• In the 2000-2001 Budget, government will continue to re-invest in the priority area of health care. To assist in the funding of these re-investments, government will access additional revenues of nearly $215 million from several sources. These include: Newfoundland and Labrador Hydro, Newfoundland and Labrador Housing Corporation, Sinking Funds and Newfoundland Liquor Corporation.

• These additional revenues include some $129 million government is able to defer from 1999-2000 because it has exceeded its financial objectives. These revenues will fund important and necessary investments in the health and well-being of Newfoundlanders and Labradorians.

•  As sole shareholder of Hydro, the province is able to exercise discretion with respect to the receipt of dividends. This gives government some flexibility in designing budgets.

• In 2000/01, government will receive dividends of $121 million, comprised of regular dividends of $61 million and special dividends of $60 million. The regular dividends include revenues from the new recall arrangements and Guaranteed Winter Availability Contract related to the Upper Churchill.

• $76 million of the $121 million to be received in 2000/01 represents the special dividends of $60 million and $16 million in regular dividends deferred from the 1999/00 fiscal year.

• Government guarantees all of Hydro�s long-term debt and short-term borrowings, and as such receives a guarantee fee. This fee is based upon the total debt of Hydro guaranteed by the province as of the preceding December 31 (i.e. Hydro�s fiscal year end) and is paid quarterly.

• In the 2000 Budget, government has requested Hydro to pay the regular guarantee fee of $10.8 million based upon its December 1999 year end, plus to accelerate payment of the fee for those three quarters of its current fiscal year which fall within government�s 2000/01 fiscal year. This is a one-time action and will result in $8.1 million in additional revenues.

• This "accelerated" guarantee fee had been included in the 1999 Budget, but has been deferred to 2000/01.

2000 03 22