Measures to reduce government expenditures

Joan Marie Aylward, Minister of Finance and President of Treasury Board, announced today that Government would take measures to reduce government expenditures in light of the downturn in the Canadian economy.

Effective immediately, government has placed a freeze on hiring. This does not mean staff lay offs. No new staff will be hired unless confirmed by Treasury Board and vacated positions will not be back-filled at this time, unless necessary for government operations. Travel by government employees will be frozen unless it is absolutely essential. 

"We have just received information from the federal government which indicates that equalization funding for this province will be less than previously expected," said the minister. "Some provinces like Ontario and Alberta have identified billions of dollars to bolster their economies during these challenging times. We don't have billions of dollars. We have limited resources and many demands. Our public service is very valuable and these are important measures to continue to instill confidence and maintain prudent management."

The economic slowdown, which has been worsened by the September 11 terrorist attacks in New York, has already affected workers in this province. "We don't even know the full impact of that tragedy yet so continued prudent measures are necessary at this time."

"We live in difficult times and governments across the country are dealing with deficits. This year our deficit will be higher than originally planned, mainly because of the declining Canadian dollar and our commitment to provide our public sector employees with the biggest salary increase they have seen in over a decade; 15 per cent over the life of the agreement," said the minister. 

The minister said she plans to make a mid-year financial statement in the coming weeks and at that time will provide greater details about the federal equalization transfers. Newfoundland and Labrador's economy continues to be strong. "We have seen the highest employment rates since Confederation. Economic diversity continues and while we are confident that our GDP will remain strong, we must continue to be prudent in our management under uncertain global conditions."

Media contact: 
          Glenn Bruce, Treasury Board, (709) 729-6793 
          Lynn Barter, Finance, (709) 729-0329 

2001 10 16                            4:55 p.m.