Budget 1997/98 - Highlights
A Plan to Live Within Our Means.

• The 1996-97 deficit is less than predicted. At $29.2 million it is the lowest deficit since 1965-66 other than for 1995-96 which benefited from one-time revenues.

  A three year financial plan, with a balanced budget forecast at the end of this period.

  A modest budgetary requirement of $20.3 million in 1997-98.

  A contingency of $30 million provided as a reserve against unforeseen variances which may arise during the year.

  Current account expenditures have been decreased by $69.2 million from 1996-97 levels through operational efficiencies achieved in Government restructuring and other measures.

  There are no tax increases in this budget.

  Harmonization of the provincial and federal sales tax systems will reduce taxes by more than $100 million a year.

  $7.6 million has been allocated to implement a provincial sales tax credit of $40 per adult and $60 per child. This will be phased out as family income exceeds $15,000 per annum.

  This Budget makes a significant investment towards addressing Government's pension obligations by committing payments of $196 million, $113 million and $123 million respectively in each of the next three years as one element in a pension reform strategy which will require the cooperation of our employees.

  The size of the Public Service will be reduced by 1,100 full time equivalent positions over the next three years as a result of budgetary actions. A $2 million Labour Force Adjustment Fund has been created to assist displaced workers and a $10 million voluntary departure program has been introduced.

  Total capital spending in 1997-98 will be $285 million including Municipal Capital Works, the Canada-Newfoundland Infrastructure Program, Phase II and the St. John�s Health Care Corporation. $77 million for roads construction is also included in this total. This is expected to create well in excess of 3,000 person years of employment.

Putting Social Programs First

Health Care - Our First Priority

• The existing three year commitment to stabilize funding in the health care sector is extended to 1999-00. Enhanced funding is provided for a number of new initiatives.

  $2.6 million has been allocated to retain and attract physicians to rural areas.

  Construction will begin on the new Janeway Child Health Care Centre. Major renovations will go ahead at St. Clare's Hospital as part of a three year, $100 million construction program.

  $7.8 million is allocated over the next three years for a new hospital at Harbour Breton.

  In cooperation with Voisey's Bay Nickel Company and INCO, construction and equipping of a new Lake Melville Hospital, at a total investment of about $30 million.

  $4.5 million for the James Paton Memorial Hospital, for redesign and construction in 1997-98. The next phase of construction will start in 1998-99.

  $2.5 million will be provided in addition to the annual allocation of $4.5 million for hospital equipment.

  $500,000 contribution to establish a neurotrauma research fund.

  Preliminary planning will be undertaken for health care facilities at Bonne Bay and Stephenville as part of a western region health care needs assessment.

  Renal dialysis services will be provided at the Central Newfoundland Regional Health Care Centre in Grand Falls-Windsor.

Education - A New Beginning

• Grants to school boards for administrative costs are being adjusted, consistent with the restructuring of the education sector and declining enrollment.

  Expenditures will more than double to $38 million on school construction and renovations over the next three years, compared to $18 million over the past three years. Three schools will be built in Labrador at Nain, Rigolet and Hopedale. The balance will be spent on renovations and needed maintenance across the system.

  In order to put the 10 new school boards on a solid financial footing $24 million was invested in 1996-97 to repay all school board debt, and a further $2.5 million was invested in the purchasing of new computers. This will ensure greater financial stability of school boards for years to come.

  Government will match a $6.3 million contribution by the private sector to Memorial University's Opportunity Fund.

Social Services and Employment - Renewing the Social Safety Net

• A new Department of Human Resources and Employment will be established. The existing programs of the Department of Social Services and some from the Department of Development and Rural Renewal will be incorporated into the new Department.

  High school students will be able to earn money to assist them to attend post-secondary institutions by tutoring other students in a new Tutoring for Tuition program being introduced in 1997-98. $500,000 is allocated.

  A special emphasis on those most in need - children, youth and families.

  A new $200,000 initiative will provide a day care subsidy so social assistance recipients, particularly single parents, can afford licenced child care providers.

  The Province will participate with the Federal Government in the new National Child Benefit program.

  An educational program to provide training for foster parents is being established, at a investment of $70,000.

  A new $175,000 initiative to eliminate the long waiting list for post-adoption services will be introduced in 1997-98.

  Students with dependents will be required to access the maximum available student aid.

  For 1997-98 $2.5 million will be invested in a new student employment program, available to all students, in celebration of the Cabot 500 Year. This will be matched by $2.0 million from the Federal Government and create summer employment for 3,00 students.

  Parent's resources will be taken into account in determining eligibility for Social Assistance for single able-bodied clients between the ages of 18 and 21.

  Government will continue its efforts to downsize and close group homes with a view to further integration into the community.

  $4 million has been allocated to provide Workers' Compensation coverage and to provide for a wage adjustment for home support workers.

Local Services

• Local Government must be financed by the public it serves. To this end the Province will promote greater self-determination and self- reliance for municipalities by working in partnership with them rather than for them.

  Municipal Operating Grants (MOGs) will be reduced by 20% in each of the next three years.

  The municipal share of debt servicing costs for municipal water and sewer debt will be increased from its present level of $343 per household to $400, and by a further $50 per household in each of the next two years.

  $9 million has been paid to the Newfoundland Municipal Financing Corporation to allow selected municipalities to restructure their debt and assume more responsibility for local services.

  Transition funding of $4 million has been provided to St. John's and Corner Brook as compensation for the elimination of firefighting grants.

  A new agency will be established to provide municipal assessment services to be run by a new Board made up of municipalities and the Province.

  The Province will participate with the Federal Government and municipalities in a new Infrastructure Program valued at $30 million.

  The Municipal Capital Works Program will be continued at $25 million for 1997-98.

  The Province will participate with the Cities of St. John's and Mount Pearl and the Town of Paradise, in the St. John's Harbour Clean-Up.

  $5 million is provided to assist with the construction of a new civic center for the St. John's area.

Partnering for Development

• Government is refocusing its assistance to business to ensure a proper role for the public sector in facilitating economic growth.

  A new five year comprehensive economic development agreement with the Government of Canada, valued at over $50 million, will be operational in 1997-98.

  Government remains fully committed to working with the Regional Economic Development Boards in the 20 economic zones.

  There is provision for a $17 million Strategic Enterprise Development Fund targeted at investment prospecting activities and to economic sectors with growth potential.

  Government will move to dispose of its interests in Newfoundland Farm Products Corporation.

  Government will consider public/private partnering and privatization options for the Bull Arm Site, Marystown Shipyard Ltd. and Marble Mountain.

Other Important Initiatives

• The Government is working with the Federal Government on the devolution of social housing to the Province from Canada Mortgage and Housing Corporation.

  The rent-geared-to-income scale for Newfoundland and Labrador Housing will range from 25% to 30%, to bring it more in line with standard practices in the country.

  The Government is actively and aggressively pursuing, with the Federal Government, an agreement on the Labrador Transportation Initiative to improve roads infrastructure in Labrador.

  The Province will continue to be policed by the RNC and the RCMP.

  The mining tax system will be reformed in 1997-98.