Executive Council
Finance
March 26, 2009

Budget 2009: Building on Our Strong Foundation

The Williams Government today unveiled Budget 2009: Building on Our Strong Foundation, a financial plan that includes strategic investments to strengthen the province’s economy, while protecting and enhancing important social programs. Budget 2009 provides significant economic stimulus, benefiting the people and the communities of Newfoundland and Labrador, and includes targeted expenditures in economic development, infrastructure, health, education, poverty reduction, and the environment.

"The budget our government has presented today will guide Newfoundland and Labrador through this global economic downturn by providing substantial economic stimulus while protecting important social programs," said the Honourable Danny Williams, Premier of Newfoundland and Labrador. "Our steadfast prudent fiscal management since we formed government has put us in as favourable a position as possible to deal with the impacts of the global economic challenges. The investments we have made in recent years, including using four consecutive surpluses to reduce debt and cut taxes for residents and businesses, have allowed us to build a strong foundation and have put us in a position of strength. We will continue to build on this strong foundation and stay the course with our vision for a prosperous and self-reliant Newfoundland and Labrador while providing important stimulus spending on infrastructure and planning for major projects such as Hebron, White Rose Expansion and a new hydromet facility."

The Williams Government is forecasting a revised surplus of $1.3 billion for 2008-09; when a one-time adjustment for the 2005 Atlantic Accord is included the total surplus is $2.4 billion. The province forecasts that it will incur a deficit of approximately $750 million in 2009-10. More than half of the deficit, $414 million, can be attributed to the unilateral action of the Harper government to eliminate benefits this year under the 1985 Atlantic Accord. The balance is primarily attributed to a decline in the value of the province’s pooled pension fund. Were it not for the actions of the federal government and pension fund value declines, the Provincial Government would be forecasting a surplus.

"Our government will run a deficit for the current fiscal year rather than cut spending for important programs and services," said the Honourable Jerome Kennedy, Minister of Finance and President of Treasury Board. "Despite the actions of the Federal Government, over the last four years we have reduced net debt from almost $12 billion to $7.9 billion and our net debt per capita has been reduced from $23,000 to $15,500. Our commitment to prudent fiscal management and our focus on debt reduction has built a strong foundation and has provided us with fiscal flexibility during the economic downturn. We maintain our commitment to prudent fiscal management and are projecting a surplus in 2011-12."

Among the highlights for Budget 2009:

  • Budget 2009 investments for economic stimulus and development will top $900 million, which includes the Williams Government’s substantial investment in infrastructure. The infrastructure investment represents a 50 per cent increase over last year and includes projects such as roads, hospitals, schools and long-term care facilities. The investment will result in the creation of 5,400 jobs in the province this year. Further investments include:
  • Approximately $103 million for municipal infrastructure;
  • More than $277 million for transportation and infrastructure, including a $70 million Provincial Roads Program;
  • Approximately $156 million for education facilities;
  • $167 million for health care facilities and equipment;
  • More than $87 million in business development programs;
  • Approximately $3.5 million under the Fishing Industry Renewal Strategy to ensure continued development of the province’s fishing industry; and,
  • $3.4 million to support the construction of an aquaculture facility in St. Albans.
  • Additional economic stimulus will be provided by Nalcor Energy through a $228 million equity investment to take full advantage of potential opportunities, including investments in projects such as Hebron, White Rose Expansion and the Lower Churchill development;
  • An investment of $81 million to strengthen the province’s research and development capacity and encourage innovation, economic growth, and enhance local development of new products and services that can result in employment opportunities and successful businesses;
  • The implementation of new tax reductions for low-income earners, resulting in more money directly back in their pockets;
  • A record $2.6 billion for health and community services, including investments to strengthen the health care system based on the recommendations of the Cameron Inquiry on Hormone Receptor Testing and the Task Force on Adverse Health Events;
  • To build on its strong foundation of solid investments in health care, the Provincial Government will invest $8 million this year to address growth in the home support program; $16.5 million, with an annualized investment of $24.6 million, to support an increase to the home support hourly subsidy rate by $1.71 per hour by January 1, 2010; $1.5 million will be invested to increase the personal care home subsidy amount from $1,607 a month to $1,644 a month, effective April 1; and, as recently announced, an investment of $1.3 million will be made in 2009-10, with an annualized investment of $2.4 million starting in 2010-11 to make substantial increases to foster care rates in the province;
  • The creation of a new Provincial Government department responsible for Child, Youth and Family Services, which will further enhance and strengthen services for children, youth and families in Newfoundland and Labrador;
  • An additional $130.9 million will be invested in education this year to bring the total budget to $1.3 billion, which includes $5 million to eliminate the interest on the provincial portion on student loans, support for debt reduction initiatives for current post-secondary students and those now in repayment, and infrastructure needs in both the K-12 and post-secondary systems;
  • $132.2 million to target poverty reduction and to alleviate the impacts of poverty in Newfoundland and Labrador;
  • An investment in excess of $135 million in Labrador through the Northern Strategic Plan;
  • An investment of over $40 million for Grand Falls-Windsor and region, including significant infrastructure and planning for a new a residential treatment centre for youth to be built in Grand Falls-Windsor, as part of the Provincial Government’s infrastructure investment, and the administration of both the Home Heating Rebate Program and Parental Benefits Program to be located in the region; and,
  • Investments to protect the environment, including $10.4 million for the remediation of contaminated sites in the province and $1.55 million to provide assistance for homeowners for energy audits and retrofits to make their homes more efficient.
  • "These investments reflect our government’s commitment to the vital programs and services the people of our province depend on," said Premier Williams. "It is important that we maintain a steady course for prosperity and self-reliance, even during challenging financial times. We will build on our success in recent years as we look with optimism to a brighter, more prosperous future."

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    Photo #1: Jerome P. Kennedy – Minister of Finance and President of Treasury Board

    Media contacts:

    Elizabeth Matthews
    Director of Communications
    Office of the Premier
    709-729-3960
    elizabethmatthews@gov.nl.ca
    Roger Scaplen
    Press Secretary
    Office of the Premier
    709-729-4304, 727-0991
    rogerscaplen@gov.nl.ca
    Tansy Mundon
    Director of Communications
    Department of Finance
    709-729-6830, 685-2646
    tansymundon@gov.nl.ca

    2003 03 26                                                     2:05 p.m.


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