Budget Highlights 1999
BEST FISCAL PERFORMANCE SINCE CONFEDERATION
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The 1998-99 Budget projected a $10 million deficit. Approaching the fiscal year end,
there is a surplus of $136.9 million.
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Of the $136.9 million surplus in 1998-99, $132.6 million is being used strategically to
pay down hospital debt, for investments in health and education and for other purposes.
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This will result in a $4.3 million surplus for 1998-99, only the second since 1949.
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The Province will defer the receipt of dividends due in 1998-99 from Newfoundland and
Labrador Hydro until 1999-2000.
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Responsible financial management allows us to run a modest deficit of $33.3 million in
1999-2000 to sustain health and education initiatives. This projected deficit includes a
$30 million contingency reserve.
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There are no tax increases in this Budget. Instead, as a result of the last two Federal
Budgets, personal income taxes for residents of our Province will be reduced by in excess
of $450 million over the next five years, of which $140 million comes from provincial
revenues.
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A new provincial Low Income Seniors Benefit will provide a cheque of up to $200
for qualifying seniors.
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Effective for the1999 taxation year, the $120,000 exemption for payroll tax will be
increased to $150,000. In excess of 300 small businesses will be exempt from the payroll
tax and combined with the reduction last year, $12.5 million will be put back into the
hands of the business community over the next 5 years for employment and investment
purposes.
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No new layoffs are anticipated as a result of the budget and public sector employees
will receive a wage increase that is within our means.
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Economic growth is projected to lead Canada at 5%.
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The unemployment rate in February 1999 was 15.5% down from 20.3% in February 1996.
Employment is up by 6,100 from a year ago.
INVESTING IN PEOPLE
Health
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The Budget makes strategic investments in the Health and Community Services System:
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$40 million to eliminate Regional Hospital Boards' accumulated deficits to March 1998.
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$21 million in additional funding for hospital equipment, Year 2000 issues and to
continue the development of a Provincial Management Information System.
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$15 million in additional funding for Board budgets.
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$4.1 million to recruit salaried physicians.
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$1.8 million for new drug therapies.
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$1.3 million is included to implement the new Child, Youth and Family Services Act.
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$0.9 million over three years for the Tobacco Reduction Strategy
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Close to $90 million will be spent for hospital facilities in St. Johns, Happy
Valley-Goose Bay, Gander, Harbour Breton, Stephenville, Old Perlican, Fogo, Bonne Bay,
Grand Bank and Grand Falls-Windsor.
Education
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The level of School Board operating grants will be maintained in spite of declining
enrollment.
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$125 million is being invested in school construction and upgrades.
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Declining enrolment would normally, under the existing formula, have resulted in a
reduction of 418 teaching units, however Government will add back 236 of these positions.
With retirements, new teachers will be hired this year.
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The Province will continue to have the best pupil/teacher ratio in the country.
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$1.2 million will be provided to eliminate School Board debts remaining at the time of
consolidation.
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Government will maintain funding of $7.4 million for student assistants, even though
enrolments are declining.
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$7 million will be provided to Memorial University of Newfoundland to maintain programs
and to freeze tuition fees for at least two years.
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Government will provide $9 million to the MUN Opportunity Fund.
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$4.9 million will be provided to the College of the North Atlantic to maintain programs
and freeze tuition fees for at least two years.
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$1.2 million will be provided for renovations to the Prince Philip Drive campus of the
College.
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$6 million will be provided over the next two years to provide the public with Internet
access.
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Funding of $500,000 is provided for a Provincial Strategic Literacy Plan.
Helping Those Most in Need
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Consistent with the goals of the Strategic Social Plan, $10 million is included for the
Province's participation in the National Child Benefit. These programs will assist
children of low income families realize their potential.
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Funding of $18.3 million for post TAGS-Early Retirement Programs is included.
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$13 million will be invested in employment programs, including $7.5 million for students
and youth. This is helping to reduce unemployment, create more jobs and reduce the number
of persons receiving social assistance.
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Funding is included to enable social assistance recipients to retain the first $500 of
their income tax refund.
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The comfort allowance for seniors in personal care homes will increase from $110 to $125
per month, putting $3.5 million more into the hands of seniors over the next 5 years.
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Government is announcing an increase in the minimum wage of 25 cents from $5.25 to $5.50
Communities
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Reductions to Municipal Operating Grants will not proceed as scheduled resulting in $3
million more for municipalities in 1999 and $9 million more in 2000.
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$5 million is provided to assist municipalities with debt relief.
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A $20 million Municipal Capital Works program is approved for 1999-2000, along with a
$100 million Multi-Year Municipal Capital Works program cost shared 50/50 with municipal
partners.
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Government will fund its share of the construction of a new civic centre in the St.
Johns Region.
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Funding of $700,000 has been allocated to pay water taxes to the City of St. Johns
for Government owned facilities within the Citys boundaries.
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Government will provide $820,000 for remediation of contaminated sites and PCB
collection, transportation and destruction.
INVESTING IN INFRASTRUCTURE
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This year Government will spend $46 million on the construction of the Trans Labrador
Highway.
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Under the Federal/Provincial Transportation Initiative, $56 million will be spent
improving the Trans Canada Highway and major trunk roads.
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$16 million will be spent on Provincial road construction and improvements through block
funding and the Atlantic Region Freight Transition Assistance Program.
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$2 million will be spent on forest access roads, improving access to the Provinces
timber supply.
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$3 million will be spent on improvements to the Fogo/Change Islands ferry terminal.
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$1.8 million will be spent on a new Youth Remand Centre.
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$600,000 will be spent on Historic Sites Redevelopment.
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Together, the construction program for hospitals, schools and roads is one of the most
broadly based capital works programs in our Province's history.
INVESTING FOR GROWTH
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Federal-Provincial funding of $28 million is included in 1999-2000 for the three year
$81 million Canada-Newfoundland (post-TAGS) Economic Development and Fisheries Adjustment
Program to assist in rebuilding the economy of rural areas affected by the groundfishery
collapse.
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Government will allocate $6 million under the Strategic Enterprise Development Fund to
stimulate the growth of small and medium sized businesses in strategically important
sectors of the economy.
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The tourism advertising and promotions budget will be doubled in 1999-2000 to $3.6
million.
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Funding of $4 million is provided to commemorate this Provinces 50th anniversary
of Confederation (Soiree 99) and Viking 1000 celebrations.
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Government is providing $450,000 for World Cup Triathlon races and the year 2000
Commonwealth Judo Championships to highlight our province as a competitive destination for
major sporting events.
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$2 million has been provided to the Department of Mines and Energy to enhance the
Prospectors Assistance Program and the Promotion Program and to implement a Junior Company
Exploration Assistance Program and a Dimension Stone Incentive Program.
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$1 million has been provided to the Energy Branch of the Department of Mines and Energy
to ensure effective regulation of our new petroleum industry and ensure full and fair
benefits for the Province.
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$1 million has been provided to fund the Newfoundland and Labrador Legacy Nature Trust
to fund conservation, bio-diversity and ecosystem initiatives.
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