INVESTING FOR GROWTH

Mr. Speaker, with two thirds of all government spending devoted to social programs, we must not forget that government also has a role in ensuring the Province is an attractive and prosperous place to do business.

Tax Climate

In order to encourage economic growth, government must create an environment which attracts and sustains business activity. A competitive tax climate is an important component and Government is committed to a regime which promotes investment and employment.

Corporate income tax rates in Newfoundland and Labrador are among the most competitive in Canada. In 1997, this government introduced the Harmonized Sales Tax, or HST. This major tax reduction initiative cut taxes by $105 million per year. In addition to lowering the sales tax rate for consumers by almost 5%, the HST removes sales tax from business purchases. This reduces costs and makes our businesses more competitive.

In 1998, this government increased the exemption threshold for the payroll tax from $100,000 to $120,000. This measure removed 225 businesses from the tax rolls and reduced the tax burden for all employers. These measures contribute to our economic growth.

Acting on our commitment to reduce the payroll tax, I am pleased to announce that effective January 1, 1999, the exemption threshold for the payroll tax will be further increased - from $120,000 to $150,000. This means 525 businesses have been removed from the tax rolls over the past two years and all employers will share in a $2.5 million tax reduction.

Rural Renewal

All regions of the Province must benefit from economic development initiatives. Government is partnering with Regional Economic Development Boards, the federal government and the private sector to advance growth in all areas. We have achieved significant success in turning our economy around.

To maintain the progress which has been achieved in regional economic development and in small business development, and to ensure economic diversification in rural communities, particularly those hard hit by the groundfish moratorium, this budget commits new resources through federal-provincial funding under the post-TAGS economic development program. A total of $81 million has been allocated by both governments over three years with $28 million to be spent in 1999-2000. This funding will be targeted in conjunction with the priorities of the Regional Economic Development Boards and initiatives led by the private sector.

In addition, $5.7 million is allocated for regional economic development in 1999-2000 under existing federal-provincial agreements.

Tourism

The tourism potential of Newfoundland and Labrador is immense. Our tourism industry has experienced considerable growth in recent years. This momentum will continue in 1999 as we celebrate Soiree �99, the 50^th anniversary of Confederation. An additional $1.4 million is committed for this event.

In order to ensure tourism visits continue to increase, we must aggressively promote Newfoundland and Labrador as a world class destination. In order to achieve this, the tourism marketing budget is being doubled from $1.8 million to $3.6 million annually.

In 2000 the momentum will continue as the Province launches the Viking 1000 celebrations. $2.6 million has been allocated for planning, events and marketing.

Tourism creates economic activity and jobs. This budget commits funds to develop tourism products and build infrastructure to ensure that the experiences of those visiting Newfoundland and Labrador are memorable. Over the next three years the federal and provincial governments will provide $11.5 million for the development of snowmobile trails, $5.9 million on the island for the Integrated Snowmobile Trail and $5.5 million for the Labrador Trail Initiative. This funding is in addition to ongoing development of the Newfoundland T�Railway and East Coast Trail.

To build on the invaluable tourism exposure the Province received from hosting the 1999 Canada Winter Games, government is committing $300,000 for two more World Cup Triathlon races in Corner Brook in 1999 and 2000. Government is also committing $150,000 toward hosting the 2000 Commonwealth Judo Championships in Stephenville.

Newfoundland and Labrador is a Province rich in natural resources. The promise of a dynamic petroleum sector had its beginnings with the Hibernia development. Hibernia is now in production with 24 million barrels of crude produced in 1998 and an expectation that production will double to 50 million barrels in 1999. This year, for the first time since 1988, two drill rigs will engage in exploration in our offshore.

The Terra Nova project is on schedule to produce first oil in 2000. We are confident that the Hebron/Ben Nevis and White Rose fields will be developed in the near future. The $200 million transshipment facility at Whiffen Head is operational with a $65 million expansion planned to prepare for Terra Nova oil. We have now moved to an era of a multi-development industry which is making a substantial contribution to the economy of this Province.

This government is committed to ensuring that development of those resources progresses in a responsible manner which provides full and fair benefits for the people of the Province.

In order to effectively regulate this new industry and ensure that Newfoundlanders and Labradorians fully benefit from the opportunities which are available, government is increasing the annual operating budget of the Department of Mines and Energy by almost $1 million. This increased funding will be used, among other things, to provide additional professional staff including petroleum geologists, engineers and financial analysts.

Mineral resources continue to play a key role in the economy of this Province. Future prospects for the growth of the mining sector are very promising given our mineral endowment and a growing junior mining sector. We recognize that the most critical element in developing mineral resources is exploration.

To attract the investment necessary for mineral exploration, government will implement a three year, $6 million Mineral Exploration Program in support of junior mining companies and prospectors based in Newfoundland and Labrador. The program will provide for matching funds to be spent by the industry and will result in an additional $12 million being invested in the mining sector over the next three years.

There are four components to the Mineral Exploration Program:

• an expanded Prospectors Assistance Program with annual funding increasing to $250,000

• a new Junior Company Exploration Assistance Program with annual funding of $1.5 million

• a new Dimension Stone Incentive Program with annual funding of $250,000, and

• an enhanced Promotion Program with annual funding increasing to $250,000.
   

Independent small boat harvesters have an important role to play in the recovery and diversification of the fishery. In order to enhance their ability to participate in this new fishery, I am pleased to announce the removal of the $50,000 minimum loan amount under the Fisheries Loan Guarantee Program. This will enhance access to government guaranteed loans through commercial banks by small boat fishers.

Newfoundland and Labrador Legacy Nature Trust

The Province�s outdoor resources are priceless from both a commercial and recreational point of view. As steward of these resources, government must conserve them for future generations. The Province will contribute $1 million to the Newfoundland and Labrador Legacy Nature Trust. This trust will be established as a non-profit agency with a mandate to raise funds nationally and internationally to finance conservation projects in Newfoundland and Labrador.