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NLIS 4
February 28, 2001
(Finance)

 

$58 million equalization allocation already factored into $100 million available for new initiatives

Provincial Finance Minister Joan Marie Aylward commented today on official equalization re-estimates released by federal Finance Minister Paul Martin yesterday. Minister Aylward stated that the province has been aware for some time that Newfoundland and Labrador�s share of equalization payments would be increasing.

"The equalization re-estimates released in detail by Minister Martin yesterday confirmed that additional equalization payments will be forthcoming, predominantly due to the strength of the Ontario economy," said Minister Aylward. "This government was aware that the province would be receiving additional equalization revisions this year as a result of revisions to economic data nationally. Our budgetary process has been going forward for some time based on the knowledge that this money would be confirmed by the federal government.

"The $100 million we have discussed using for new initiatives and public sector wage increases includes this equalization allocation. I have already indicated that approximately $50 million of this is available for wage increases; equivalent to a three per cent increase per year. Over three years, public sector employees would receive a nine per cent increase in wages."

The minister clarified that the $22 million in equalization adjustments was already built into the current year�s revenue for the province. A further $36 million, of which the province was also aware, relates to the one-year removal of the ceiling on equalization payments to which the federal government agreed in September 2000. This has already been factored into next year�s preliminary revenue forecast. The total benefit to Newfoundland and Labrador from additional equalization payments this year and next will be $58 million.

"Newfoundland and Labrador will benefit from the removal of the equalization ceiling for the 1999-2000 year. However, we will continue to press for longer-term changes to the equalization program, including the permanent removal of the ceiling. These changes would have a substantial impact on the level of payments to this province from Ottawa. The equalization program is critical to our economic development, and we will continue to advocate a program which is responsive to the needs of this province."

Media contact: Paula Dyke, Communications, (709) 729-0329.

2001 02 28                             12:40 p.m.


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