Provincial budget to be delivered on Monday
Liberal majority government’s first budget expected to tackle pandemic impact, spending issues
The province’s much-anticipated Budget 2021 will be delivered in the House of Assembly on Monday at 2 p.m. by Finance Minister Siobhan Coady.
The budget is coming at a time when the province is reeling from the effects of the COVID-19 pandemic and facing the risk of financial collapse under the weight of a $47.3-billion provincial debt.
Monday’s budget will set the direction Premier Andrew Furey’s government plans to take to transform the provincial government, improve service delivery and start to address the ever-growing financial concerns.
It will be the first budget since the Liberals won a majority government in the winter’s controversial election.
The last provincial budget was delivered in October 2020, which was delayed from its usual springtime release because of the pandemic.
The then-minority Liberal government released a “hold-the-line” budget due to the pandemic.
The net debt of the province at that time was listed in budget documents as $16.4 billion, with over $1.5 billion to be spent on debt servicing.
According to Auditor General Denise Hanrahan’s most recent report, the net debt of the province — including this spring’s forecasted deficit — as of March 31, 2021, is still $16.4 billion.
The Premier’s Economic Recovery Team (PERT), led by Dame Moya Greene, painted a much bleaker financial picture, adding in many other factors and estimating that the current debt of the province is actually $47.3 billion. The economic recovery team calculated the province’s net debt as gross debt minus financial assets, and noted the net debt also does not include all of the other financial exposures of the provincial government, nor its entities, including Nalcor Energy, the liquor corporation and the Atlantic Lottery Corp., the PERT report stated.
The recommendations included in the Greene report will not likely be factored into Monday’s budget, because the report was released as the provincial government was already well into its budget preparation.
However, Coady has said that because much of the information used by Greene’s team for its report was also the information used for budget preparation, there may be some overlap regarding proposed measures.
Those who work in the public sector will have eyes on Monday’s budget, as an over-inflated public service is one of the major drains on the public purse, according to the PERT report.
The Newfoundland and Labrador Federation of Labour, however, says the provincial government should raise taxes for the rich in this Monday’s budget to help the province get back on solid financial ground.
“For too long those who make the most haven’t been paying their fair share,” said federation president Mary Shortall. “If this government is serious about addressing our revenue shortfall, a good first step would be to raise taxes on big businesses and the wealthy.”
Shortall said the province has the highest tax-bracket threshold and the lowest income-tax rates for highincome workers in Atlantic Canada.
She noted the top income tax level in Newfoundland and Labrador doesn’t kick in until a salary of almost $190,000 per year and the rate is 18.3 per cent, while in Nova Scotia the top tax bracket is $150,000 and the rate is 21 per cent.
The Newfoundland and Labrador Employers’ Council, meanwhile, has launched an advertising campaign and website designed to promote the benefits of restructuring government services to fix the province’s spending problem.
“There are two paths our province can take,” said council executive director Richard Alexander. “Path 1 is more denial and delay on our spending problem where we sink deeper into debt and uncertainty. Or, Path 2 is to stand up, admit we have a spending problem and work together as citizens of our province to restructure and modernize our government to be sustainable, perform better and give our children hope for a promising future. We’ve waited long enough. It’s time to call on politicians to act.”