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NLIS 6 May 3, 2002 (Finance) The following statement was issued today by Joan Marie Aylward, minister of Finance. 2002 Loan Bill I feel that it is necessary to clear up any confusion or misunderstanding relating to the 2002 Loan Bill. The Loan Bill 2002 will provide the legislative authority for new borrowings by government, and is a regular item in the financial administration of the province. The Loan Bill authorizes borrowings to meet the shortfall between government revenues and expenditures, in addition to the amounts required for debt retirement, including special payments to reduce our unfunded pension liabilities. The statutory limit proposed for the 2002 Loan Bill is $200 million. This amount is in addition to amounts required for debt retirement, $147 million, and retirement of pension liabilities, $149 million, as outlined in Statement I of the 2002 Budget Estimates. The purpose of setting the statutory amount above the requirements already identified in the Budget is to provide the ability for the province to take advantage of the existing optimal new issue size and to avoid arranging loans in the capital markets for small or odd amounts. As well, it allows for pre-borrowing for the subsequent fiscal year in the event that market conditions are favourable. Government needs the ability to borrow in the capital markets when market conditions, like interest rates, term to maturity and liquidity are favorable. When appropriate, the province has often borrowed in advance of its cash requirements. The tabling of the 2002 Loan Bill is consistent with past practices where borrowing limits have been approved by the House of Assembly prior to borrowing in the capital markets. In 1998, the Loan Act was $200 million; in 1999, $250 million; and the last Loan Act, passed in 2000, was also $200 million. It is also important to note that any unused borrowing authority under each previous Loan Act expires upon the passage of a new Act. This new Loan Bill is necessary so that government can commence a borrowing program to meet the cash requirements outlined in the 2002-2003 Budget.
HISTORY OF LOAN ACTS
2002 05 03 5:05 p.m. |
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