Government Makes Responsible Choices
for Long-term Fiscal and Service Health

Gaining control of the province�s fiscal situation is critical to government�s strategy for success. Restoring the integrity of the province�s finances responsibly and progressively over time will place Newfoundland and Labrador in a more stable fiscal position, and enable the province to be more self-sufficient.

Since taking office, this government has reviewed current and planned programs and projects in light of the province�s current fiscal circumstances.

"For too long, previous administrations responded to challenges with short-term solutions. Huge debts were amassed, while programs and projects continued to be announced with little strategic consideration," said Finance Minister Loyola Sullivan. "This government is thinking for the long-term. We are defining where we want to be and setting the province on a course for economic and social renewal through strategic planning of infrastructure and programming."

Therefore, government is now making difficult, but necessary, choices about how to use limited public funds to achieve maximum value and benefit for Newfoundlanders and Labradorians over the long term. Responsible budget decisions for the 2004-05 fiscal year entail some facility closures, as well as cancellations and deferrals of planned projects and programs. Some of these decisions include the following:

Closures
The Salmonier Correctional Institution, one of the province�s eight adult secure custody facilities, will be decommissioned due to its age and the cost of operating the facility. Current inmates will be relocated to other provincial facilities. A 10-bed unit at the Whitbourne Youth Centre will close, based on a steady decline in the number of residents owing to the trend toward community-based correction alternatives.

Another budget decision driven by a modernization of program delivery that allows the most efficient and effective use of our resources is the consolidation of Human Resources, Labour and Employment (HRLE) offices throughout the province. Improvements in transportation, communication and other technologies have enabled a more efficient income and employment support service delivery network. Service delivery sites will now be located in key centres to optimize opportunities for partnering with employers, community agencies and other levels of government. Outreach and other strategies will ensure there is efficient and effective service to clients in remote communities.

Cancellations
"In assessing the province�s capital needs, government has had to make difficult choices in order to ensure scarce funds are applied where they are most needed and can do the most good. Government has determined that some programs and planned capital projects neither meet their policy objectives, nor constitute a strategic investment on behalf of Newfoundlanders and Labradorians," Minister Sullivan said.

With capital needs for provincial schools estimated at approximately $50 million, after careful consideration, government has decided not to proceed with construction of a school in L�Anse au Loup. The West Coast Exhibition Centre in Corner Brook has also been cancelled.

Also, while government acknowledges the need to invest in health care facilities and equipment, the province does not have the capital funding for all competing construction projects. The need for cancer services in Grand Falls-Windsor, for example, must be met within existing resources. Government will work with the Central West Health Corporation to identify other space options to address the needs of Grand Falls-Windsor cancer patients. The James Paton Memorial Hospital redevelopment in Gander will not proceed as planned. The Grand Bank Health Centre will not proceed; there are two other facilities in close proximity that have sufficient capacity to meet the health needs of the area. Government intends to set its funding priorities in the context of a long-term provincial capital plan for health facilities.

The Provincial Student Loan tax credit, initiated in 2003 by the previous administration, will be discontinued as of the 2004 taxation year. With an average yearly benefit of $105 to individuals in repayment of provincial student loans, this program does not meet its policy objective of encouraging post-secondary students and graduates to work and remain in the province. Savings of $3 million to be achieved by 2005-06 will be re-invested in priority areas where greater benefit can be realized.

Government is also cancelling the We�re Doing It Right Here advertising campaign.

Deferrals
"Additionally, a number of capital projects have been deferred, given current fiscal challenges," said the minister. "Facility and equipment needs will be addressed in the longer-term through a provincial infrastructure plan."

Some health and education projects have been deferred, in view of competing construction, repair and equipment needs and availability of adequate alternatives. Public funding will not be made available for a CT scanner in Burin at this time, since an expert committee of medical professionals recommended one CT Scanner for the Peninsulas region which is located in Clarenville and has shown sufficient capacity to serve the region through its very short wait times. Plans for the long-term care facility in Clarenville has also been deferred.

Due to a sharp increase in estimated cost, plans to redevelop Herdman Collegiate in Corner Brook have been deferred pending further review of the proposed design and consultation with the school board to reach an affordable compromise. The planned extension to Leary�s Brook Junior High in St. John�s and Mobile Central High School in Mobile are also postponed. Also deferred is the construction of the Mealy Mountain High School Auditorium in Happy Valley-Goose Bay.

While construction on The Rooms in St. John�s will be completed as planned in the coming weeks, interior display completion and opening of the facility will be delayed until 2005. The Rooms Corporation will continue to operate and will strive to offer and make accessible as many programs and services as possible to the public within existing facilities. The Provincial Archives of Newfoundland and Labrador and the Provincial Museum of Newfoundland and Labrador will continue to offer services to the public. The Art Gallery of Newfoundland and Labrador (AGNL) will remain closed for the next year in preparation for the move to The Rooms in 2005.

"These decisions have not been easy," said Minister Sullivan, "but they are responsible, and they are necessary if government is to gain control of the fiscal situation, grow our economy and create a smart, socially-responsible, successful Newfoundland and Labrador."

Media contact:
          Diane Keough, Finance (709) 729-6830
          Lynn Salter, Education (709) 729-0048
          Carolyn Chaplin, Health and Community Services (709) 729-1377
          Tansy Mundon, Tourism, Culture and Recreation (709) 729-0928

2004 03 30                                         3:20 p.m.