Finance
March 16, 2007

Canadian Federation of Independent Business Missing the Point

The Honourable Tom Marshall, Minister of Finance and President of Treasury Board, said today the Canadian Federation of Independent Business (CFIB) has missed the point.

The minister was responding to an open letter issued by the CFIB today criticizing government�s decision to contribute to the public service pension plans. "What the CFIB fails to understand is government is not taking on a new liability," said Minister Marshall. "The debt remains the same; we are simply making a strategic and very prudent financial decision that will replace unfunded pension liabilities with cheaper debt, addressing longstanding concerns around the unfunded pension liability and bringing stability to this plan for our public sector employees."

Minister Marshall said, given the province�s current borrowing rate of approximately 4.5 per cent, any funds borrowed to reduce the unfunded liability of the Public Service Pension Plan, which grows with interest at 7.5 per cent annually, will save the province approximately $27 million annually. "If you add this to the $150 million annually we are saving in interest charges from the $2 billion Atlantic Accord monies negotiated by Premier Williams, we are saving the taxpayer approximately $177 million, which in turn can be reinvested in economic development, health care, education and poverty reduction," maintained the minister.

"This action taken by government will reduce the burden on the tax payer; it illustrates sound debt management practices and is yet another measure taken by the Williams government to put this province on a solid financial footing."

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Media contact:
Bill Hickey
Director of Communications
Department of Finance
709-729-6830, 691-6390
billyhickey@gov.nl.ca

2007 03 16                                                3:20 p.m.

 


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