Budget Plan for 2007-08

Revenue Plan

Mr. Speaker, despite setbacks last year for the Terra Nova Project, our offshore oil industry continues to grow and mature. Forecasting revenues from the offshore continues to be a challenge, as we have no control over oil prices, production levels and exchange rates, the major factors used to estimate royalties and taxes. Oil prices for the next fiscal year are expected to remain robust. Production from our three offshore projects is expected to increase over last year’s levels. Additionally, we expect the White Rose Project to achieve payout, thereby increasing the province’s share of the revenues from this project. We are forecasting that total direct revenues from offshore projects will be over one and one quarter billion dollars this fiscal year, including over one billion dollars in royalties.

Mineral prices are also expected to remain strong. This year, we are projecting mining tax and royalties from our mineral operations to exceed $200 million, more than double last year’s revenues.

We must remain cognizant of the fact that our financial position can be influenced significantly by changes in resource prices. Our estimates were determined based on advice provided by independent authorities, but these estimates could fluctuate significantly.