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Budget 2006 - The Right Choices : Momentum for Growth and Prosperity

NLIS 8
March 30, 2006
(Human Resources, Labour and Employment)
(Health and Community Services)
(Education)
 

The Right Choices: Reducing Poverty; Increasing Self Reliance

The Williams government is removing barriers to employment and providing assistance to those who need it most through a sweeping investment in initiatives designed to combat poverty, announced Paul Shelley, Minister of Human Resources, Labour and Employment, and the lead minister for government’s poverty reduction strategy.

Budget 2006 outlines government’s integrated approach to poverty reduction, unveiling investments of over $30.5 million in 2006-07 and $62 million annually to support an expanded eligibility for the prescription drug program, the elimination of school fees, increases to income support programs, and enhanced Adult Basic Education (ABE) offerings. This initial phase of the poverty reduction strategy is a strong basis for meeting government’s pledge to significantly reduce poverty in Newfoundland and Labrador.

"These investments will help people with low incomes move ahead and break the cycle of poverty. This initial phase to reducing poverty is not just about improving the quality of life of people who struggle to afford basic necessities. Poverty reduction is also about ensuring a strong and prosperous future for everyone," said Minister Shelley. "Departments throughout government are working together to deliver programs and services towards reducing poverty. This integrated approach will help achieve our goal of everyone participating in our province’s social and economic benefits."

Expanded Drug Coverage
To remove one of the biggest financial barriers to employment for individuals who work for low wages, government will invest $8.3 million this year and $32.8 million annually to expand the eligibility of the current Newfoundland and Labrador Prescription Drug Program (NLPDP) to include more low income families and individuals. The eligibility threshold for the program will extend to families with children with annual household incomes up to $30,000, to couples earning up to $21,000, and to singles earning up to $19,000 a year. The program will also include a co-payment ranging from 20 to 70 per cent. This marks the first expansion of the program since 1980 and will provide prescription drug coverage to approximately 97,000 additional people at co-pay rates between 20 and 70 per cent.

Eliminating School Fees
Budget 2006 allocates $6.3 million to increase instructional grants to school boards and to cover prescribed workbooks and other consumable materials currently charged to parents. With this investment, government will reduce the burden of education-related costs to parents and eliminate school fees. This includes:

  • School materials, such as student agendas, locks (including locker rental), school calendars, photocopying, handbooks, accident insurance, student IDs, administrative/library software, and internet/e-mail access;
  • All consumable course materials associated with the prescribed curriculum, such as workbooks, photocopied resources, exam stationery, computer paper, CDs, disks, magazine/newspaper subscriptions, scrapbooks, along with supplies associated with classroom-based work in art, technology, language arts, science, home economics, and industrial arts; and,
  • Specific items required by all students to participate fully in classroom instruction, such as recorders required for elementary music curriculum, and "preferred" resources chosen by individual teachers to deliver the prescribed curriculum.
  • "Eliminating school fees will especially assist low-income families and keep money in the hands of parents who need it most," said Joan Burke, Minister of Education. "We are extremely pleased to be in a position to eliminate this burden on parents, which has become such a contentious issue over the past several years as education-related costs have increased. This investment will ensure that parents will no longer have to pay for school-provided items that students need in order to participate fully in classroom instruction."

    Increasing Income Supports
    Budget 2006 increases income support rates by five per cent (effective July 1), beginning with $5.6 million this year and $7.4 million annually. Starting in 2007, an additional $3 million (estimated) annually will further increase these rates by indexing them, which will help offset future increases in the cost of living.

    There will also be an additional $2.1 million this year and $2.78 million annually to enable staff to respond on a case-by-case basis to income support clients who have unique accommodation needs and require additional assistance.

    Parents who look after children with physical and intellectual disabilities require additional supports and services. To help more low-income families offset some of the associated cost, a $2.25 million increase to the Special Child Welfare Allowance this year will remove RRSPs and RESPs from the financial assessment process, making the program more accessible to more families who need it.

    "Since forming the government, we have increased the minimum wage, reduced the tax paid by low-income families, and made reforms to encourage skills development and participation in the workforce," explained Minister Shelley. "Budget 2006 builds on these initiatives with major investments in a broad range of programs and services will help low-income workers, youth-at-risk, and families with low incomes."

    Budget 2006 also dedicates more than $700,000 this year and $1.9 million annually towards more legal and counselling support services for people with low incomes, with a focus on the following areas:

  • $250,000 to improve access to civil legal aid;
  • Expand Unified Family Court services to provide more family law resources throughout the province;
  • $80,000 to increase the annual grants for the province’s eight women’s centres (Corner Brook, Gander, Grand Falls-Windsor, Happy Valley-Goose Bay, Labrador City, Port aux Basques, St. John’s, Stephenville) so that clients can have improved access to information, support and education services; and,
  • $23,500 for offender employment skills training at correctional facilities across the province.
  • Encouraging Self-Reliance
    Recognizing higher learning is critical in achieving self-sufficiency, Budget 2006 provides $1.45 million to improve the education levels and literacy skills of adults. This will expand Adult Basic Education (ABE) programming, particularly Level I (Literacy), at College of the North Atlantic campuses, along with the provision of post-secondary awards and grants. This complements the new Futures in Skilled Trades and Technology career path for students in grades 10-12.

    A further $500,000 in new funding will create an incentive for Newfoundland and Labrador Housing Corporation (NLHC) tenants to remain in school. NLHC tenants will now qualify for a monthly $25 rental rebate for every adult studying full-time at a post-secondary institution and for every dependent in high school Levels 2-4.

    Program funding will also assist low-income earners who are entering the workforce. This includes a new Job Start payment of $250 per family or $125 per single for Income Support clients who start work to assist in the transition while they wait for their first pay cheque. Budget 2006 allocates $430,000 this year and $570,000 annually towards these one-time payments. As well, NLHC tenants with employment income will now qualify for a rent reduction of approximately $50 per month, at a cost of $750,000 annually.

    Supporting Healthy Living
    Budget 2006 promotes healthy living through recreation and good nutrition. This includes:

  • An increase of $100,000 for the air food lift subsidy program that is paid to grocery retailers in coastal Labrador to offset the cost of flying perishable foods and helps residents purchase nutritious food at a more reasonable price;
  • $250,000 for the province’s partnership with the Canadian Tire Foundation for Families on the Jumpstart program, which supports children in low income families participating in sports and recreational activities; and,
  • $250,000 towards the implementation of school food guidelines in support of the Provincial Wellness Plan.
  • Province-wide consultations on poverty reduction were conducted in mid-2005 and a fully developed poverty reduction strategy will be released in late spring 2006.

    Media contact:
    Alex Marland, Human Resources, Labour and Employment, (709) 729-4062, 690-6047
    Tansy Mundon, Health and Community Services, (709) 729-1377, 685-1741
    Jacquelyn Howard, Education, (709) 729-0048, 689-2624

    BACKGROUNDER
    Reducing Poverty and Increasing Self-Reliance

    Poverty Reduction Strategy
    Newfoundland and Labrador has one of the highest levels of poverty in Canada, with approximately 66,000 individuals in 33,000 families living in poverty in the province. Based on broad consultations and research, a comprehensive package of initiatives has been developed which focuses on early intervention and prevention to break the cycle of poverty.

    Budget 2006 furthers government’s poverty reduction strategy with investments of $30.5 million in 2006-07 and $62 million annually to support initiatives such as an expanded eligibility of the prescription drug program, the elimination of school fees, increases to income support programs, and more Adult Basic Education (ABE) offerings. Budget 2006 provides more money directly to all low income earners in the province, including the approximately 45,700 income support recipients. A fully-developed poverty reduction strategy will be released in late spring 2006, including measurable targets, initiatives for future years, and a plan for areas requiring further research, development or community involvement.

    Expanded Eligibility of the Prescription Drug Program
    There are residents of Newfoundland and Labrador who are faced with prescription drug costs they cannot afford, resulting in both financial hardship and negative implications for their health. Moreover, the current loss of prescription drug benefits is a major barrier to employment for many income support clients.

    This expansion will provide prescription drug coverage, with a contribution as low as 20 per cent, for approximately 37,000 individuals, and gradually increasing for an additional 60,000 individuals, all of whom currently do not have access to public or private drug coverage in Newfoundland and Labrador. There will be no changes to the program for client groups who are currently eligible (e.g., income support clients and senior citizens who are eligible for the Guaranteed Income Supplement).

    Singles

    Families – with No Children

    Families - with Children

    Family Income

    Amount ($)

    Co-Pay Amount

    Family Income

    Amount ($)

    Co-Pay Amount

    Family Income

    Amount ($)

    Co-Pay Amount

    Under 13,000

    20.0%

    Under 15,000

    20.0%

    Under 21,000

    20.0%

    14,000

    28.3%

    16,000

    28.3%

    22,000

    25.6%

    15,000

    36.7%

    17,000

    36.7%

    23,000

    31.1%

    16,000

    45.0%

    18,000

    45.0%

    24,000

    36.7%

    17,000

    53.3%

    19,000

    53.3%

    25,000

    42.2%

    18,000

    61.7%

    20,000

    61.7%

    26,000

    47.8%

    19,000

    70.0%

    21,000

    70.0%

    27,000

    53.3%

           

    28,000

    58.9%

           

    29,000

    64.4%

           

    30,000

    70.0%

    The program design includes a 20 per cent co-pay for individuals whose family net income is below $13,000 (single persons), $15,000 (couples without children) and $21,000 (single or couple parents with children). Phase out of the program, with the clients co-pay increasing up to 70 per cent, covers single persons from $13,001 to $19,000; couples from $15,001 to $21,000; and families from $21,001 to $30,000. It is expected that implementation of this expanded program will occur early in 2007.

    Elimination of School Fees – Overview
    School fees, as defined by the Schools Act, 1997, are costs for items purchased by a school or school board and which are provided to students for use in the school and classroom.

    Currently, boards get an instructional grant of between $7,500 and $9,500 per school (depending on enrolment) and $80 per pupil. This initiative increases the $80 amount to $150 per pupil and provides an additional investment of $1M for essential workbooks, prescribed by the Department of Education, to deliver the K-12 mathematics, French and music curriculum, as well as novels required at the K-8 level.

    Elimination of School Fees – Items covered
    Essentially, fees charged for "consumable" items currently purchased by schools/school boards and charged back to parents will be covered. These include, but are not limited to:

  • Fees for school materials such as student agendas, locks (including locker rental), school calendars, photocopying, handbooks, accident insurance, student IDs, administrative/library software, Internet/e-mail access;
  • Fees for course materials associated with the prescribed curriculum such as workbooks, photocopied resources, exam paper, computer paper, CDs, disks, magazine/newspaper subscriptions, scrapbooks, along with supplies associated with classroom-based work in art, technology, language arts, science, home economics, industrial arts;
  • Fees for participation in band and choir; and
  • Fees for specific items required by all students to participate fully in classroom instruction (e.g., recorders required for music curriculum; novels at K-8).
  • Elimination of School Fees – Items Not Covered

  • Basic schools supplies parents have always been expected to provide their children. Some examples are pencils, pens, paper, exercise books, folders, markers, crayons, glue, scissors, geometry sets, calculators, book bags, pencil cases, gym clothing;
  • Textbooks for Grade 9 to Level III (prescribed workbooks will be covered);
  • Costs associated with enrichment programs and materials required for local courses which are not prescribed by the Department of Education (e.g., local courses in aquaculture, musical theatre, web design, marine technology, or workplace health and safety);
  • Travel associated with co-curricular/extra-curricular activities, field trips, pizza days, book fairs, etc. (The nature and frequency of these activities is determined at the school level. School boards will be asked to establish an approval process for any fees associated with these activities);
  • School clothing, graduation ceremonies, school rings, school photos, etc., which are considered optional items.
  • Rental of musical instruments.
  • Voluntary fundraising activities, approved by the school council (as required by current legislation), for a specific purpose - such as student travel, sports uniforms, playground equipment, etc.
  • 2006 03 30                                                2:20 p.m.


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