Budget 2013: A Sound Plan, A Secure Future

Building on the strength of the economy and government’s continued commitment to sound fiscal management, the Dunderdale Government today released Budget 2013: A Sound Plan, A Secure Future. Budget 2013 outlines year one of Securing the Future: A 10-Year Sustainability Plan for Newfoundland and Labrador, announced today.

The plan sets out specific goals to ensure continued sound fiscal management over the long term, including the elimination of deficits and a return to a surplus budget in three years. The Provincial Government will continue to make strategic investments to grow and diversify the economy and to invest in vital programs and services that are important to the people of the province.

“At a time when other jurisdictions in Canada and around the world are struggling, the Newfoundland and Labrador economy remains strong,” said the Honourable Jerome Kennedy, Minister of Finance and President of Treasury Board. “However, we’re not immune to the global economic downturn. That means tough decisions are required – decisions that are not taken lightly. We are adjusting the size of the workforce to align with overall spending. But, we are protecting the priorities of Newfoundlanders and Labradorians, such as education and health services. We are not raising personal income and corporate income taxes. We will not jeopardize the progress we have made as a province. With responsible decisions today, we will ensure a prosperous and secure future for generations.”

The deficit for 2012-13, projected at mid-year to be $725.8 million, is now revised at $430.9 million. The projected deficit for 2013-14 is $563.8 million, down from the $1.6 billion previously projected based on mid-year assumptions. The decrease in the projected deficit is the combined result of $301.4 million in net expenditure reductions and improved revenue projections of $695.8 million. As a result of the revised projections, the Provincial Government will not borrow again this year for operational purposes, a trend that has continued since 2004.

Increases to various fees, the implementation of new fees and an increase in tobacco tax will result in increased revenue of approximately $19.3 million. There are no other tax increases in Budget 2013.

The Provincial Government will continue to invest strategically in areas that matter most to residents, communities and businesses, balanced with the objective of fiscal sustainability. This includes $2.9 billion for the health and well-being of families, $1.3 billion for K-12 and post-secondary education, and $230 million to support communities and residents.

The province is expected to have a robust economy again in 2013, with increased exports and investment and consumption more than offsetting the reduction in government spending. There has been significant growth in the economy since 2003. The Provincial Government’s investment in strategic areas such as infrastructure helped to stimulate the economy and increase employment opportunities during the global recession. As a result of responsible fiscal management by the Provincial Government, the economy remains strong compared to other provinces in the country.

“We are fortunate that our economy remains strong and, for that reason, now is the appropriate time to bring our spending in line with long-term revenue forecasts,” said Minister Kennedy. “We continue to demonstrate our commitment to strong fiscal management and have reduced spending appropriately this year, while keeping the competitive tax base that our residents and businesses have enjoyed over the last number of years. Our sustainability plan for the coming years will build on the progress we have made and will protect the financial position of our province now and in the future.”

For further details see the Backgrounders: Overview of Provincial Government’s Fiscal Plan; Workforce Adjustments; and Increases to Fees and Tobacco Tax

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• Backgrounder - Overview of Provincial Government’s Fiscal Plan
• Backgrounder - Increases to Fees and Tobacco Tax
• Backgrounder - Workforce Adjustment – Core Public Service

Media contact:
Tansy Mundon
Director of Communications
Department of Finance
709-729-6830; 693-1865
tansymundon@gov.nl.ca 

2013 03 26             2:40 p.m.