Government services . .
. " (Nelson Bennett, Pasadena)
Borrowing
Participants who discussed borrowing took a cautious approach.
Most recognized that any borrowing was only a short-term solution
to our financial situation. Some felt that the Province should
borrow limited funds based on the potential of the Province's
resource developments, while others strongly urged that our
programs must be protected at all cost even if borrowing was the
only option. At the other extreme, a number of submissions
indicated that any borrowing is unacceptable. In general a
moderate view prevailed with the consensus emerging that a
minimum level of borrowing would be acceptable.
"As a last resort, I would support moderate borrowing
but only to the limit that does not affect our interest
rates." (Catherine Donovan, Holyrood)
There were a number of specific recommendations related to
borrowing, including that our debt be restructured in light of
current interest rates. The implementation of tax credits for
personal investments and the possibility of issuing Newfoundland
savings bonds also were mentioned as instruments that would allow
individuals to invest in the Province.
Health Care
People felt strongly about our health care system, and that the
provision of adequate health care should be Government's highest
priority. Many felt that the health care system has undergone
large cuts in the recent past, and any further reductions would
threaten the quality of services. However, it is realized that
given the sheer size of the health care system, some expenditure
reductions may be unavoidable.
"For the past few years I have seen our health care
erode and doctors leave the province. I don't think our health
care should be cut any more." (E-Mail Message)
Much of the discussion concerning the health sector centred
around the provision of services at the community level. The need
for an improved system which stresses a preventative approach
over institutional care was a common theme. Likewise, increased
coordination amongst the providers of social programs and
services was seen as a means of distributing our resources
further. Many people expressed a desire for more nurses, nursing
assistants, technicians and other front-line workers at the
community level.
"We feel there would be a better return on health care
investment if institutional services are permitted to refine and
hone their speciality skills while community health organizations
emphasize people's general good health in their
communities." (Neil Ludlow, Central Regional Community
Health Board)
Education
As with health care, education was also seen as a high priority
for Government. However, the education system was considered to
have more room for expenditure reductions and changes to
programs. Many respondents strongly indicated that education
reform must proceed to make the system more efficient and
responsive. Our education system is important for future economic
growth and must continue to provide our young people with skills
that will enable them to compete in the work place of the
twenty-first century.
"Education reform should be done as soon as possible for
budgetary savings." (Presentation by College Students, Grand
Falls-Windsor)
Social Services
Social services and related programs were viewed by many
respondents as another priority area for Government. In difficult
economic times an effective support system must be in place to
help people in need. Some respondents recognized the need for
effective social assistance programs while indicating that such
services were often abused. As with health, it was suggested that
programs assisting people in need emphasize a community-based
approach. People demonstrating need should be given the means and
encouragement to help themselves and their communities.
"Social services must go beyond the provision of basic
income support." (Community Services Council of Newfoundland
and Labrador)
Click here for Chart - OPINIONS ON
SPENDING CHOICES
Efficient Government
Many respondents made reference to reducing the overall level of
expenditures, while others indicated that the Government should
closely examine general operations and reduce lower priority
services and expenditures. Management and administration were
often seen as a significant source of potential savings.
"The number of senior bureaucrats should be examined in
relation to the number of front line workers." (Letter, Town
of Lewisporte)
Many responses made reference to aspects of privatizing
Government services or pursuing improved cooperation with the
private sector. A number of participants felt that the private
sector could provide certain services more efficiently than
Government. Others felt that Government should work with business
to increase employment opportunities in the Province. A general
view prevailed that Government must better define its role and
concentrate on doing these activities well.
"If total privatization is not practical, then perhaps a
private-public partnering program can be put in place where
Government's job of regulating will be maintained while private
corporations provide the service." (John O'Ragan,
Newfoundland and Labrador Chamber of Commerce)
It is evident that much effort and thought were put into the presentations and submissions for the Budget consultation process. As expected, the responses were varied and covered a broad spectrum of topics related to Government services and finances. Many participants made recommendations in response to questions posed in the consultation document. In many instances, briefs focused on the importance of present expenditures. In other cases, improvements and efficiencies were identified which would enable Government to save money while maintaining key services for the people of Newfoundland and Labrador. Overall, the process resulted in many valuable suggestions and recommendations for Government to consider in developing its 1996 Budget. In summary, the people of the Province have told Government that:
APPENDIX II
CONSOLIDATED FUND SERVICES/FINANCE
EXECUTIVE COUNCIL
GOVERNMENT SERVICES AND LANDS
LEGISLATURE
PUBLIC SERVICE COMMISSION
WORKS, SERVICES AND TRANSPORTATION
DEVELOPMENT AND RURAL RENEWAL
ENVIRONMENT AND LABOUR
FISHERIES AND AQUACULTURE
FOREST RESOURCES AND AGRIFOODS
INDUSTRY, TRADE AND TECHNOLOGY
MINES AND ENERGY
TOURISM, CULTURE AND RECREATION
EDUCATION
HEALTH
JUSTICE
MUNICIPAL AND PROVINCIAL AFFAIRS
SOCIAL SERVICES
APPENDIX III
TAX MEASURES
High Income Surtax
Financial Corporations Capital Tax
FEES AND LICENCES
Government Services & Lands
Forest Resources and Agrifoods
Mines and Energy
Environment and Labour
Fisheries and Aquaculture
Health
STATEMENT I
NEWFOUNDLAND AND LABRADOR
SUMMARY OF BORROWING REQUIREMENTS
1996-97 and 1995-96 (Revised)
1996-97 Estimates 1995-96 Revised
($000) ($000) ($000) ($000)
BUDGETARY REQUIREMENTS
Current Account:
Gross Expenditure 3,207,352 3,214,914
Related Revenues 208,247 256,500
Net Expenditure 2,999,105 2,958,414
Provincial and Federal Revenues 3,060,455 3,115,894
Financial Contribution (61,350) (157,480)
Capital Account:
Gross Expenditure 200,453 273,855
Related Revenues 124,331 120,185
Net Expenditure 76,122 153,670
Other:
Contingency Reserve (Note 1) 30,000 -
TOTAL BUDGETARY REQUIREMENTS (CONTRIBUTION) 44,772 (3,810)
NON-BUDGETARY TRANSACTIONS
DEBT RETIREMENT
Redemptions (See Appendix II) 311,519 53,482
Sinking Funds (See Appendix II) 44,873 47,605
356,392 101,087
TOTAL BORROWING REQUIREMENTS 401,164 97,277
Note 1: Appropriations provide for a contingency for unforeseen expenditures which may arise
during the year or to guard against potential negative revenue variances. Expenditure of
these funds will require Cabinet approval. If and when such approval is provided, the
expenditures will be transferred to the appropriate Government Department or Agency.
STATEMENT II COMPARATIVE SUMMARY OF CURRENT AND RELATED REVENUES 1996-97 and 1995-96 Revised 1996-97 1995-96 Estimates Revised ($000) ($000)PROVINCIAL: Taxation: Retail Sales Tax 541,000 565,424 Personal Income Tax 583,000 553,632 Gasoline Tax 120,600 121,947 Corporate Income Tax 50,500 62,794 Tobacco Tax 64,000 65,575 Mining Tax and Royalties 22,000 19,121 Payroll Tax 71,600 77,312 Other 26,800 25,895 1,479,500 1,491,700 General Revenues: Newfoundland Liquor Corporation 75,000 81,450 Vehicle and Drivers Licences 45,240 44,897 Lottery Revenues 79,000 73,461 Registry of Deeds 10,100 10,018 Fines and Forfeitures 8,875 8,174 Other 30,986 43,782 249,201 261,782 Expenditure Programs - Related Revenues: Recoveries - Sinking Fund Surpluses 13,177 70,413 Interest Income 20,578 10,624 Other 100,777 87,057 134,532 168,094 TOTAL: PROVINCIAL REVENUES 1,863,233 1,921,576 GOVERNMENT OF CANADA: Fiscal Transfer Payments: Equalization Payments 938,500 911,598 Canada Health and Social Transfer (CHST) 340,700 - Established Programs Financing Grant (EPF) - 221,817 Canada Assistance Plan (CAP) - 205,459 Provincial Share of Utility Companies Tax 800 13,784 Term 29 Award 50,000 8,000 Statutory Subsidies 1,754 1,754 1,331,754 1,362,412 Cost Shared Programs: Resource 23,323 10,006 offshore Fund 4,093 3,069 Human Resources Development 13,920 18,396 Native Peoples 9,023 8,628 Other 23,356 48,307 73,715 88,406 TOTAL: GOVERNMENT OF CANADA REVENUES 1,405,469 1,450,818 TOTAL: CURRENT AND RELATED REVENUES 3,268,702 3,372,394 Note: Beginning in the 1996-97 fiscal year, the CHST replaces EPF and CAP transfers. CAP transfers were previously included as Federal related revenues.
STATEMENT III SUMMARY OF CURRENT AND CAPITAL ACCOUNT EXPENDITURES 1996-97 and 1995-96 Revised 1996-97 1995-96 ------------------------------------------- ------- Gross Related Net Revised Expenditure Revenue Expenditure (Net)General Government Sector Consolidated Fund Services 616,303,600 55,617,000 560,686,600 508,353,200 Executive Council 21,291,900 1,334,400 19,957,500 19,487,200 Finance 41,603,300 44,371,100 (2,767,800) 4,956,900 Government Services & Lands 23,273,000 3,237,000 20,036,000 18,715,400 Legislature 10,852,600 185,900 10,666,700 14,115,700 Public Service Commission 1,887,100 62,300 1,824,800 2,676,400 Works, Services and Transportation 218,268,000 84,110,700 134,157,300 153,899,300 Resource Sector Development & Rural Renewal 61,900,000 37,682,200 24,217,800 30,829,400 Environment and Labour 12,095,800 5,155,200 6,940,600 9,269,500 Fisheries and Aquaculture 12,905,400 2,443,800 10,461,600 11,518,300 Forest Resources & Agrifoods 52,693,000 8,572,800 44,120,200 45,046,700 Industry, Trade & Technology 28,888,600 8,381,200 20,507,400 19,226,600 Mines and Energy 10,167,400 1,056,800 9,110,600 9,918,700 Tourism, Culture & Recreation 34,818,300 8,051,000 26,767,300 32,974,300 Social Sector Education 714,993,500 22,286,000 692,707,500 716,776,600 Health 915,108,300 10,873,900 904,234,400 912,883,400 Justice 108,628,800 7,025,600 101,603,200 107,621,000 Municipal and Provincial Affairs 145,184,200 22,292,400 122,891,800 127,902,000 Newfoundland and Labrador Housing Corporation 8,200,000 - 8,200,000 13,565,000 Social Services 368,741,800 9,838,900 358,902,900 352,348,400 TOTAL 3,407,804,600 332,578,200 3,075,226,400 3,112,084,000 AMOUNT TO BE VOTED 1996-97 Gross Current and Capital Expenditure 3,407,804,600 Contingency Reserve 30,000,000 Less: Expenditures Approved by Statute: Interest 538,063,700 Pensions and Gratuities 53,422,300 Debt Management Expenses 2,727,000 Issues under Guarantee 1,000,000 Salaries (Auditor General) 93,800 595,306,800 Amount to be Voted by Supply Bill 2,842,497,800
STATEMENT IV SUMMARY OF CURRENT ACCOUNT EXPENDITURES 1996-97 and 1995-96 Revised 1996-97 1995-96 -------------------------------- ------- Gross Related Net Revised Expenditure Revenue Expenditure (Net) ($000) ($000) ($000) ($000)General Government Sector Consolidated Fund Services 615,226 55,616 559,610 501,046 Executive Council 21,292 1,334 19,958 19,487 Finance 41,603 33,544 8,059 14,564 Government Services and Lands 23,033 2,997 20,036 18,680 Legislature 10,853 186 10,667 14,116 Public Service Commission 1,887 62 1,825 2,677 Works, Services and Transportation 133,120 17,421 115,699 95,057 Resource Sector Development and Rural Renewal 52,350 19,167 33,183 31,394 Environment and Labour 12,096 5,155 6,941 9,270 Fisheries and Aquaculture 11,537 2,044 9,493 10,438 Forest Resources and Agrifoods 47,593 6,173 41,420 41,947 Industry, Trade and Technology 27,933 8,381 19,552 17,916 Mines and Energy 9,167 307 8,860 9,919 Tourism, Culture and Recreation 28,033 4,258 23,775 27,764 Social Sector Education 701,698 20,798 680,900 695,947 Health 903,300 10,224 893,076 889,419 Justice 108,629 7,026 101,603 107,621 Municipal and Provincial Affairs 81,060 3,715 77,345 85,239 Newfoundland and Labrador Housing Corporation 8,200 - 8,200 13,565 Social Services 368,742 9,839 358,903 352,348 TOTAL 3,207,352 208,247 2,999,105 2,958,414
STATEMENT V SUMMARY OF CAPITAL ACCOUNT EXPENDITURES 1996-97 and 1995-96 Revised 1996-97 1995-96 -------------------------------- ------- Gross Related Net Revised Expenditure Revenue Expenditure (Net) ($000) ($000) ($000) ($000)General Goverment Sector Consolidated Fund Services 1,077 1 1,076 7,307 Finance - 10,827 (10,827) (9,607) Government Services and Lands 240 240 - 35 Works, Services and Transportation 85,148 66,690 18,458 58,842 Resource Sector Development and Rural Renewal 9,550 18,515 (8,965) (565) Fisheries and Aquaculture 1,368 400 968 1,080 Forest Resources and Agrifoods 5,100 2,400 2,700 3,100 Industry, Trade and Technology 956 - 956 1,311 Mines and Energy 1,000 750 250 - Tourism, Culture and Recreation 6,786 3,793 2,993 5,211 Social Sector Education 13,296 1,488 11,808 20,829 Health 11,808 650 11,158 23,464 Municipal and Provincial Affairs 64,124 18,577 45,547 42,663 TOTAL 200,453 124,331 76,122 153,670 Note: For details refer to Appendix III.
STATEMENT VI SUMMARY OF RELATED REVENUES AND EXPENDITURES BY MAIN OBJECT AND SECTOR 1996-97 and 1995-96 Revised General Government Resource Social % of Total Sector Sector Sector Total 1996/97 1995/96 1996/97 1996/97 1996/97 1996/97 Total Revised ($000) ($000) ($000) ($000) % ($000)Current: Salaries 103,820 61,197 106,521 271,538 8.5 291,795 Employee Benefits 104,753 751 1,219 106,723 3.3 93,334 Transportation and Communications 9,359 13,251 9,876 32,486 1.0 33,755 Supplies 31,225 6,216 10,228 47,669 1.5 48,050 Professional Services 4,496 4,440 42,320 51,256 1.6 54,926 Purchased Services 34,086 28,961 18,365 81,412 2.5 68,478 Property, Furnishings and Equipment 382 830 614 1,826 0.1 3,395 Allowances and Assistance 4,831 193 389,135 394,159 12.3 384,175 Grants and Subsidies 6,816 69,646 1,581,089 1,657,551 51.7 1,672,445 Debt Expenses 539,169 - 4,692 543,861 16.9 545,424 Information Technology 8,077 3,224 7,570 18,871 0.6 19,137 Gross Current Expenditure 847,014 188,709 2,171,629 3,207,352 100.0 3,214,914 Federal Revenue Sources (6,294) (33,463) (33,958) (73,715) 35.4 (88,406) Provincial Revenue Sources (104,866) (12,022) (17,644) (134,532) 64.6 (168,094) Total Current Related Revenues (111,160) (45,485) (51,602) (208,247) 100.0 (256,500) Net Current Expenditure 735,854 143,224 2,120,027 2,999,105 2,958,414 Capital: Salaries 6,540 80 207 6,827 3.4 6,970 Employee Benefits - - 1 1 0.0 - Transportation and Communications 845 5 62 912 0.4 1,213 Supplies 1,407 5 7 1,419 0.7 1,123 Professional Services 980 875 445 2,300 1.1 4,621 Purchased Services 68,653 10,410 5,058 84,121 42.0 114,216 Property, Furnishings and Equipment 9,630 816 9,950 20,396 10.2 28,059 Loans, Advances and Investments 1,000 8,730 200 9,930 5.0 24,373 Grants and Subsidies 300 3,839 66,377 70,516 35.2 89,392 Debt Expenses 745 - 3,286 4,031 2.0 3,847 Information Technology - - - - 0.0 41 Expenditure by Sector Before Recharges 90,100 24,760 85,593 200,453 100.0 273,855 Voted in Other Departments and Divisions 5,862 - 3,635 9,497 22,977 Recharged to Other Departments and Divisions (9,497) - - (9,497) (22,977) Gross Capital Expenditure 86,465 24,760 89,228 200,453 273,855 Federal Revenue Sources (63,090) (8,358) (19,895) (91,343) 73.5 (89,903) Provincial Revenue Sources (14,668) (17,500) (820) (32,988) 26.5 (30,282) Total Capital Related Revenues (77,758) (25,858) (20,715) (124,331) 100.0 (120,185) Net Capital Expenditure 8,707 (1,098) 68,513 76,122 153,670 Total Net Expenditure 744,561 142,126 2,188,540 3,075,227 3,112,084
EXHIBIT I
SELECTED ECONOMIC STATISTICS
1992 to 1995
% % %
1995 Change 1994 Change 1993 Change 1992
Population as of July 1 (000's) 575.4 -1.0 581.2 -0.5 584.2 0.1 583.4
Gross Domestic Product at Market Prices ($ Millions) 10,333 6.2 9,729 3.7 9,378 2.1 9,182
Total Personal Income ($ Millions) 10,301 1.3 10,166 0.9 10,072 1.3 9,947
Per Capita Personal Income ($) 17,896 2.3 17,491 1.5 17,241 1.1 17,050
Labour Force, Annual. Average (000's) 241 -1.2 244 1.1 242 -0.5 243
Employment, Annual Average (000's) 197 1.4 195 0.7 193 -0.4 194
Unemployment Rate, Annual Average (%) 18.3 -10.3 20.4 1.5 20.1 -0.5 20.2
Wages and Salaries ($ Millions) 4,796 1.7 4,715 3.1 4,572 1.2 4,519
Consumer Price Index, (1986=100) 127.5 1.4 125.7 1.3 124.1 1.6 122.1
Total Volume of Fish Landings (000's of
Metric Tonnes) 136 -0.8 137 -43.6 243 -13.6 281
Total Value of Fish Landings ($ Millions) 330 52.7 216 11.2 194 1.3 192
Pulpwood Production (000's Cubic Meters) 2,074 5.4 1,967 4.7 1,879 12.1 1,676
Newsprint Shipments (Thousand Tonnes) 733 -0.4 737 4.7 704 5.6 667
Iron Ore Shipments (Millions of Metric Tonnes) 21.8 7.4 20.3 11.5 18.2 2.8 17.7
Gross Value of Manufacturing Shipments ($ Millions) 1,485 8.6 1,368 3.4 1,323 3.4 1,280
Private and Public Capital Investment ($ Millions) 3,012 3.6 2,906 17.0 2,485 19.4 2,080
Dwelling Starts (Number) 1,712 -23.7 2,243 -6.7 2,405 5.9 2,271
Retail Trade ($ Millions) 3,459 1.5 3,409 2.4 3,328 -0.9 3,359
New Motor Vehicle Sales (Number) 17,112 -15.4 20,225 3.5 19,544 0.7 19,410
Note: Some data are preliminary.
Some percent changes are based on unrounded data.
Source: Statistics Canada; Economics and Statistics Section, Department cif Finance
EXHIBIT II
ESTIMATED PROVINCIAL AND FEDERAL REVENUES
1996-97 and 1995-96 Revised
1996-97 1995-96
Estimates Revised
($000) ($000)
PROVINCIAL TAX SOURCES:
Retail Sales Tax 541,000 565,424
Personal Income Tax 583,000 553,632
Gasoline Tax 120,600 121,947
Corporate Income Tax 50,500 62,794
Tobacco Tax 64,000 65,575
Mining Tax and Royalties 22,000 19,121
Payroll Tax 71,600 77,312
Insurance Companies Tax 18,500 19,077
Corporate Capital Tax 6,700 5,132
Forest Management Tax 1,600 1,686
TOTAL: Provincial Tax Sources 1,479,500 1,491,700
OTHER PROVINCIAL SOURCES:
Newfoundland Liquor Corporation 75,000 81,450
Vehicle and Driver Licences 45,240 44,897
Lottery Revenues 79,000 73,461
Registry of Deeds 10,100 10,018
Fines and Forfeitures 8,875 8,174
Inland Fish and Game Licences 3,400 2,847
Registry of Bills and Sales 1,940 1,793
Mining Permits and Fees 5,000 1,920
Crown Lands 8,820 2,227
Forestry Royalties and Fees 1,430 1,518
Offshore Revenue Fund - 23,953
Water Power Rentals 3,800 3,765
Other 6,596 5,759
TOTAL: Other Provincial Sources 249,201 261,782
TOTAL: PROVINCIAL SOURCES 1,728,701 1,753,482
GOVERNMENT OF CANADA:
Equalization 938,500 911,598
Canada Health and Social Transfer (CHST) 340,700 -
Established Programs Financing (EPF) - 221,817
Canada Assistance Plan (CAP) - 205,459
PUITTA 800 13,784
Term 29 Award 50,000 8,000
Statutory Subsidies 1,754 1,754
TOTAL: GOVERNMENT OF CANADA 1,331,754 1,362,412
TOTAL: PROVINCIAL AND FEDERAL REVENUES 3,060,455 3,115,894
Note: Beginning in the 1996-97 fiscal year, the CHST replaces EPF and CAP transfers. CAP transfers
were previously included as Federal related revenues.
EXHIBIT III
CURRENT AND CAPITAL REVENUES
PROVINCIAL AND FEDERAL SOURCES
1992-93 to 1996-97
1996-97 1995-96 1994-95 1993-94 1992-93
Estimates Revised Audited Audited Audited
($000) % ($000) % ($000) % ($000) % ($000) %
Current Revenues:
Provincial Sources 1,863,233 57.0 1,921,576 57.0 1,729,180 53.2 1,679,884 54.7 1,677,117 55.1
Federal Sources 1,405,469 43.0 1,450,818 43.0 1,523,486 46.8 1,391,642 45.3 1,367,284 44.9
Total: Current Revenues 3,268,702 100.0 3,372,394 100.0 3,252,666 100.0 3,071,526 100.0 3,044,401 100.0
Capital Revenues:
Provincial Sources 32,988 26.5 30,282 25.2 21,470 15.9 16,300 18.8 16,249 10.9
Federal Sources 91,343 73.5 89,903 74.8 113,641 84.1 70,620 81.2 132,966 89.1
Total: Capital Revenues 124,331 100.0 120,185 100.0 135,111 100.0 86,920 100.0 149,215 100.0
Current and Capital Revenues:
Provincial Sources 1,896,221 55.9 1,951,858 55.9 1,750,650 51.7 1,696,184 53,7 1,693,366 53.0
Federal Sources 1,496,812 44.1 1,540,721 44.1 1,637,127 48.3 1,462,262 46.3 1,500,250 47.0
Total: Current and Capital Revenues 3,393,033 100.0 3,492,579 100.0 3,387,777 100.0 3,158,446 100.0 3,193,616 100.0
EXHIBIT IV
EXPENDITURE SUMMARY
1996-97 Estimated
Total Current Capital
Head Gross Net Gross Net Gross Net
($000) ($000) ($000) ($000) ($000) ($000)
Consolidated Fund Services 616,303 560,686 615,226 559,610 1,077 1,076
Executive Council 21,292 19,958 21,292 19,958 - -
Finance 41,603 (2,768) 41,603 8,059 - (10,827)
Government Services and Lands 23,273 20,036 23,033 20,036 240 -
Legislature 10,853 10,667 10,853 10,667 - -
Public Service Commission 1,887 1,825 1,887 1,825 - -
Works, Services and Transportation 218,268 134,157 133,120 115,699 85,148 18,458
Development and Rural Renewal 61,900 24,218 52,350 33,183 9,550 (8,965)
Environment and Labour 12,096 6,941 12,096 6,941 - -
Fisheries and Aquaculture 12,905 10,461 11,537 9,493 1,368 968
Forest Resources and Agrifoods 52,693 44,120 47,593 41,420 5,100 2,700
Industry, Trade and Technology 28,889 20,508 27,933 19,552 956 956
Mines and Energy 10,167 9,110 9,167 8,860 1,000 250
Tourism, Culture and Recreation 34,819 26,768 28,033 23,775 6,786 2,993
Education 714,994 692,708 701,698 680,900 13,296 11,808
Health 915,108 904,234 903,300 893,076 11,808 11,158
Justice 108,629 101,603 108,629 101,603 - -
Municipal and Provincial Affairs 145,184 122,892 81,060 77,345 64,124 45,547
Newfoundland and Labrador Housing Corporation 8,200 8,200 8,200 8,200 - -
Social Services 368,742 358,903 368,742 358,903 - -
TOTAL 3,407,805 3,075,227 3,207,352 2,999,105 200,453 76,122
EXPENDITURE SUMMARY
1995-96 Revised
Consolidated Fund Services 612,165 508,353 601,008 501,046 11,157 7,307
Executive Council 20,205 19,487 20,205 19,487 - -
Finance 40,342 4,957 40,342 14,564 - (9,607)
Government Services and Lands 21,199 18,715 20,954 18,680 245 35
Legislature 14,288 14,116 14,288 14,116 - -
Public Service Commission 2,761 2,677 2,761 2,677 - -
Works, Services and Transportation 253,824 153,899 135,033 95,057 118,791 58,842
Development and Rural Renewal 62,890 30,829 46,678 31,394 16,212 (565)
Environment and Labour 14,020 9,270 14,020 9,270 - -
Fisheries and Aquaculture 12,706 11,518 11,448 10,438 1,258 1,080
Forest Resources and Agrifoods 49,979 45,047 46,819 41,947 3,160 3,100
Industry, Trade and Technology 24,841 19,227 19,598 17,916 5,243 1,311
Mines and Energy 10,411 9,919 10,411 9,919 - -
Tourism, Culture and Recreation 40,842 32,975 31,411 27,764 9,431 5,211
Education 739,775 716,776 718,334 695,947 21,441 20,829
Health 925,296 912,883 901,102 889,419 24,194 23,464
Jusfice 114,096 107,621 114,096 107,621 - -
Municipal and Provincial Affairs 151,023 127,902 88,300 85,239 62,723 42,663
Newfoundland and Labrador Housing Corporation 14,169 13,565 14,169 13,565 - -
Social Services 363,937 352,348 363,937 352,348 - -
TOTAL 3,488,769 3,112,084 3,214,914 2,958,414 273,855 153,670
EXHIBIT V
PUBLIC SECTOR DEBT
1992 to 1996
Five Years ending March 31
1996** 1995* 1994 1993 1992
(Millions of dollars)
Provincial Direct Debt:
Payable in Canadian Dollars 2,011.4 1,884.1 1,888.3 1,758.3 1,705.9
Due Government of Canada 762.5 796.9 828.0 862.8 860.3
Payable in U.S. Dollars 1,730.8 1,781.8 1,729.4 1,441.0 1,358.2
Payable in Other Currencies 1,049.2 1,182.3 954.5 806.9 737.5
Total Direct Debenture Debt 5,553.9 5,645.1 5,400.2 4,869.0 4,661.9
Treasury Bills 390.0 390.0 286.0 286.0 286.0
Total Provincial Direct Debt 5,943.9 6,035.1 5,686.2 5,155.0 4,947.9
Crown Corporation and Other Debt:
Utility 1,441.9 1,362.1 1,335.6 1,386.6 1,365.4
Housing 166.7 165.5 163.6 170.8 161.1
Municipal 759.9 735.1 738.4 697.5 651.1
Other 99.9 121.8 99.3 78.3 86.8
Total Crown Corporation and Other Debt 2,468.4 2,384.5 2,336.9 2,333.2 2,264.4
Deduct Sinking Funds held for
Redemption of Debt:
Direct Debt 1,046.6 1,087.7 994.2 884.6 1,029.9
Guaranteed Debt 480.4 441.0 421.6 426.2 388.0
Total Sinking Funds 1,527.0 1,528.7 1,415.8 1,310.8 1,417.9
Total Public Sector Debt (Note 1) 6,885.3 6,890.9 6,607.3 6,177.4 5,794.4
* Preliminary
** Forecast
Note: Debt payable in foreign currencies is shown at the Canadian dollar equivalent using
the rates of exchange in effect March 31 of each year.
EXHIBIT VI
SUMMARY OF CURRENT REVENUES (By Source)
WHERE THE MONEY COMES FROM
Click here for Graphic
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
EXHIBIT VII
SUMMARY OF CURRENT ACCOUNT EXPENDITURES (By Function)
WHERE THE MONEY GOES
Click here for Graphic
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
EXHIBIT VIII
SUMMARY OF GROSS CAPITAL ACCOUNT EXPENDITURES
(By Function)
Click here for Graphic
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
EXHIBIT IX SUMMARY OF GROSS GOVERNMENT EXPENDITURES CURRENT AND CAPITAL (By Sector) Click here for Graphic (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
EXHIBIT X
SUMMARY OF BUDGETARY FINANCING SOURCES
(For Gross Current and Capital Account Expenditures)
Click here for Graphic
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
EXHIBIT XI
SUMMARY OF SALARY COSTS BY DEPARTMENT
1996-97 and 1995-96 (Revised)
1996-97 1995-96
DEPARTMENT Estimates Revised
Executive Council 11,713,200 12,864,700
Finance 10,809,900* 9,277,200
Government Services and Lands 15,670,900 14,871,900
Legislature 4,327,600 6,568,500
Public Service Commission 1,165,000 1,790,600
Works, Services and Transportation 66,674,100 68,870,300
Development and Rural Renewal 8,437,300 10,670,200
Environment and Labour 7,194,000 7,733,400
Fisheries and Aquaculture 4,888,300 5,841,600
Forest Resources and Agrifoods 20,267,500 21,657,300
Industry, Trade and Technology 4,924,600 4,961,600
Mines and Energy 5,070,300 5,300,400
Tourism, Culture and Recreation 10,494,800 12,629,900
Education 8,951,700 10,923,600
Health 5,049,100 5,769,800
Justice 51,638,900 54,606,800
Municipal and Provincial Affairs 6,457,500 7,613,800
Social Services 34,630,700** 36,813,400**
TOTAL 278,365,400 298,765,000
Less: Capital Account Salary Expenditure 6,827,400 6,970,400
Total: Current Account Salary Expenditure 271,538,000 291,794,600
* Includes $1,800,000 for the commencement of Pay Equity payments to the
General Service group.
** Includes salary expenditures for employment initiatives under Department of
Social Services Employment Programs ($1,100,000, 1996-97
Estimates; $1,113,500, 1995-96 Revised).
EXHIBIT XII
ESTIMATED INTEREST AND DEBT RETIREMENT 1996-97
Sinking
Amount Int. Fund Sinking Debt
Term Series Outstanding Rate Rate Interest Fund Redemption
% % $ $ $
Payable in Canadian Dollars:
1975/1996 4V 1,296,000 10 1/2 - 136,100 646,900
1982/2002 5K 50,000,000 14 3/4 2 7,375,000 1,000,000
1983/2003 5L 125,000,000 12 7/8 2 16,093,800 2,500,000
1984/2004 5N 100,000,000 13 1/2 2 13,500,000 2,000,000
1985/1997 5P 80,000,000 10 1/4 - 8,200,000
1986/2006 5Q 100,000,000 11 2 11,000,000 2,000,000
1986/2001 EC3 100,000,000 10 - 10,000,000 68,942,600
1987/2010 5R 100,000,000 9 3/8 2 9,375,000 2,000,000
1987/2007 EC4 15,447,000 9 2 1,390,200 308,900
1987/2007 5S 42,300,000 10.79 2 4,564,200 846,000
1988/2008 5T 100,000,000 11 1/4 2 11,250,000 2,000,000
1988/1997 J5 75,000,000 10.86 - 8,144,900
1989/2012 5U 125,000,000 11 2 13,750,000 2,500,000
1989/2014 5V 150,000,000 10 1/8 1 1/2 15,187,500 2,250,000
1991/2001 5W 27,929,000 10 1/2 - 2,932,500
1991/2021 5X 122,071,000 10.95 - 13,366,800
1992/1998 EC5 150,000,000 9 1/8 - 13,687,500
1993/2003 EC6 150,000,000 8 3/4 2 13,125,000 3,000,000
1995/1999 J12 42,000,000 FLOATING - 2,520,000
1995/1999 NPPF 5,804,181 8 - 464,300 791,200
1995/2025 6B 100,000,000 9.15 3/4 9,150,000 750,000
1996/2026 6C 150,000,000 8.45 3/4 12,675,000 1,125,000
1996/2004 5Z 98,895,000 9.55 - 9,444,500
Anticipated 1996/1997 6,375,000
213,707,300 22,279,900 70,380,700
Payable in United States Dollars:
1986/1996 AE 100,000,000 8 1/2 - 11,645,000 92,999,800
1987/2007 AF 100,000,000 11 5/8 2 15,926,300 2,740,000
1989/2019 AG 150,000,000 9 1 1/2 18,495,000 3,082,500
1990/2020 AH 150,000,000 9 7/8 1/2 20,293,100 1,027,500
1990/2020 AJ 150,000,000 10 1/2 20,550,000 1,027,500
1991/2021 AK 200,000,000 9 1/2 24,660,000 1,370,000
1992/2022 AM 200,000,000 8.65 1/2 23,701,000 1,370,000
1993/2023 AN 200,000,000 7.32 3/4 20,056,800 2,055,000
1994/2001 J11 23,500,000 FLOATING - 1,971,900
157,299,100 12,672,500 92,999,800
Payable in Japanese Yen:
1992/1997 J8 11,000,000,000 6.25 - 8,913,000 143,000,000
1994/1999 J9 4,700,000,000 4.8 - 2,932,800
1994/2001 J10 2,300,000,000 4.95 - 1,480,100
13,325,900 143,000,000
EXHIBIT XII
ESTIMATED INTEREST AND DEBT RETIREMENT 1996-97 (Cont'd)
Sinking
Amount Interest Fund Sinking Debt
Term Series Outstanding Rate Rate Interest Fund Redemption
% % $ $ $
Payable in Swiss Francs:
1985/2000 S3 150,000,000 5 3/8 - 9,271,900
1987/2002 S4 150,000,000 5 1/8 - 8,840,600
1988/2003 S5 150,000,000 5 2 8,625,000 2,471,200
1990/1999 S6 125,000,000 7 1/2 - 10,781,300
1991/2003 S7 150,000,000 7 2 12,075,000 2,191,700
49,593,800 4,662,900
433,926,100 39,615,300 306,380,500
Canada Pension Plan:
(20 Year Term)
1976/77 3A 30,988,000 8.73-9.25 1,945,600
1977/78 3A 33,037,000 8.77-9.37 3,001,000
1978/79 3A 36,622,000 9.35-10.16 3,499,500
1979/80 3A 40,070,000 9.98-12.74 4,242,100
1980/81 3A 42,645,000 11.61-13.46 5,416,800
1981/82 3A 52,973,000 13.66-17.51 8,173,600
1982/83 3A 52,104,000 12.01-16.53 7,645,000
1983/84 3A 50,738,000 10.92-12.14 5,882,300
1984/85 3A 47,146,000 12.08-14.06 0.004 6,303,100 198,400
1985/86 3A 50,570,000 10.58-12.57 0.012 5,806,900 589,800
1986/87 3A 59,659,000 9.04-10.17 0.012 5,735,200 734,500
1987/88 3A 43,829,000 9.12-11.07 0.013 4,280,400 568,300
1988/89 3A 41,635,000 9.62-10.39 0.014 4,196,400 596,000
1989/90 3A 45,188,000 9.15-10.31 0.016 4,475,100 727,000
1990/91 3A 40,432,000 9.78-11.33 0.016 4,385,400 665,000
1991/92 3A 40,858,000 9.81-10.04 0.017 4,052,800 684,800
1992/93 3A 28,770,000 9.17-9.45 0.017 2,695,300 493,900
81,736,500 5,257,700
Government of Canada:
Winter Capital Projects 3,827,200 7.44-9.40 - 303,400
CMHC Loans 11,623,100 5.75-14.75 - 834,500 148,900
DRIE 9,810,600 5.77- 9.72 - 828,800 4,989,300
1,966,700 5,138,200
TOTAL 517,629,300 44,873,000 311,518,700
EXCHANGE RATES USED IN CONVERSION
U.S. 1.3700 Cdn.
Yen 0.0130 Cdn.
S.F. 1.1500 Cdn.
EXHIBIT XIII
DETAILS OF CAPITAL EXPENDITURES
ESTIMATES 1996-97
ACTIVITY GROSS RELATED NET
NO. DETAILS EXPENDITURE REVENUE EXPENDITURE
$ $ $
CONSOLIDATED FUND SERVICES
1.2.01 Various Facilities - Rental Purchase 77,200 77,200
1.3.02 Issues Under Guarantee (Statutory) 1,000,000 1,000 999,000
TOTAL 1,077,200 1,000 1,076,200
FINANCE
2.2.02 Recoveries on Loans, Advances and Investments - 10,827,000 (10,827,000)
TOTAL - 10,827,000 (10,827,000)
GOVERNMENT SERVICES AND LANDS
4.1.05 Land Management 240,000 240,000 -
TOTAL 240,000 240,000 -
WORKS, SERVICES AND TRANSPORTATION
2.2.05 Salt Storage Sheds 300,000 - 300,000
2.2.06 Alterations - Leased Accommodations 75,000 - 75,000
2.3.03 Heavy Equipment 4,000,000 125,000 3,875,000
3.2.01 Administrative Support - Road Construction 504,900 - 504,900
3.2.02 Pre - Engineering - Road Construction 650,000 - 650,000
3.2.03 Improvement and Construction - Provincial Roads 6,000,000 2,090,000 3,910,000
3.2.04 Highways - Transportation Initiative 30,000,000 34,000,000 (4,000,000)
3.2.05 Regional Roads - Transportation Initiative 24,000,000 24,000,000 -
3.2.06 Strategic Highway Improvement Program 4,000,000 2,000,000 2,000,000
3.2.07 Land Acquisition 2,500,000 - 2,500,000
3.3.01 Alterations and Improvements to Existing Facilities 6,350,000 2,475,000 3,875,000
3.3.02 Development of New Facilities 760,000 1,000,000 (240,000)
3.3.03 Advanced Planning - Studies 200,000 - 200,000
4.1.03 Airstrips 1,000,000 1,000,000 -
4.2.03 Ferry Terminals 500,000 - 500,000
4.2.04 Ferry Vessels 3,968,000 - 3,968,000
5.2.03 Realty Services 40,000 - 40,000
5.3.02 Park Development - C. A. Pippy Park Commission 300,000 - 300,000
TOTAL 85,147,900 66,690,000 18,457,900
DEVELOPMENT AND RURAL RENEWAL
2.2.02 Enterprise Loan Fund 8,100,000 17,500,000 (9,400,000)
4.1.02 Comprehensive Labrador Development Agreement 1,450,000 1,015,000 435,000
TOTAL 9,550,000 18,515,000 (8,965,000)
FISHERIES AND AQUACULTURE
2.2.02 Fisheries Facilities 100,000 - 100,000
3.1.03 Middle Distance Fishing Vessels 630,000 - 630,000
3.1.04 Fishing Boat Bounties 138,000 - 138,000
3.5.02 Economic Renewal Agreement 500,000 400,000 100,000
TOTAL 1,368,000 400,000 968,000
EXHIBIT XIII DETAILS OF CAPITAL EXPENDITURES ESTIMATES 1996-97 ACTIVITY GROSS RELATED NET NO. DETAILS EXPENDITURE REVENUE EXPENDITUREFOREST RESOURCES AND AGRIFOODS 2.1.05 Resource Roads Construction 1,500,000 - 1,500,000 2.3.01 Economic Renewal Agreement 3,000,000 2,400,000 600,000 4.1.04 Land Development 300,000 - 300,000 4.1.05 Green Plan 300,000 - 300,000 TOTAL 5,100,000 2,400,000 2,700,000 INDUSTRY, TRADE AND TECHNOLOGY 2.1.04 Atlantic Investment Fund 956,000 - 956,000 TOTAL 956,000 - 956,000 MINES AND ENERGY 3.1.07 Development of Infrastructure - Offshore Fund 1,000,000 750,000 250,000 TOTAL 1,000,000 750,000 250,000 TOURISM, CULTURE AND RECREATION 3.1.04 Support for Cultural Activities 100,000 - 100,000 3.3.03 Historic Sites Development 10,000 10,000 - 4.1.05 Park Development 500,000 - 500,000 4.1.06 National Parks 5,000 2,500 2,500 5.1.03 Community Sports Facilities 1,444,500 - 1,444,500 6.2.02 Economic Renewal Agreement 4,726,000 3,780,800 945,200 TOTAL 6,785,500 3,793,300 2,992,200 EDUCATION 2.1.10 Building and Equipping Schools 6,910,000 - 6,910,000 2.1.11 Transportation of School Children - Debt Principal 1,670,000 - 1,670,000 3.1.11 Skills Training Projects - Offshore Fund 1,635,000 1,488,000 147,000 3.2.02 Furnishings and Equipment - Memorial University 1,000,000 - 1,000,000 3.2.03 Sir Wilfred Grenfell College - Debt Principal 375,400 - 375,400 3.2.04 Various Buildings - Memorial University 1,000,000 - 1,000,000 3.3.02 Furnishings and Equipment - Provincial Colleges 500,000 - 500,000 3.3.03 Provincial College Facilities 85,000 - 85,000 4.2.02 Provincial Information and Library Resources 120,500 - 120,500 TOTAL 13,295,900 1,488,000 11,807,900 HEALTH 4.3.01 Furnishings and Equipment - Health Care Facilities 4,500,000 - 4,500,000 4.3.02 Health Care Centres 350,000 - 350,000 4.3.03 Hospital Facilities 3,750,000 50,000 3,700,000 4.3.04 Newfoundland Cancer Treatment and Research Foundation - 600,000 (600,000) 4.3.05 Long Term Care Facilities 3,208,300 - 3,208,300 TOTAL 11,808,300 650,000 11,158,300
EXHIBIT XIII
DETAILS OF CAPITAL EXPENDITURES
ESTIMATES 1996-97
ACTIVITY GROSS RELATED NET
NO. DETAILS EXPENDITURE REVENUE EXPENDITURE
$ $ $
MUNICIPAL AND PROVINCIAL AFFAIRS
2.3.04 Waste Management Facilities - Debt Principal 292,300 - 292,300
2.3.05 Industrial Water- Systems 350,400 - 350,400
2.3.06 Water and Sewer Servicing - Coastal Labrador 3,115,000 2,096,000 1,019,000
3.2.06 Municipal Councils 1,354,000 - 1,354,000
3.3.02 Road Construction and Paving - Debt Principal 9,250,000 50,000 9,200,000
3.3.03 Water and Sewer Systems - Debt Principal 25,262,500 120,000 25,142,500
3.3.05 Canada-Newfoundland Infrastructure Program 21,100,000 14,300,000 6,800,000
4.1.03 Disaster Assistance for Infrastructure 3,200,000 1,811,000 1,389,000
4.1.04 Joint Emergency Preparedness Projects 200,000 200,000 -
TOTAL 64,124,200 18,577,000 45,547,200
TOTAL: CAPITAL ACCOUNT EXPENDITURES 200,453,000 124,331,300 76,121,700