Minister refutes Opposition comments

Minister of Finance and President of Treasury Board, Loyola Sullivan, today said Opposition Leader Roger Grimes is continuing to mislead the public with comments on debt servicing.

"The debt servicing cost of the province is indeed 25 cents of every dollar," said Minister Sullivan. "This number is the province�s total debt commitment which includes interest on unfunded liabilities. Furthermore, debt servicing costs must be based on the province�s revenues, which represents our ability to pay, not simply on expenditures."

Minister Sullivan explained there are two components to debt servicing. The cash component is the interest paid annually on the direct borrowings of the province. The other component is the interest accruing on all other government liabilities, the most significant of which is the unfunded pension liability.

"The leader of the Opposition is continuing to mislead the public by using figures based only on cash budgeting," said Minister Sullivan. "It would be irresponsible of government to report only the province�s finances on a cash basis. Both the Auditor General and the independent external review have stated that the true picture of the province�s finances is based on an accrual method.

"Government can no longer ignore the unfunded pension liability. The financial planning of the province must include the necessary steps to address this significant liability. If we do not, we are only continuing to pass the burden on to future generations, and this government will not be that irresponsible," concluded Minister Sullivan.

Media contact: Diane Keough, Communications, (709) 729-6830

2004 01 30                                        4:05 p.m.