Government of Newfoundland and Labrador Budget Overview
– Review of 2006
_Real GDP increased by 1.9% driven by gains in mineral exports, consumer spending and higher Provincial Government spending.
_The unemployment rate declined by 0.4 percentage points to 14.8%.
– Forecast for 2007
_Real GDP is expected to grow by 8.5% driven by higher oil and mineral exports.
_Employment is expected to increase by 1.2% to 218,300 and the unemployment rate is forecast to decline from 14.8% to 14.3%.Fiscal Performance
~Review of 2006-07
-Surplus of $76.0 million versus budget surplus estimated at $6.2 million.
-Reduced net debt by $70.0 million.
~Forecast for 2007-08
-$261.2 million surplus forecast.
-Reduce net debt by $66.0 million.
-Reduce debt servicing costs by $51.0 million.
Budget Plan for 2007-08
Largest Tax Reduction in the History of the Province
– Total value of personal income tax measures when fully annualized is $155 million.
– Effective July 1, 2007:
_Personal income tax rates decreased from 10.57% to 8.7%, 16.16% to 13.8% and 18.02% to 16.5%.
_Elimination of the 9% surtax.
_The personal income tax system, including tax brackets, most non-refundable tax credits and certain benefits, will be indexed to inflation.
– Effective January 1, 2007:
_The Low Income Tax Reduction will be adjusted from $12,000 to $13,000 for individuals and from $19,000 to $21,000 for families.
– Seniors’ Benefit for married seniors increased as a result of adjustments to the income threshold range. Total annual value of tax measure is $4.2 million.
– Effective January 1, 2007, small business corporate income tax threshold increased from $300,000 to $400,000. Annual value of tax reduction is $1 million.
– Retail Sales Tax on the private sales of used vehicles reduced from 15% to 14%, effective April 27, 2007, a tax reduction of $300,000 annually.
– Over 170 fees reduced or eliminated for an annualized savings of approximately $3.4 million.
ACTION TO PROMOTE ECONOMIC GROWTH
– $25 million for a new Business Attraction Fund providing for large-scale, strategic investments in business ventures and infrastructure for the purpose of attracting business to the Province.
– $7 million for a Business Grants Fund to assist with start-up costs for large scale companies setting up business in the Province.
– Additional funding of $500,000 under the Export Development Strategy to enhance trade and export development activity in the Province.
– $8 million for the Small and Medium Enterprise Fund, $7.78 million for the Regional/Sectoral Diversification Fund, $1 million for the Business and Market Development Program and $500,000 for the Ireland Business Partnerships.
– Additional $1 million for tourism marketing bringing the total budget to $11 million. Also, $104,000 for implementing an outfitting sector strategy and $100,000 for the development of a cultural tourism strategy.
Investing in Infrastructure
– Second year of government’s investment in infrastructure of over $2 billion over a six-year period. Investment of $440 million in 2007-08 which will generate an estimated 5,700 person-years of employment.
– More than $160 million investment in roads including $66.5 million for Provincial Roads Improvement Program, $17 million for construction of Phase III of the Trans Labrador Highway and $15 million (cost-shared with federal government) to provide a sealed surface on Phase I of the Trans Labrador Highway.
– $15 million under the Vessel Replacement Strategy for two new ferry vessels, an additional $1.3 million for a total of $10.3 million to refit government-owned ferry vessels and $5 million for maintenance and construction of terminals and wharves.
– Total investment of over $22 million for public buildings.
– $50.4 million as the Province’s contribution under various municipal capital works commitments.
– $1.25 million to replace regional forestry buildings at Winterland and Lewisporte and the regional veterinary building at Pynn’s Brook.
– $2.8 million for improvements and construction of various tourism and cultural sites such as Visitor Information Centres in Port aux Basques and Whitbourne, provincial historic sites, St. John’s Arts and Culture Centre and the Corner Brook Museum.
– $2 million allocated this year to help equalize the debt of towns seeking to work co-operatively at the municipal level.
Investing in Resource Development
– Direct funding of $5 million in 2007-08 ($15 million over three years) to begin implementation of the Fishing Industry Renewal Strategy. In addition to the direct investment of $15 million, tax reductions of $25 million and an estimated $100 million contingent liability for a revised loan guarantee program, this brings Government’s total commitment to $140 million.
– Over $16 million to advance the aquaculture sector.
– Approximately $9 million invested in the Agriculture and Agrifoods Development Fund and Agrifoods Assistance programs.
– Investing $500,000 to address emerging priorities in the forestry sector and increase the capacity to manage the resource.
– $167,000 for the completion of a Forest Industry Competitiveness and Strategy Study.
– An additional $700,000 for forest resource road construction for a total of $4.2 million.
– $10.1 million over three years to address immediate safety and environmental issues at the Baie Verte and Rambler mine sites.
– $12 million to begin implementing the Provincial Energy Plan.
– More than $900,000 for cooperative research initiatives for wildlife projects to leverage $2.6 million from outside sources.
– Increased the parks renewal strategy from a three-year commitment of $3 million to a four-year, $4 million initiative.
– Additional $500,000 for Newfoundland and Labrador Arts Council.
– Investment of $1 million to improve the collection of geoscience data.
Investing in Innovation
– $300,000 for the development of a Research and Development Strategy and the establishment of a Research and Development Council.
– $1.25 million total investment for the Centre of Excellence for Environmental Science, Research and Technology located in Corner Brook.
– $737,000 for the Institute for Biodiversity and Ecosystem Science.
– $10 million to expand the Industrial Research and Innovation Fund.
– $1 million for a new School of Ocean Technology at the Marine Institute.
– Over $4 million invested in other research and development projects.
– $10 million for the installation of a fibre optic telecommunications link.
Investing in Skills
– Approximately $1 million in 2007-08 for five new Career Information Resource Centres.
– $500,000 to hire 10 career information officers to provide career education supports in the K-12 system.
– Approximately $3.6 million over three years ($1,154,300 in 2007-08) to implement employment and business development projects in rural areas of the province.
– Approximately $3.2 million over three years ($1,060,000 in 2007-08) to expand the Graduate Retention Program to help an additional 100 graduates strengthen their attachment to the labour market.
– Minimum wage to be increased by $1.00 in two increments:
_50 cent increase on October 1, 2007;
_and Further 50 cent increase on April 1, 2008.
_Minimum wage rate of $8.00 per hour effective April 1, 2008.
_Review of minimum wage in consultation with stakeholders to be concluded in early 2008.
_$650,000 to increase funding for the Community Youth Network and to expand to six new areas of the province.
_Investment of $140,000 to update the provincial Strategic Literacy Plan.
Over $1 Billion Invested in Education
– Over $1 billion invested in education, the first time in the history of the province.
– Further investment of $41 million in the K-12 system.
– An increase of $14.8 million for new school construction, maintenance, repairs and innovations; $583,500 for additional information technology support specialists; $1 million for licensing of computer software; $1.65 million to continue the purchase of laboratory safety equipment; and $385,000 in new funding for provincial libraries.
– $5.2 million to retain 137 teaching positions in the system that would have been removed by the current teacher allocation formula and to create an additional 13 positions.
– $12.8 million to extend the provision of free textbooks in core courses to include all students from Kindergarten to Grade 12.
– $11.3 million for a three-year Excellence in Mathematics Strategy, including 25 new teaching positions.
– Other curriculum enhancements:
_$2.8 million for year three of the Cultural Connections Strategy;
_$1.5 million for year two of the Futures in Skilled Trades and Technology pilot in high schools;
_$800,000 for the extension of the Physical Education Equipment Program for Kindergarten to Grade 6;
_$400,000 for a review of the Grade 7-9 program.
– Support to Aboriginal students through enhanced guidance services ($330,000), an interchange program for students in Grade 8 and Level 1 ($150,000), cultural sensitivity training for teachers ($100,000), a training institute to help high school students prepare to work on industrial projects in Labrador ($400,000), adapting the Futures in Skills Trades program to Labrador ($200,000) and after-school programs to support students’ health, social and academic growth ($320,000).
– Incremental funding of $20.4 million for Memorial University. Total investments for MUN include $15.3 million for a new academic building at Sir Wilfred Grenfell Campus and the construction of two student residences, one in Corner Brook and one in St. John’s.
– Additional investment of $8.3 million for College of the North Atlantic.
– Tuition freeze maintained at Memorial University and College of the North Atlantic.
– Implementation of Student Debt Relief Program with an annual investment of $14.4 million which includes:
_Beginning in fall 2007, students will be provided with up to $70 per week in up-front, needs-based grants to offset their borrowing costs; and,
_The interest rate charged on provincial student loan debts will be decreased from prime plus 2.5 per cent to prime.
ACTION TO PROMOTE SOCIAL JUSTICE
Investing in Personal Self-Reliance
– An additional $28.9 million for the Poverty Reduction Strategy bringing the total annualized investment to over $91 million.
– $8 million ($11 million annualized) to increase the board and lodging supplement for adults with disabilities who reside with their own family members; a maximum increase of $362 a month.
– $1.8 million to promote greater labour market participation of persons with disabilities including $300,000 to expanding the Opening Doors Program to Crown Corporations.
– $585,000 to support women vulnerable to poverty including:
– An additional $250,000 annually for low income earners to access legal aid services;
_$200,000 to increase grants to the Province’s eight women’s centres;
_$120,000 to research ways to increase access to employment supports for victims of violence; and
_$15,000 to ensure a gender lens is applied to a new Low Income Guide to Government Services.
– $500,000 for the Vera Perlin Society for infrastructure and expansion of their services.
– $350,000 to enable the Newfoundland Labrador Housing to provide a lower rental rate for senior tenants aged 55 and older.
– The Newfoundland and Labrador Child Tax Benefit rate will be increased by $5 a month through an investment of $650,000.
– $300,000 to increase the Mother Baby Nutrition Supplement rate by $15 a month.
– $500,000 to implement a Home Visiting Program for vulnerable children to support parenting and early childhood development.
– $12.8 million to extend the provision of free textbooks in core courses to include all students from Kindergarten to Grade 12.
– $230,000 to increase the private child care allowance to $400 for the first child and $200 for additional children.
– $192,000 allocated to enable Newfoundland Labrador Housing to increase financial support for eight existing community centres.
– Increased funding of $27.5 million over five years for the Newfoundland Labrador Housing’s Modernization and Improvement Program.
– $24 million over the next six years, to more than double the funding for the Provincial Home Repair Program to eliminate the current wait list.
– $1.3 million for the construction of a new regional office building for Newfoundland Labrador Housing in Corner Brook.
Investing in Personal Health
– Enhancements to the Provincial Drug Program to make drugs more affordable. Annualized investment of $17.5 million when fully implemented.
– Almost $1.4 million to provide children under 18 diagnosed with Type I diabetes with insulin pumps and supplies.
– $2.3 million to expand dental health services for children between the ages of 13 and 17 by offering dental coverage for children in low-income families and providing sealants for children.
– $637,000 to include coverage for new drug therapies, such as primary pulmonary hypertension and certain breast cancers, under the Newfoundland and Labrador Prescription Drug Program.
– $22.3 million invested in diagnostic and capital equipment.
– Investment of approximately $67 million for new health care facilities.
– $2 million to improve access to health care services by extending the hours of operation for the MRI in St. John’s and Corner Brook, improved pre-hospital care in St. John’s, enhanced mammography and CT services in Carbonear and expanded endoscopy services in Gander and Grand Falls-Windsor.
– Almost $11.5 million to the Regional Integrated Health Authorities to address utilization pressures and to invest in new initiatives.
– Incremental funding of $1.6 million to complete the hiring of 39 public health nursing positions approved last year.
– $936,000 for a 5% rate increase for foster families, youth services, children living with relatives and alternate family care.
– $175,000 contribution to the Easter Seals Newfoundland and Labrador fundraising for a new facility.
– $2.65 million over two years will be invested to provide telehealth services for chronic disease management.
– Funding for the Kids Eat Smart Foundation will be increased by $250,000 in addition to the $500,000 in core funding.
– $100,000 to support the community use of schools by providing liability insurance for school boards.
– New funding of $228,800 for a Provincial Eating Disorders Program.
– $575,000 to address problem gambling in the province.
– $1.6 million for mental health and addiction services which includes $800,000 for the new Mental Health Care and Treatment Act and $800,000 for the implementation of the Mental Health and Addictions Policy Framework.
– Just over $396,000 will be used to create five new therapeutic speech language pathologist positions to address the wait list for these services by preschool children.
– $1 million to be cost-shared with Regional Integrated Health Authorities to support an eight-week orientation for graduate nurses in frontline practice.
– Incremental funding of $2.39 million to launch the Recreation and Sport Strategy and Action Plan.
Investing in Personal Security
– $6.5 million this year ($9 million annualized) to strengthen Child, Youth and Family Services.
– A $4.9 million investment over three years to create 59 new positions in response to the Lamer Inquiry report.
– Further to the incremental funding in response to the Lamer Report, just over $700,000 is provided this year for the Royal Newfoundland Constabulary and $3.4 million for the RCMP for 22 additional positions.
– Approximately $500,000 for Phase III of the Court Security Expansion.
– $230,000 for the Adult Alternative Justice Program.
– $11.3 million for the construction of the Corner Brook Courthouse, $500,000 to plan and design renovations and additions to RNC Headquarters and Annex and $500,000 to begin planning for a new adult correctional facility.
– $1.2 million in additional funds to improve service delivery by government services in key areas.
– Increased investment of just over $223,000 to the Department of Natural Resources for the animal health division for disease surveillance.
– The second year of the bursary program, funded at $185,500, will be provided to recruit environmental health officers to serve in rural regions of the province.
– $1.2 million provided to establish Fire and Emergency Services – Newfoundland and Labrador (FES-NL).
– $19.9 million to upgrade the provincial water bomber fleet.
Northern Strategic Plan for Labrador
Incremental funding of $55 million over the next five years:
_$8 million over 5 years ($1.6 million annually) for an electricity rebate for homeowners using diesel generated power in rural isolated communities along the Labrador coast;
_$1.5 million over five years to assess the status of inland fish species;
_$1.6 million over five years toward management plans for significant big game populations in Labrador;
_$750,000 to increase the Labrador Grooming Subsidy;
_$200,000 toward the construction of archives for Them Days;
_$615,000 to increase the Labrador Travel Subsidy over the next five years;
_$500,000 to increase the Cultural Travel Subsidy program over the next five years;
_$43,000 to offset travel costs for Labrador youth attending YC Newfoundland and Labrador;
_$4.8 million to construct a new K-12 school in Port Hope Simpson;
_$4 million contribution to construct a new school in Sheshatshui;
_$1.3 million to construct a new facility for the Francophone school in Happy Valley-Goose Bay;
_$1.24 million over five years to enhance the Medical Transportation Assistance Program;
_$1.6 million over five years to strengthen the Tele-Health network and video conferencing capacity;
_$335,000 ($67,000 annually) to provide picture archiving and communications systems for the Labrador Health Centre and Jackman Memorial Hospital; and
_$8.3 million over five years to enhance social work staffing.
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