Province facing ‘significant deficits’
Finance Minister Jerome Kennedy starts pre-budget consultations in Carbonear
Finance Minister Jerome Kennedy held court at Fong’s Restaurant in Carbonear for prebudget consultations with the general public on Feb. 15.
Thirteen speakers presented on a variety of topics that included issues surrounding seniors, the workforce, people with disabilities and care for addicts.
Kennedy addressed each speaker in kind, took note of his or her concerns and said he would bring the issues back to his colleagues in government.
“I wish there was a way to give everyone everything that they needed because I know the great work that people do out there,” he said.
The event in Carbonear came just a day after the provincial government announced its financial forecast for the next couple of years.
The forecast anticipates the province will have a $3.2 billion shortfall by April of 2015.
With forecasted deficits of $1.6 billion next year and the year after, it would almost double the $726 million shortfall staring at the government this year.
Comparatively, all provinces with the exception of Saskatchewan ran a deficit in 2012. Saskatchewan had a surplus of approximately $56 million.
“What’s happened as a government is that we have less money coming in,” said Kennedy. “Over the last number of years, we’ve increased spending and our revenues have decreased.
“If we do not increase revenues or reduce expenditures then we’re looking at significant deficits for the next two years.”
The reduced revenues come in the form of lower taxes and Atlantic Accord funding.
Kennedy said taxes have decreased by $500 million since 2007, and 2012 saw the final Atlantic Accord payment, which was another $500 million-plus in the pockets of government.
I wish there was a way to give everyone everything that they needed because I know the great work that
people do out there.
In 2004, some 22 per cent of Newfoundland’s revenue came from equalization payments from the federal government.
“We get zero today,” said Kennedy. “It’s a very significant decrease in revenue.”
Kennedy also counts a decrease in revenue generated from oil as a reason that contributes to the deficit.
Also, in 2012 there was 20 million less barrels of oil produced.
“At $100 a barrel, that’s a lot of money,” said Kennedy.
Spending-wise, Kennedy said that in the 10-year span between 2003 and 2013 spending increased from $3.8 billion to $6.7 billion. That is a 80 per cent increase.
In 2012, the provincial government spent $2.9 billion on health and $1.2 billion on education.
“A big chunk of our budget went to health and education,” said Kennedy.
The finance minister also highlighted an increased dedication to improving the infrastructure in Newfoundland and Labrador.
“We’ve rebuilt the province, to a certain extent,” said Kennedy.
Kennedy said he expects to hear the same kind of concerns in the rest of the pre-budget consultations around the province, which pick up again in Stephenville and Corner Brook on Feb. 18.
“I am not surprised that people are coming forward and putting forward your requests, it’s the passion that you bring into this that makes this province such a good place to live,” he said.
Baccalieu Trail Seniors Outreach Office project coordinator Marie Ryan (left) and advisory committee chairperson Cathy Kleinwort present to Finance Minister Jerome Kennedy during a pre-budget consultation meeting at Fong’s Restaurant in Carbonear on Feb. 14.
Finance Minister Jerome Kennedy addresses the crowd at a pre-budget consultation meeting at Fong’s Restaurant in Carbonear on Feb. 14.