December 22, 2015
Securing Long-Term Prosperity
Government Announces Immediate Actions to Help Address Fiscal Situation
Today the Provincial Government announced immediate actions to begin to address the difficult fiscal reality the province is facing. These measures include a comprehensive review of the Muskrat Falls project as well as adjustments in hiring, discretionary spending, re-allocation of savings, use of consultants and travel.
“If we do nothing our program expenses will continue to rise; our debt expenses will continue to increase; our deficit will remain over $1 billion for the next five years; and we will continue to have to borrow at higher rates. That is not acceptable to us as a government and I know it is not acceptable to the people of the province. In the first three months of 2016 we will be working together with key stakeholders and the people of the province to inform Budget 2016-17 so we can put into place strong, long-term financial planning for Newfoundland and Labrador. In the meantime, given the significant increase in the current year deficit, the Provincial Government will implement a number of immediate measures that will help us begin to mitigate some of the fiscal impacts we are currently facing.”
- The Honourable Dwight Ball, Premier of Newfoundland and Labrador
Immediately, the Provincial Government is initiating a comprehensive review of the Muskrat Falls project and will be making changes to hiring, discretionary spending, engagement of consultants, and travel, as well as advising departments on the re-allocation of budgetary savings. Details are as follows:
- Review of Muskrat Falls
- The Provincial Government will undertake an independent review of the cost, schedule and associated risks for the Muskrat Falls project.
- While a strict hiring freeze is not being imposed, departments and agencies, boards and commissions (ABCs) are required to assess all ongoing recruitment and staffing actions.
- Unless critical to operations, departments and ABCs are directed to refrain from creating or requesting new permanent, temporary, casual or contractual positions.
- Discretionary spending
- Departments and ABCs are to refrain from incurring expenditures of a discretionary nature even if the costs can be transferred from within existing available funds.
- Re-allocation of savings
- Departments and ABCs are not permitted to re-profile any savings for the purposes of funding initiatives that are new or that were not included in Budget 2015.
- While this direction is applicable year round, utilization of savings near the end of the fiscal year would be of particular concern.
- Departments and ABCs are to review existing consulting contracts and assess if there is an ability to terminate the contracted work.
- Departments and ABCs are to review plans to hire consultants and assess whether the work can be deferred or performed using internal staff resources.
- Effective immediately all travel is to be discontinued with the exception of non-discretionary work-related travel or travel related to federal/provincial/territorial meetings.
- Departments and ABCs are encouraged to utilize technology to engage with employees, colleagues in other departments and agencies, and key stakeholders who may operate outside of the department’s or ABCs’ headquarters/region.
- Attendance at conferences/training events should be restricted to those activities which relate to core competency development in critical areas where skill/knowledge gaps exist or if required by employees to meet legal requirements such as occupational health and safety training.
These immediate actions do not include early retirement measures for the public service.
“If left unchecked, the extremely difficult fiscal reality facing our province will only worsen. This government is taking a collaborative approach to dealing with this situation. We want to engage with our public service as we embark upon making our vision of Newfoundland and Labrador a reality. We value and recognize the public service - their experience, knowledge and dedication is crucial to fulfilling the mandate we have set out. We need to utilize our public service so we can operate more efficiently while delivering programs and services that Newfoundlanders and Labradorians expect and deserve.”
- The Honourable Cathy Bennett, Minister of Finance and President of Treasury Board
The Provincial Government released the 2015-16 Mid-Year Fiscal and Economic Update today. Further information can be found at www.fin.gov.nl.ca.
- The Provincial Government is implementing immediate actions as a result of the current deficit situation.
- Actions include a comprehensive review of the Muskrat Falls Project, and changes to hiring, discretionary spending, engagement of consultants and travel, as well as advising departments on the re-allocation of budgetary savings.
- If no action is taken program expenses will continue to rise; debt expenses will continue to increase; the deficit will remain over $1 billion for the next five years; and the province will continue to have to borrow at higher rates.
- 30 -
Director of Communications
Office of the Premier
Director of Communications
Department of Finance
2015 12 22 2:40 p.m.