Executive Council
April 29, 2008

Securing a Sustainable Future: Budget 2008
a Forward-Looking Fiscal Plan for a Province Destined for Prosperity

The Williams Government today presented a financial plan for the Government of Newfoundland and Labrador that sets out a clear path towards Securing a Sustainable Future by continuing to take progressive measures toward self-determination for the people of the province. Focused on increased health and education spending; poverty reduction initiatives; labour-market readiness; economic growth; investments in infrastructure; tax cuts; debt reduction; and, a prudent fiscal framework, Budget 2008 delivers to Newfoundlanders and Labradorians a solid approach for meeting today�s challenges with the view to long-term prosperity.

Budget 2008 confirms a surplus of almost $1.4 billion for fiscal year 2007-08 and forecasts a surplus of $544 million for the current fiscal year. Since March 2007, the net debt will decrease from $11.6 billion to $10 billion as forecast in 2008-09.

"We are experiencing today a level of financial success that is unprecedented, and represents an outstanding turnaround in four short years," said the Honourable Danny Williams, Premier of Newfoundland and Labrador. "Our healthy fiscal position provides our government with the ability to make significant and strategic investments in priority areas. There�s more social investment; more business investment; more infrastructure investment; and, we have more fiscal autonomy. We continue to lower taxes and lower our debt while receiving less in equalization. Newfoundland and Labrador is progressively growing a strong economic base that has resulted in lower unemployment and that will sustain our people for generations to come."

Among the highlights for Budget 2008 are:

  • $2.3 billion allocated for the health and community services budget. The Provincial Government is committing, on an annual basis, an additional $266 million for health operations and $133.5 million in capital funding;
  • Just two short years ago, the people of the province were burdened with the highest average personal income taxes in the country. Effective July 1, 2008, Newfoundland and Labrador will have the fourth lowest average personal income tax rates in the country, significantly improving the province�s competitiveness nationally. Budget 2008 includes $179 million in tax and fee measures, including a one per cent cut on personal income taxes; the elimination of retail sales tax on insurance premiums; and, the reduction in motor vehicle registration fees from $180 to $140;
  • $70 million more to be invested into education to bring the total budget to $1.1 billion;
  • $12 million investment in the Poverty Reduction Strategy that once annualized will bring government�s ongoing investment to more than $100 million;
  • $200 million to support technology, research and development, and economic development;
  • $673 million on infrastructure, increasing the province�s six-year infrastructure to an investment of more than $3 billion; and,
  • $319.5 million to the province�s energy corporation that will support the province�s investment in resources projects including Hebron and the White Rose Expansion and funding to improve the debt/equity ratio of Newfoundland and Labrador Hydro.
  • "Our investments in Budget 2008 clearly indicate that our government is spending our resources to improve the day-to-day lives of the people of the province," said the Honourable Tom Marshall, Minister of Finance and President of Treasury Board. "We are striking a balance to ensure we do not squander away our current fortunes that, for the most part, are based on volatile non-renewable resource revenues. Our government has the view that we need to be strategic in our fiscal approach to address our current burden of debt to secure a sustainable future. And we have been making great strides in reducing that debt. This balanced approach bodes well for the future of our province."

    The financial framework presented today also indicates the province is at the threshold of a tremendous milestone.

    "As a people and as a province, we are close to realizing a very important turning point in our history," said Premier Williams. "For decades we have made significant contributions to the Canadian federation while also remaining dependent upon equalization. Now, we are on the verge of a becoming a have province for the first time in our history. With a forecast of merely $18-million in equalization entitlements in this fiscal year, the day is clearly on the horizon when we will no longer be an equalization-receiving province. That could come as soon as next year and will be the result of our government�s persistent efforts towards strengthening our fiscal autonomy. We look forward to that day when we become full, contributing partners to this great federation."


    Media contacts:

    Elizabeth Matthews
    Director of Communications
    Office of the Premier
    709-729-3960, 709-693-7291
    Bill Hickey
    Director of Communications
    Department of Finance
    709-729-6830, 691-6390


    2008 04 29                                            2:05 p.m.

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