August 19, 1999
(Executive Council)

Premier responds to Fraser Institute survey

Premier Tobin says that information on Newfoundland and Labrador recently released in a Fraser Institute survey is completely inaccurate. Michael Walker, head of the institute, stated that the province's inflexibility, particularly with its stand on Voisey's Bay, has deterred investment.

"Newfoundland and Labrador's stance on Voisey's Bay has in no way deterred investment in this province. If anything, it has clarified the province's position on mining projects, and we continue to see new investments being made," said the Premier. "We have taken the position on Voisey's Bay with the support of the people of this province in order to make sure that they receive full and fair benefits from the project."

The Premier added that the province has a strong investment climate, which offers many advantages, and there are many factors to support this claim. He noted that people are still conducting mining exploration, and are still investing in mining projects.

In addition, a Statistics Canada survey on investment intention released in July shows that Newfoundland and Labrador will lead the country in capital spending growth in 1999. At 29.2 per cent, this projection is quadruple the national rate of 6.8 per cent. In total, capital spending is expected to exceed $3.5 billion, an increase of nearly $800 million over 1998.

"Our province also has one of the most competitive corporate tax regimes in the country, which makes for an excellent investment climate," Premier Tobin pointed out. "We also experienced 4.4 per cent gross domestic product growth in 1998. Major banks and financial institutions across the country, such as the Bank of Montreal and the Conference Board of Canada, have projected that this year we will once again lead all of Canada in growth at 5.5 and 5 per cent, respectively. That does not happen without sound and solid investments."

Cost effectiveness is also a key factor for businesses to consider. In 1998, St. John's ranked first in a KPMG business cost comparison study of 42 cities in seven countries. In 1999, St. John's ranked second in an expanded study of 64 cities in eight countries, just a half point behind the number one city.

The Premier also pointed out that the province has reduced its payroll tax for the past two years. In addition, the provincial government offers both local businesses, and businesses that wish to set up here, a very competitive incentive program, called EDGE (Economic Diversification and Growth Enterprises). Since 1995, 64 companies have invested a total of $75 million in the provincial economy as a result of the EDGE program.

"We have clear signs that we are on a very positive economic track. Last month's labour force numbers from Statistics Canada show steady growth in our labour market, with an increase of 16,100 jobs over the same time last year. This is the strongest growth of any province. Our investment strategies are working, and Newfoundland and Labrador remains an excellent place in which to do business," added Premier Tobin.

Media contact: Heidi Bonnell, Office of the Premier, (709) 729-3564.

1999 08 19                         2:25 p.m.