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Budget 2006 - The Right Choices : Momentum for Growth and Prosperity
March 30, 2006
(Executive Council)


The Right Choices: NL � The Place to Do Business
Budget 2006 Opens the Door to Business, Industry Development

Newfoundland and Labrador is quickly gaining a reputation as a province on the move, as there continues to be growing economic momentum and a renewed optimism for the future. To build on this, the Williams government is putting the necessary supports in place to create an environment that fosters business growth and sends a message that Newfoundland and Labrador is the place to do business. Premier Danny Williams announced today that government is committing more than $60 million to support business and industry development activities.

"Modernizing infrastructure, demonstrating our competitive advantage and supporting business development are ways this administration is establishing Newfoundland and Labrador as an ideal location in which to conduct business," said Premier Danny Williams, who is also Minister of Business. "In a globally-competitive environment, it is critical that we give local businesses the tools to succeed, while at the same time promoting Newfoundland and Labrador to outside investors. Introducing new businesses and industries to our province, while enhancing and strengthening existing businesses, translate into an infusion of new ideas, greater prospects and increased economic possibilities."

Cutting Red Tape
As a result of the initial phase of the Red Tape Reduction Initiative to reduce undue burdens on businesses and individuals, government will put nearly $1.5 million back into the hands of consumers and businesses with the reduction or elimination of 34 fees. Among the fees eliminated are the brewer�s agent licence fee; the food premises licence fee; the quarry permit application fee; and the $100 fee charged for medical re-assessment road tests. Government�s Red Tape Reduction initiative will continue to streamline the administrative and regulatory requirements often imposed on businesses and individuals.

Support for Business
Government has allocated $8 million for the Department of Innovation, Trade and Rural Development�s Small and Medium-sized Enterprise (SME) Fund to support business development throughout the province. Today�s investment builds on the $10 million budgeted last year when the fund was established. By providing loans and investments to enterprises in strategic growth sectors, this $18 million revolving fund helps businesses create employment and build the economy.

The department�s Regional/Sectoral Diversification Fund (RSDF) receives $5 million in Budget 2006, in addition to carry-over funding of $1.8 million, for the continuation of the program. The RSDF provides funding to economic development organizations for work that complements and enhances the growth of SMEs. This fund is critical to ensuring that necessary infrastructure is in place to support the growth and development of businesses in all regions of the province.

"Over the past two years, this administration has put programs and infrastructure in place to help our businesses excel regionally, provincially and beyond. The programs and funding allocated in Budget 2006 further those efforts," said Kathy Dunderdale, Minister of Innovation, Trade and Rural Development and Minister responsible for the Rural Secretariat. "Supports to local businesses, diversifying the provincial economy and attracting new businesses to the province are crucial steps in securing Newfoundland and Labrador�s economic future."

To assist entrepreneurs in pursuit of new business ideas and markets, government is continuing its $1 million program for Business and Market Development (BMDP).

Budget 2006 allocates an additional $200,000 to the Ireland Business Partnerships (IBP), increasing its annual budget to $500,000. The increase will allow the IBP to develop and foster a strong trade initiative with Ireland, to work on joint projects in the ocean and marine technology sector and to collaborate on the emerging oil and gas sector in Ireland. Growing international business connections and partnerships through the IBP give Newfoundland and Labrador a competitive edge, and promote the province as a viable and profitable place to do business.

Developing our Mineral Industry
Government will position the mineral industry for strong growth through a targeted investment strategy to attract new business into the province�s minerals sector. A $3 million investment this year, as recently announced, will enhance the Mineral Incentive Program (MIP) and expand regional geological services.

Budget 2006 commits $2.5 million for the Mineral Incentive Program � the largest contribution made in the program�s history. This represents more than a 55 per cent increase over last year�s expenditures. Designed to promote mineral prospecting and exploration activity opportunities in the province, the MIP invests directly in junior companies and prospectors who are active in exploration work in the province. The funding allows companies and individuals to leverage additional investment from the private sector. Every dollar invested by government generates $1.41 of private capital spent on grass roots exploration. The new funding will build on past success by proportionally increasing the number of junior exploration companies and prospectors that can access the program.

"The dividends are clear � encouraging greater exploration activity increases the potential for new business and employment opportunities for the people of the province," said Natural Resources Minister Ed Byrne. "The growth experienced in the sector over the past two years is significant; this new funding boosts our capacity to attract new firms, build relations with existing companies, and enables the mineral industry to aggressively pursue more mineral exploration and development right here in our province."

Government has committed an additional $500,000 to conduct more regionally-driven geological work in the province. An expanded ability to provide timely and public geoscience information benefits the private investment and exploration community since it permits them to quickly identify new prospects for mineral exploration in this province rather than making those investments elsewhere in the world.

Growing our Film Industry
With more than $24 million in local production activity, 2005 was the best year to date for the film industry. Budget 2006 retains the $2 million for the Newfoundland and Labrador Film Development Corporation's (NLFDC) Equity Investment Program. This injection allows the NLFDC to remain competitive and to attract and develop new and exciting film projects in the province. Government will also allocate $550,000 for core operational support, representing a $260,000 increase in core funding.

Since its inception, the NLFDC has been successful in developing and attracting more than 90 film projects, including feature films The Shipping News, Rare Birds and the television series Random Passage, generating approximately $77 million in local production activity.

Elimination of Liquor Licensee Levy
Government is accelerating its plan to eliminate the licensee levy on wine, spirits and beer through a $1.95 million investment in Budget 2006. In doing so, business owners are saving the nine per cent levy previously applied to wine and spirits and the $0.45 per dozen to beer two years ahead of schedule.

"The millions of dollars government is investing in industry development, and the actions we are taking to reduce red tape and fees, are intended to make our businesses more competitive," added Premier Williams. "This will translate into increased employment possibilities for the people of Newfoundland and Labrador, and will build upon the foundation of economic growth and prosperity which is our government�s priority."

Budget 2006 also supports initiatives intended to encourage partnerships with business and industry to grow key sectors including cultural industries, tourism, aquaculture, agriculture and agrifoods and small business.

Media contact:

Elizabeth Matthews, Office of the Premier, (709) 729-3960, 690-5500
Lynn Evans, Innovation, Trade and Rural Development, (709) 729-4570, 690-6290
Tracy Barron, Natural Resources, (709) 729-5282, 690-1703
Susanne Hiller, Tourism, Culture and Recreation, (709) 729-0928, 728-7762
Deborah Pennell, Finance, (709) 729-6830, 685-6612

2006 03 30                                   2:15 p.m.

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