April 30, 2015
Balancing Choices for a Promising Future
The Provincial Government is addressing the province's fiscal challenge by implementing balanced actions that recognize the current situation while, at the same time, continuing to make prudent investments in key areas that are important to Newfoundlanders and Labradorians. With a fair, measured approach to protecting the significant progress Newfoundland and Labrador has made over the last decade, Budget 2015 outlines a plan to return the province to surplus in 2020-21.
"The decline in oil prices has placed a strain on provincial
revenues and we need to adjust our course to meet this new reality head-on.
We are reducing expenditures in a responsible manner to ensure we maintain
the stability of our economy. The situation we find ourselves in is a
temporary one caused by the global downturn in oil prices. Prudent fiscal
management demands gradual change to avoid harming the province's economy.
The balanced approach that we are taking recognizes the need to adjust
Provincial Government spending while protecting core services for our
residents. We are creating a path that will lead Newfoundland and Labrador
to a great future that harnesses our economic prospects."
- The Honourable Ross Wiseman, Minister of Finance and President of Treasury Board
Through Budget 2015, the Provincial Government is allocating a total of approximately $8.1 billion. The deficit for 2014-15, projected at mid-year to be $916.1 million, is now revised to $924.1 million - a result of declining oil prices globally. The budgeted deficit for 2015-16 is $1.093 billion.
Budget 2015 continues significant investments in vital programs and services, including:
- Nearly $3 billion for the health and well-being of families;
- $1.4 billion for K-12 and post-secondary education;
- A new Community Sustainability Partnership which provides new sources of funding for communities; and
- More than $660 million for infrastructure projects that will support economic growth and job creation.
With a sustainable fiscal plan, the Provincial Government expects to
return to surplus in 2020-21. This will be achieved through a series of
measures, including an attrition management plan, necessary expenditure
reductions and revenue generation through increasing some taxes and fees.
The increases to various fees, changes associated with the HST and
progressive changes to the personal income tax structure will result in
increased revenue of just over $122 million for 2015-16, annualizing to
approximately $254 million in future years.
To further address the economic pressures facing this province, the Provincial Government has taken a leadership role in finding a solution to the liability associated with pension benefits that would have severely impacted the province's net debt. Over the past year, the Provincial Government has worked with public sector unions to formalize agreements to protect the defined benefit plans for approximately 97 per cent of the plan members, including retirees. Work will continue to address the remaining unfunded pension liability this year.
"Our government has tremendous confidence in the future prospects
of Newfoundland and Labrador. We understand the potential that exists here
and we recognize the tremendous opportunities we must seize. We are
leveraging our significant natural resources as well as supporting the
strengths of an innovative business community that is competing in global
markets. We have come a very long way and we have a great story of progress
upon which to build. But we have to manage our spending growth and find new,
innovative ways to transform how we deliver services in this province. We
must move forward in a manner that protects that growth and allows us to
remain a leader."
- Minister Wiseman
After 10 years of significant growth, economic conditions in Newfoundland and Labrador have slowed due to weaker commodity markets but are expected to rebound in 2019. Nonetheless, major economic indicators continue to show strong results when compared to 2005 and this province continues to boast the highest income levels in its history and comparatively high employment levels. The tremendous potential of Newfoundland and Labrador's offshore oil resources also bodes well for the economic future of the province.
- Budget 2015 outlines a plan to return this province to surplus, while at the same time continuing to make prudent investments in key areas.
- Through Budget 2015, the Provincial Government is allocating a total of approximately $8.1 billion.
- The deficit for 2014-15, projected at mid-year to be $916.1 million, is now revised to $924.1 million - a result of declining oil prices globally. The budgeted deficit for 2015-16 is $1.093 billion.
- The Provincial Government expects to return to surplus in 2020-21.
- Budget 2015 includes nearly $3 billion for the health and well-being of families, $1.4 billion for K-12 and post-secondary education, and more than $660 million for infrastructure projects that will support economic growth and job creation.
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Director of Communications
Department of Finance
2015 04 30 2:10 p.m.