Kennedy brings down $6.7-B bud­get

Spending up, de­spite pro­jected deficit

The Southern Gazette - - FRONT PAGE - BY DAVE BARTLETT

The prov­ince isn’t go­ing to let a lit­tle re­ces­sion get in the way of its grand scheme for the fu­ture.

De­spite a pro­jected deficit of three-quar­ters of a bil­lion dol­lars for the com­ing year, the prov­ince an­nounced an in­crease to pro­gram spending of al­most 10 per cent in Thurs­day’s bud­get.

Fi­nance Min­is­ter Jerome Kennedy said in his first bud­get speech “Our gov­ern­ment will run a deficit of $750 mil­lion in 200910 rather than cut spending for im­por­tant pro­grams and ser­vices.”

Pro­gram spending has gone from $5.3 bil­lion last year to $5.8 bil­lion for the com­ing year, an in­crease of $519 mil­lion. The to­tal spending in the bud­get is $6.7 bil­lion, the largest bud­get the prov­ince has ever de­liv­ered.

Even though in­creased pro­gram spending equals two-thirds of the pro­jected deficit, Mr. Kennedy blamed this year’s short­fall on the fluc­tu­at­ing price of oil, pen­sion li­a­bil­i­ties and the fed­eral Con­ser­va­tives.

“Ap­prox­i­mately $383 mil­lion of the pro­jected deficit for this fis­cal year is re­lated to the im­pact of stock mar­ket de­clines on the value of our pen­sion funds. More than half of this deficit, $414 mil­lion, can be at­trib­uted to the uni­lat­eral action of the (Stephen) Harper gov­ern­ment to elim­i­nate ben­e­fits un­der the 1985 At­lantic Ac­cord.”

Oil rev­enues are es­ti­mated to de­cline $913.5 mil­lion for the com­ing year. Mr. Kennedy is bas­ing his bud­get on an av­er­age price for oil of US$50 a bar­rel for the com­ing year.

The good news is the prov­ince won’t need to bor­row money to cover the short­fall be­cause last year’s sur­plus was $2.4 bil­lion, due to larger than ex­pected oil rev­enues and an ac­count­ing de­ci­sion re­spect­ing the 2005 At­lantic Ac­cord ad­vance pay­ment.

So where will the money be spent?

The prov­ince al­ready an­nounced in­fra­struc­ture spending of $800 mil­lion for the year – ev­ery­thing from roads, fer­ries, schools and hos­pi­tals. The money will be spent in all re­gions of the prov­ince.

The cen­tral re­gion got its own sec­tion of the bud­get to help re­duce the im­pact of the clo­sure of the Abitibi-Bowa­ter pa­per mill. Be­yond the al­ready-an­nounced in­fra­struc­ture spending, two small gov­ern­ment offices will be re­lo­cated to Grand Falls-Wind­sor.

It was also an­nounced a planned res­i­den­tial treat­ment cen­tre for youth with ad­dic­tions will be built in the town.

The two pro­vin­cial de­part­ments that got the most money were health and ed­u­ca­tion.

A to­tal of $2.6 bil­lion will go into hos­pi­tals, di­ag­nos­tic equip­ment and salaries for new doc­tors. Some of that money will also be spent to con­tinue im­ple­ment­ing rec­om­men­da­tions from both the Cameron re­port and the prov­ince’s task force on ad­verse health ef­fects.

There will also be more seats cre­ated in Memo­rial Uni­ver­sity’s med­i­cal school and the schools of nurs­ing, phar­macy and so­cial work. Ed­u­ca­tion got a $130.9mil­lion boost – the depart­ment now has a bud­get of $1.29 bil­lion.

Un­der that ban­ner was the con­tin­u­a­tion of tu­ition freezes at Memo­rial Uni­ver­sity and the Col- lege of the North At­lantic. Rep­re­sen­ta­tives of the Cana­dian Fed­er­a­tion of Stu­dents were prac­ti­cally beam­ing as they learned the pro­vin­cial por­tion of the in­ter­est on stu­dent loans has been elim­i­nated.

That in­cludes out­stand­ing, cur­rent and fu­ture loans.

In the cat­e­gory of so­cial ser­vices, there were mod­est wage in­creases for home-care work­ers, im­prove­ments to men­tal-health and ad­dic­tions ser­vices, and the con­tin­u­a­tion of the prov­ince’s poverty-re­duc­tion strat­egy.

Stem­ming from a re­port on the prov­ince’s prison sys­tem, the Depart­ment of Jus­tice re­ceived money for up­grades to Her Majesty’s Pen­i­ten­tiary and other cor­rec­tions fa­cil­i­ties. There was also money for vi­o­lence-preven­tion strate­gies.

The prov­ince is in­vest­ing $81 mil­lion in re­search and de­vel­op­ment to di­ver­sify the prov­ince’s econ­omy, es­pe­cially in ocean­re­lated fields. There are also mod­est in­vest­ments in the aero­space and de­fence, cul­tural and fish­ing sec­tors.

Mr. Kennedy also noted there will no pub­lic-sec­tor lay­offs or wage roll­backs this year.

The bud­get also noted the prov­ince will con­tinue to have the low­est per­sonal in­come tax rates in At­lantic Canada. There are also new tax re­duc­tions for peo­ple on the lower end of the eco­nomic scale.

St. John’s Tele­gram


Pro­vin­cial Min­is­ters, in­clud­ing Health Min­is­ter Ross Wise­man, stand and ap­plaud Fi­nance Min­is­ter Jerome Kennedy as he de­liv­ers his first bud­get Thurs­day.

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