Bennett sees positive impact of federal budget
Board of Trade would have liked more focus on deficit reduction
Provincial Finance Minister Cathy Bennett saw a number of measures in the federal budget that will benefit Newfoundland and Labrador and, in turn, likely enable her to meet commitments made in advance of the upcoming April 6 provincial budget.
“We are certainly pleased the federal government is continuing its commitment to infrastructure spending,” Bennett told reporters March 22.
“We’ve also seen a positive investment in child-care spaces which we think will be very helpful to our province, as well as recognition under the caregiver tax credit. We have a lot of individuals in our province who are providing care to elderly people in our communities and it’s positive to see that tax credit refined and clarified for those individuals.
“We anticipate there will be limited impact on the plans that we’ve had so far, and one of the really positive things we saw in the announcement from the federal government is the investment and changes to the labour market agreement and the enhanced EI eligibility. Both of those will provide us a unique opportunity in our province to look at job training and opportunities for continuing education in what is a changing economy in Newfoundland and Labrador.”
The federal budget came in short on new spending, but lays out the details on where money from last fall’s federal economic update will go. Key points in the budget that could benefit Newfoundland and Labrador include $7 billion over 10 years for new child-care spaces; a new caregiver benefit up to 15 weeks; and $950 million over five years to support innovation and what is described as setting up business super clusters.
Dorothy Keating, chairwoman of the St. John’s Board of Trade, said members are pleased there were no substantial new taxes announced in the federal budget. The board is anxious to get details of the skills and innovation agenda and the potential it holds for businesses.
The downside of the federal budget, she said, was a weak plan for addressing the federal debt.
“… they are not projecting to be in balanced budget until 2021-22, so we would like to have seen them address that a little stronger. But I guess we understand, with the uncertainty of what’s happening in the United States, there’s potential that when we get into the fall there may be some updates there, with respect to what’s going to happen with export taxation and what our friends to the south may or may not do with respect to border taxes, and how that would impact our members here in Newfoundland because we have a number of companies that do export.”
The provincial government is running a deficit of about
When it comes to a rebuilding plan for the northern cod stocks, the Fish, Food and Allied Workers (FFAW) union wants the government to remember why it’s important to plan for the longevity for the groundfish off the province’s northeast coasts.
“That fishery and the way it was, was the lifeblood of many, many communities around rural Newfoundland and Labrador,” FFAW secretary treasurer Dave Decker says. “It’s important that as we are rebuilding that stock … we keep focus on why we’re rebuilding fisheries and it’s to rejuvenate the same communities. I think it’s crucial.”
Decker took comfort that towns and harvesters affected by a cod moratorium that will celebrate a 25-year anniversary this year weren’t forgotten in a standing committee on fisheries and oceans report tabled in the House of Commons last Monday.
In addition to recommendations for a comprehensive rebuilding plan for the stocks that takes into account “the best available science” and ecosystem considerations and impacts, the report called for the Department of Fisheries and Oceans (DFO) to conduct annual assessments of not just cod stocks, but also caplin, one its main food sources.
“If you have a period when your stocks are relatively stable then you can go to multi-year assessments, but at a time of rapid change, which clearly we’re going through now, and environmental shift where things are changing fairly significantly, I think it’s important to have more annual assessments,” Decker says.
The report also recommends that DFO take into account the information collected by the FFAW and the Newfoundland and Labrador Department of Fisheries, Forestry and Agrifoods.
Decker says the data collected by harvesters, combined with their knowledge, is crucial to this process. “It needs to all flow through one point, but the stock-assessment process needs to incorporate all that information from whatever sources to come to the best conclusion of the overall state of the resource,” he says.
Ken Mcdonald, Member of Parliament for Avalon who initially motioned for the study last February, is hopeful that investments into DFO last year to create 135 new jobs for research scientists following years of cutbacks will help facilitate those assessments.
“I think 17 or 18 of those are going to be for Newfoundland and Labrador to look at the fisheries here. I’m hoping a good portion of that will be put towards looking at the cod stock, where it’s to now and where it’s going and how we can do better to make sure it survives,” Mcdonald says.
As it stands, the most recent assessment showed that the stock’s spawning biomass in areas 2J 3K and 3L improved from three per cent in 2005 to 34 per cent in 2015. While it represents a drastic increase above the critical low point experienced in the mid 1990s, it’s still far below the average spawning stock biomass observed through the 1980s.
As far as the DFO is concerned it’s still prudent to ensure fishing is kept to a minimum to allow the stock time to continue replenishing.
While Mcdonald recognizes now is the time to prepare for the stock to rebound to a point where it becomes sustainable, a full-fledged commercial fishery, it’s not the best course of action right now.
“I think if I’m correct, around 1997 or 1998 they did open up a commercial fishery again and it wasn’t ready,” Mcdonald notes. “It did more harm than good.”
The FFAW, meanwhile, feels that because the crab and shrimp are part of the northern cod diet, the success of one species is coming at a cost to the others. As such it may be time to expand the cod fishery in order to mitigate the pain felt in the shrimp and crab industry that’s helped keep rural communities alive following the moratorium.
“With the feedback loop, clearly there will be some reduction in crab and shrimp quotas this year and that’s probably going to continue as there’s success in cod,” Decker says.
“It’s crucially important right now and the time is pivotal that we start rebuilding a groundfish industry and if we don’t focus on rebuilding that industry now, we’re going to cause major pains for our communities.”
In concert with the report’s recommendations, both Mcdonald and Decker agree that whenever a potential cod fishery begins production, that harvesting practices yield the best possible product.
$1.6 billion, and Bennett said she is “very optimistic” it will meet its deficit target for the coming year of $800 million.
The April 6 provincial budget will not include any tax hikes or increased fees, she said.
Last Friday, Premier Dwight Ball unveiled a five-year infrastructure plan, promising nearly $3 billion in spending on roads, schools and other major projects.
“We have a significant amount of debt in our province and we are working very hard and have been for the last year to impact the deficit,” Bennett said. “We have very clear fiscal targets established and we are on track to hit those targets. Part of that is where we are with the debt, the investments in infrastructure, certainly, are coming at a time when we would have to borrow for that, but we believe that borrowing is prudent based on the economic impact of the infrastructure plan that we’ve put in front of the people of the province.
“We are very committed to bringing the province back to a surplus in 2022-23 … I’m very confident when we get to April 6 we will be able to give the people of the province some good news.”
Keating said the idea of business-led clusters is a positive idea. She said having a successful business or business leader in a mentorship role for a new business would be of great benefit. And, the most important element for the upcoming provincial budget, Keating noted, is that there be no new tax surprises for businesses in the province.
“The (government) has to focus on maximizing what benefits they have with respect to the money they have,” she said. “We certainly are hoping that some of the federal government infrastructure money we are seeing come in the province, and we are very positive with how they’ve recently announced the P3 initiatives (public-private partnerships). We see that as a very positive step forward that the provincial government is doing in terms of leveraging these funds and tapping into the expertise of the business community to develop these projects.”
Provincial Finance Minister Cathy Bennett reacts to the federal budget announced on March 22.