April
14, 2016
HOUSE OF ASSEMBLY PROCEEDINGS
Vol. XLVIII No. 13
The
House met at 2:00 p.m.
MR. SPEAKER (Osborne):
Order, please!
The
hon. the Minister of Finance and President of Treasury Board.
MS. C. BENNETT:
Mr. Speaker, I move,
seconded by the Premier, that this House approves in general the budgetary
policy of the government.
MR. SPEAKER:
The motion is that this
House approves in general the budgetary policy of the government.
The
hon. the Minister of Finance and President of Treasury Board.
MS. C. BENNETT:
Thank you, Mr. Speaker.
Before
we begin today, I'd like to take a moment for the people and the community of
Bay de Verde.
This
week, a devastating fire destroyed their fish plant and brought impacts to
surrounding homes and businesses. Our Premier, and Ministers Crocker and Joyce,
saw first-hand the impacts of the fire yesterday, and while meeting with the
company, the council and the residents, they witnessed something else –
resilience. Our government is going to stand behind them.
That
community has come together to support the people impacted by the devastating
event. They are a prime example of the resilience of every Newfoundlander and
Labradorian, and just as we know the people of Bay de Verde will persevere, we
know that all Newfoundlanders and Labradorians will rally together and endure as
we deal with unprecedented fiscal challenges ahead of us.
Restoring Fiscal Confidence
and Accountability
Mr.
Speaker, today, in our government's first budget, we are laying out a fiscal
plan that allows our province to regain control of government finances. It is a
credible plan, with clear objectives, transparent goals, and targets to which we
will hold ourselves accountable. It is critical that we do so. The uncontrolled
growth in expenditures, the dramatic fall in revenues and oil production,
exacerbated by the poor decision making by the previous government – have
produced a serious and unsustainable imbalance that must be corrected. Without
the actions outlined here today, we risk increasing our debt to unsupportable
levels and we jeopardize our long-term economic growth. For the well-being of
future generations, we have no choice but to take bold actions beginning today.
The
choices we have made are not easy and every Newfoundlander and Labradorian –
wherever they live and whatever services they use – will have to be part of the
solution. Indeed, some will have to do more than others, to ensure we mitigate
impacts on the most vulnerable in our communities. Something our government is
determined to do.
Where We Are
Our
government is committed to updating the people of Newfoundland and Labrador on
our province's fiscal state on a regular basis. On December 22, 2015, armed with
the most current fiscal and economic information we had available, we told the
people of the province that the fiscal situation of the province had worsened
and was worse than the $1.1
billion deficit budgeted and that the forecasted deficit for 2015-16 could be
almost $2 billion.
Our
government knew it was important that Newfoundlanders and Labradorians have a
thorough understanding of the reality so we could begin to work together on
solutions. Since that time, further declines in offshore royalties, the deficit
for 2015-16 is now expected to be $2.2 billion.
The
continued decrease in oil royalties has also increased our projected deficit for
the upcoming year, from our fiscal update, from $2.4 billion to $2.7 billion if
no action had been taken.
We are
part of a dynamic, yet volatile global economy that demands government be
equally dynamic. We must shift our view of budgeting from an annual exercise to
a monthly, weekly, and even daily part of government business.
Immediate Actions
After
updating the people of the province on the fiscal challenges we were facing, our
government implemented a series of immediate actions designed to realize
savings.
Restrictions were placed on hiring and the use of consultants, discretionary
travel and non-essential spending was eliminated and the reallocation of savings
was restricted.
Line-by-Line Analysis
In
addition to the immediate measures announced in December, the Treasury Board
embarked on a comprehensive line-by-line review of the budgets of all government
departments and entities. This type of thorough, detailed and comprehensive
analysis of every budget item helped us reduce unnecessary expenditures, find
efficiencies and drive further savings for the people of Newfoundland and
Labrador.
Mr.
Speaker, because of our government's action and a detailed approach to managing
expenses, no matter how small, in just over 120 days, we have been able to
achieve $113 million in savings as a result of the comprehensive line-by-line
review. Savings come from reductions due to eliminating vacant positions,
delayed recruitment, reduction in discretionary spending and reviewing operating
and program expenses in departments and bringing them in line with historical
spending.
How We Got Here
Mr.
Speaker, the fundamental problem of poor planning and management, as identified
by the Auditor General and others, and the inability and inconsistency of the
former administration to manage a fiscal plan, has left our province dealing
with an unprecedented deficit; unprecedented borrowing requirements; and
unprecedented fiscal pressures.
Specifically: the former administration failed to plan for the loss of revenues
from lower oil production. Spending was based on faith, not on facts. Facts like
oil production was in decline. For years, many knew this province would
experience peak oil production in 2007 based on proven recoverable reserves.
They
failed to plan for the possible loss of revenues due to volatile oil prices. In
January of 2008, oil prices peaked at $144 U.S a barrel. Since January, the
average price of oil has been $35 U.S. per barrel. $140 oil is only a distant
memory now. To solve the current deficit the price of would have to be $148 U.S.
Previous budgets made long-term decisions based on short-term and volatile
revenues, decisions like tax breaks and other measures that could not be
sustained. This year, we are forecasting the price of oil at $40 U.S.
Spending has not been managed. Over the past 10 years the previous government
spent at a rate that was 20 to 36 per cent, per capita higher than other
provinces. By planning six deficits in the past 12 years, while unpredictable
oil royalties grew, the former administration built a culture of spending in the
absence of good fiscal planning.
Quite
frankly, they increased spending beyond what our province can afford. They
failed to manage our debt. Since 2004, taking into account crown corporations,
they doubled the total public sector debt to a record $15 billion.
The
result of the failures in planning and management have become structural and
entrenched.
The
previous government's willingness to mortgage our future has left our province
facing the biggest deficit and highest net debt ever recorded in our history.
As our
Premier had said, knee-jerk reactions have created mistakes that, unfortunately,
Newfoundlanders and Labradorians are paying for now. Band aid solutions will not
fix the challenges we will face. In this fiscal year, debt expenses already
exceed the estimates for the entire Department of Education and Early Childhood
Development.
It is
impossible for us to be satisfied that we will spend more on debt expenses than
we do on educating our children.
Where we are headed
The Economy
The
impacts of poor planning by the previous administration, coupled with commodity
price decreases will and are impacting our economy.
While
economic activity remained at high levels in 2015, many indicators reported
declines. Real GDP fell by 2.3 per cent as oil production fell by 20.5 per cent
due to lower output from all three projects – Hibernia, Terra Nova and White
Rose. Investment also declined by 8.1 per cent as higher spending on Muskrat
Falls development was offset by lower spending on Vale's nickel processing
facility in Long Harbour, the Hebron project and residential construction.
Employment fell by 1 per cent and the unemployment rate increased by 0.9
percentage points to 12.8 per cent in 2015.
Economic activity in the province has been expected to slow over the next few
years due to the winding down of the development phases of the Hebron and
Muskrat Falls projects. The decline in commodity prices further weakened the
economic outlook. Development of several projects in the resource sector have
been deferred or delayed, such as the West White Rose Extension, the Alderon
iron ore and Bay du Nord, due to lower commodity prices.
As
such, the economy of the province has entered a period of adjustment that is
expected to last for several years. This year, while real GDP is forecasted to
grow due to a rebound in oil production, other important main economic
indicators such as employment and real household disposable income are expected
to decline. Beyond 2016 the outlook points to further declines in economic
activity.
Beyond
2016, economic growth is expected to be curtailed by a combination of factors,
including declines in capital investment as major projects move beyond peak
development and the requirement for further provincial deficit reduction
measures. Most main economic indicators are expected to be lower in 2021 than
current levels. Several major economic indicators like employment and real
compensation of employees will be lower by 15 per cent and over 22 per cent
respectively when compared to 2015 levels. Provincial deficit reduction measures
are estimated to account for 40 to 50 per cent of the predicted declines in
these broad measures of economic activity.
While
the short to medium term outlook is challenging, there remains significant
long-term potential in the Newfoundland and Labrador economy, particularly in
the energy sector. There are substantial oil and gas resources in the waters off
Newfoundland and Labrador. This is evidenced by the 2015 recourse assessment of
11 parcels in the Flemish Pass. This region alone, which covers less than two
per cent of the province's 1.5 million square kilometre offshore area, is
estimated to have a resource potential of 12 billion barrels of oil and 113
trillion cubic feet of natural gas.
Land
sale results in 2014, and more recently in November of 2015, show industry's
confidence in the offshore potential. In December 2014, the bid on one parcel in
the Flemish Pass by ExxonMobil, Suncor Energy and ConocoPhillips was $559
million, the highest bid ever on a land parcel in the Newfoundland and Labrador
offshore area. In November 2015, seven parcels were awarded in the Flemish Pass
basin with a total work commitment of $1.2 billion.
Deepwater exploration and development hold many opportunities for future growth
in oil production, and by extension, the provincial economy.
Our
province's natural resources hold many opportunities and we are optimistic about
these opportunities. However, we must act, plan and budget based on facts.
Nalcor
As the
province's energy corporation, Nalcor belongs to every citizen of Newfoundland
and Labrador. Since its creation in 2007, taxpayers have invested over $2.25
billion yet have received no dividends. For all corporations and their
shareholders, this would be unacceptable.
The
previous administration slowed Nalcor's organizational structure, compensation
and benefits packages to grow beyond what taxpayers would consider reasonable,
particularly given our current fiscal and economic circumstances.
Through
Budget 2016, initial steps have been taken to identify operational savings at
Nalcor approximating $6.7 million. However, due to prior year commitments by the
former administration, the required equity the province will need to invest in
Nalcor this year is $1.3 billion, bringing the total investment by the people of
the province to $3.6 billion.
Further
actions will be taken to maximize the return on investments made by our
province. Like government departments and public entities, Nalcor will be
expected to take a zero based budgeting approach to their administration and
operations effective with Budget 2017. The Nalcor Board will be directed to
review their operational structure to achieve efficiencies and develop a plan to
bring their compensation, benefits, and gender equity policies more in line with
similar positions in other public sector bodies.
Work at
the Muskrat Falls powerhouse is significantly behind schedule. Faced with these
schedule delays and expected cost increases on the project – a concern to all of
us – government is doing and will continue to do everything possible to help get
this project back on track.
Borrowing
But,
Mr. Speaker, these opportunities are in the future. As I've said earlier, based
on the status quo, had we done nothing, the projected deficit for the province
in 2016-17 would have been $2.7 billion. Given the actions announced today, we
have been able to cut the projected deficit by one-third.
The
actual budgeted deficit for 2016-17 is now $1.8 billion.
Our
government needs to ensure that money can be borrowed, at the lowest cost, to
pay for vital programs and services that Newfoundlanders and Labradorians
require.
It is
clear that our government's commitment to action in dealing with the fiscal
situation is allowing Newfoundland and Labrador to secure long-term financing.
In spite of the challenges facing our province fiscally and the limits in the
long-term bond market in Canada, our government has secured long-term financing
since January of just under $2 billion.
Stronger Fiscal Management
Today,
Mr. Speaker, our government is presenting the people of Newfoundland and
Labrador with our credible plan forward. We are establishing clear targets for
future years and laying the blocks for building the foundation for the future.
The
path to surplus must be taken in consideration of the impacts our decisions will
have on the overall economy. With this in mind we are planning, and holding
ourselves accountable to return to a surplus position in seven years.
To
ensure Newfoundland and Labrador is positioned to return to a surplus position
in Budget 2022, the Provincial Government has implemented a series of fiscal
targets as part of Budget 2016, including: borrowing targets that over the
seven-year period will require $8.2 billion in new debt, compared to $17.6
billion if nothing had changed; the net debt as of March 31, 2023, will be
targeted to be $16.5 billion, compared to $27.3 billion if we did not take
definitive actions; and, instead of a deficit of $1.9 billion, if no action was
taken, we are now targeting a small surplus in 2022-23.
In
addition, our government has taken a prudent approach and we have budgeted $125
million in risk adjustment to protect against adverse impacts from commodity
price fluctuations and volume. Newfoundland and Labrador is at a critical
juncture and unprecedented circumstances require unprecedented responses. The
people of our province, every one of us, feels this burden together and we are
all prepared to participate in the solutions.
Actions, in the face of adversity, define leadership. Our Cabinet feels strongly
that during these fiscally challenging times, we intend to demonstrate
leadership. That's why I'm here today, under the thoughtful leadership of our
Premier, to announce that our first action as part of Budget 2016 will be to
reduce cabinet ministers' salaries by 10 per cent.
How we get there
Engagement
When
difficult decisions have to be made, strong leaders know the importance of
listening to and engaging the public. That's exactly what our government did
through the Government Renewal Initiative.
People
across Newfoundland and Labrador embraced opportunities to address our
province's fiscal challenges like never before and have responded in
unprecedented ways to share their ideas.
More
than 1,000 people participated in 26 sessions since January. This included the
general public, communities, the public service, labour unions, businesses and
other groups. As a result, there have been several thousand ideas offered online
and hundreds of submissions have been received by mail, phone, email and fax.
In
March, we released the What We Are Hearing document, which provided valuable
insight on the needs of the people of the province and assists government in
addressing the province's fiscal challenges. Some of the themes included:
introducing new or increasing existing taxes and fees, the sale of government
assets, including land and buildings, as a way to cut costs and raise revenues;
health care reform to increase efficiency and access to health services; and
increasing efficiency throughout government departments by making better use of
technology.
In each
session we asked specifically – what is the one thing you want government to
remember when making decisions? The answers included: act now, don't delay; have
the guts to make the tough decisions; don't be restricted by promises made
during the election; offer alternative work arrangements; leave politics out of
the decision-making process; partner to deliver programming with non-profit and
private sectors; stop waste and treat money as if it were your own.
Our
job, as government, is to listen to those ideas, provide the evidence to support
our actions and then act.
Government Renewal
Initiative
Beginning in January, the Government Renewal Initiative, which is a multi-year
effort to re-engineer our programs, services and deliver systems to ensure they
are viable now and into the future, was undertaken.
In
addition to public engagement efforts, to further address the deficit, all
government departments, agencies, boards and commissions were asked to identify
potential options for savings and present options to reduce expenditures by
thirty per cent in three years.
Lead by
the Government Renewal Secretariat, analysis of the options identified for
savings led to proposals that were submitted for consideration. Each proposal
was assessed on its own merit, taking into consideration a variety of things.
The
Government Renewal Secretariat also assessed the cumulative impacts of the
Government Renewal proposals across client groups, sectors and communities. This
analysis also included impacts resulting from new revenue measures and fee
increases, and helped to inform Cabinet's decisions.
A full
list of the decisions made through this phase of the Government Renewal
Initiative can be found online on the Government of Newfoundland and Labrador
website. These decisions have resulted in $130 million in savings in this year's
budget, and will generate $189 million in savings on an annualized basis.
Today's
budget outlines the decisions resulting from both the line-by-line review and
the Government Renewal Initiative.
Some of
these decisions include: facilitating the Newfoundland and Labrador English
School Board to save $1.2 million annually on office rental; changing ferry
schedules and increasing ferry fees for annualized savings of $3.5 million, and
we continue to subsidize ferry operations at a rate of 91 per cent; reducing the
operational grant to the Research and Development Corporation by $3.2 million;
reducing the regular operational grant to Memorial University by $14 million;
reducing advertising budgets for a variety of departments and crown
corporations; saving approximately $1.3 million annually by restructuring the
court system. This will be achieved in consultation with the judiciary.
Reducing the grant portion and increasing the loan portion of the Student
Financial Assistance for Newfoundland and Labrador students, including medical
students, for annual savings of $5.5 million; identifying cash management
opportunities in various entities that will allow surplus cash to be used to
lower our borrowing; increasing class size caps for Grades 4 to 12 saving $8.8
million annually; removing coverage in the Newfoundland and Labrador
Prescription Drug Program for over the counter drugs and introducing limits to
diabetic test strips that are consistent with national guidelines for annualized
savings of $5.5 million; increasing the dividend being paid to the government
from Newfoundland and Labrador Liquor Corporation by an additional $3 million
but cutting expenses in the corporation; reorganizing units within some
departments, and closing some government offices. All affected locations will be
informed of these decisions by no later than tomorrow, after which time all
office locations will be made public.
In just
over 120 days, the Government Renewal Initiative and our line-by-line review has
saved $243 million in 2016-17, annualizing to $251 million. Taking into account
entities and accrual adjustments, the impact on the deficit in 128 days is $282
million in this fiscal year.
In
preparing for Budget 2016, it was important to identity a combination of
measures to reduce expenditures and increase revenue.
Revenue
A
series of new or increased tax measures and fee changes are being implemented
today. During our consultation process, input from Newfoundlanders and
Labradorians clearly pointed to increasing taxes and fees as a way to address
the unprecedented fiscal situation. Total revenue in 2016-17 will be $647
million annualizing to $882 million.
Effective April 15, tobacco taxes will increase by one cent per cigarette and by
two cents per gram of fine-cut tobacco products, raising additional revenue of
$5.5 million.
Several
tax changes will take effect July 1, 2016.
To
increase revenues by $204 million annually, it is necessary to increase Personal
Income Tax rates for all income ranges. However, Newfoundland and Labrador rates
remain competitive in Atlantic Canada.
The HST
rate will increase 2 percentage points, generating, on an annual basis, $224
million.
The
Retail Sales Tax on Insurance Premiums is being re-introduced at a rate of 15
per cent and will generate annualized revenue of $111 million.
The
Insurance Companies tax will increase by 1 percentage point, increasing revenues
by $16.9 million.
Effective January 1, 2016, the Financial Corporations Capital Tax Rate and the
general corporate income tax rate, will increase 1 per cent and the
Manufacturing and Processing Profits Tax Credit will be eliminated, generating
additional annual revenues of $31.8 million.
Another
measure this government is implementing is fee changes – on an annualized basis,
total fee changes are projected to raise an additional $19.3 million, this
includes the introduction of 50 new fees and the modification of a further 300.
Temporary tax measures
Our
plan will ensure Newfoundland and Labrador will not face these challenges
forever. That's why, through Budget 2016, we are implementing some temporary tax
measures.
A
Deficit Reduction Levy of up to $900 annually, depending on your taxable income
will be implemented. Individuals with taxable income of $20,000 or less will be
exempt. That levy will come into effect July 1, 2016. Revenue from the temporary
tax will be $74.8 million in 2016-17, annualizing to $126 million.
In 2018
we will begin the phase out of this temporary tax.
Effective June 2, 2016, gasoline tax will temporarily increase by 16.5 cents per
litre. This tax increase will be reviewed ahead of the Fall 2016 supplemental
budget. That's effective June 2, 2016. The tax rate on diesel products will also
increase by 5 cents per litre and the tax rate on aviation fuel will also go up
by 1.8 cents per litre. Taxes on Home Heating fuel will not change. The total
projected annual revenue for these measures is $142.8 million.
Tax Fairness
Increasing taxes is not something our government wants to do – but it must be
done in light of the deficit created by the lack of planning by the former
administration.
To
ensure the impact of the tax burden is reduced for the most vulnerable, Budget
2016 includes $63.7 million annualized for the delivery of enhanced benefits to
help reduce the impact of additional measures on low income seniors,
individuals, families, and persons with disabilities. The Newfoundland and
Labrador Income Supplement will be paid to those eligible in quarterly
installments. Eligibility will be based on family net income. We are investing
$12.7 million to enhance the existing Seniors' Benefit.
In
addition, the Provincial Government is investing $3 million to increase the
monthly fuel allowance to eligible income support clients.
Tax Review
Tax
increases must be balanced with tax competitiveness. During our mandate,
government will be completing a comprehensive independent review of the tax
system.
The
Federal Government has also announced their intention to conduct a review of the
Canadian tax system, looking at tax fairness. The Newfoundland and Labrador tax
system review will take place after the federal government completes their
review and after the 2017-18 provincial budget.
Investments
Our
government is facing a financial challenge like no other and we are taking the
actions necessary to get spending under control and increasing revenues.
However, we also know the importance of targeted, strategic investments.
That's
why we are investing funds through Budget 2016 to diversify the economy.
Fisheries
The
seafood industry is an economic mainstay and vital to our rural economy. We are
investing $2 million in a new Seafood and Aquaculture Innovation and Transition
Program supporting technology and innovation in harvesting, processing,
aquaculture and marketing with a focus on transitioning to ground fish. As well,
government is allocating $100,000 to establish a Fisheries Advisory Council to
provide industry stakeholders with the opportunity to offer advice on present
and emerging issues in the fishing industry. The Council will play a key role in
the creation of a strategic action plan on cod revitalization.
Forestry and Agrifoods
In
Budget 2016, government will follow through on its commitment to develop a new
food security and agriculture growth strategy and will support the Newfoundland
and Labrador Federation of Agriculture in maximizing opportunities for
development by working to leverage federal funding.
The
Provincial Government will also continue its commitment to Growing Forward 2, a
five-year federal-provincial territorial cost-shared initiative.
Rural Broadband
Our
government believes that high-speed internet is essential infrastructure in
Newfoundland and Labrador. Through Budget 2016, we will be investing $2 million
for broadband infrastructure over the next two years.
Tourism
Recognizing the importance of tourism and culture and heritage to economic
development, our government is investing $13 million for tourism marketing as
well as $18.5 million to support culture and heritage initiatives.
We are
also investing through Budget 2016 to improve social outcomes.
Education and Early
Childhood Development
The
Provincial Government will invest over $13 million annually for the
implementation of full-day Kindergarten beginning in September 2016, which
includes hiring approximately 142 new teachers and providing additional student
assistants.
$277,000 will be allocated to implement the Premier's Task Force on Improving
Educational Outcomes to examine the K-12 system and focus on improving outcomes
for all children in Newfoundland and Labrador, including our Aboriginal
children.
$1.4
million is provided for an additional 27 teaching units for inclusive education.
Health
Health
and Community Services accounts for the largest spending in government and we
know there are efficiencies and savings to be found in the health and community
services system. There are also critical programs and services we must continue
to invest in.
In
Budget 2016 we provide: Approximately $3.5 million for new service options for
seniors requiring enhanced care. This funding will provide up to 100 subsidies
to support the placement of select individuals with enhanced care needs in
personal care homes; Approximately $2.6 million for coverage of a number of new
drug therapies under the Newfoundland and Labrador Prescription Drug Program.
These drugs are presently under review by the national and regional review
agencies. This investment will also offer beneficiaries of the program a range
of new treatment options; $2.5 million to further planning and design of a new
facility to replace the Waterford Hospital; $8.5 million to support the
continued planning and design of the new Western Memorial Regional Hospital; $2
million to plan for long-term care in the Western and Central regions.
Justice and Public Safety
Through
an investment of $1 million over two years, renovations will be made to expand
the capacity of the Family Court in St. John's, resulting in more cases being
heard and fewer delays.
We are
investing $100,000 for the external review of the Office of the Chief Medical
Examiner. This external review is intended to identify where any potential
deficiencies lie within the Office of the Chief Medical Examiner with an aim to
improving the system.
Seniors, Wellness and Social
Development
Budget
2016 commits $500,000 to establish an Office of the Seniors' Advocate.
Infrastructure Planning
We
recognize the need to balance affordability with strategic infrastructure
spending, that is why this year we are investing $570 million on infrastructure.
Included are transportation projects, health care initiatives, school
infrastructure – both K to 12 and post-secondary and Newfoundland and Labrador
Housing projects.
We will
also invest in priority municipal infrastructure projects, as well as leverage
federal and municipal dollars to fund water and wastewater treatment, water and
sewer projects, municipal buildings, street improvements and recreational
facilities.
All
these projects will support jobs in our province as well. This is an important
element of infrastructure spending.
The
Provincial Government has also chosen to defer some infrastructure projects
based on further analysis.
Having
a plan to invest our money wisely, through strategic infrastructure projects as
an example, allows us to keep more people employed and that has a positive
impact on our economy.
Workforce of the Future
The
sheer magnitude of the financial challenge that we are facing is immense. We
must, and the people of the province expect us to, look at every avenue for
savings.
We are
eliminating approximately 450 Full-Time Equivalents in the Agencies, Boards and
Commissions. It is hard to pinpoint the exact number of people that will be
impacted as Full-Time Equivalent is not a position. Planning work on the exact
impacts continues in the Agencies, Boards and Commissions.
In core
government, we are eliminating approximately 200 positions; of that 125 people
will be impacted directly. Approximately 30 per cent of those are management or
non-union positions. As is always the case, the final number of people impacted
will not be known until the conclusion of the process.
Upcoming retirements present an opportunity and we continue our commitment to
using attrition as a preferred means to reduce the workforce. We want to
minimize job losses and keep people working.
Our
government will not be offering early retirement incentives as a method of
workforce reduction. We must focus public money on delivering critical public
services that are needed by the people.
Medium and Long-Term Actions
Given
the seriousness and scope of the current and forecasted fiscal situation, a new
approach is required that moves beyond the traditional single year budget
efforts.
Budget
2016 contains decisive actions, and will be followed by more actions in a
supplemental budget later this fall in conjunction with the Fall Fiscal update.
In the
medium-term, our government will be looking at several measures to find
efficiencies and generate revenue for our province, including: a government
procurement initiative to replace the current Public Tendering Act that will
help government achieve the best value for services; a real estate asset
management plan to ensure we review government's real estate portfolio and
determine how best to enhance its public value; a community grants approach to
set multi-year funding models for groups and allow for collaboration with
private donors to leverage more funding; a continued focus on improving health
care outcomes, through better management, achieving efficiencies, reducing
waste, and taking advantage of technology.
We will
also move forward with Phase 2 of the Government Renewal Initiative. We have
identified a number of policy options to further reduce expenditures, including:
government and departmental reorganization; efficiencies through major program
review and redesign; consolidation of functions within the public sector; and,
partnerships with the non-profit and private sector.
Legacy Fund
Our
government promised the people of Newfoundland and Labrador better management
and real leadership.
That
commitment is built on the realization that we have to carefully plan for the
difficult times.
This
government is planning for the future; we are putting the provisions in place so
that future generations will never have to weather a financial storm like the
one we inherited from the previous administration.
Our
government will establish a Diversified Wealth Fund once we have moved back into
surplus. We will put the necessary framework in place by bringing forward
legislation during our mandate. The legislation will be designed to prevent any
future governments from leaving our province in the fiscal situation we find
ourselves in today.
Financial Accountability and
Transparency
As we
continue toward reshaping Newfoundland and Labrador's fiscal future, we must
ensure we build a solid performance-based planning and monitoring framework
which provides greater financial accountability and transparency.
My
Treasury Board colleagues and I will be working meticulously to enhance
financial accountability and oversight of Departments, Agencies, Boards and
Commissions as well as Crown Corporations. The objective is to enhance
accountability for achieving key performance indicators while ensuring
multi-year fiscal objectives, as laid out in Budget 2016, are achieved.
Immediately following the announcement of Budget 2016, our government will
continue the planning process for our supplemental budget later this year when
we will announce more actions identified through the Government Renewal
Initiative. And further actions will also be identified as part of Budget 2017
next year.
In
preparing for Budget 2017, we will be implementing a zero-based budgeting
approach. Meaning, we will be building all department and entity budgets from
the ground up. We will be ensuring departments and entities have adequate
funding to deliver core programs and services that are important and provide
value for taxpayers while at the same time ensuring we can clearly measure key
performance outcomes and strive for greater efficiency.
Our
government will be expanding the role, as well as composition, of the
government-wide audit committee. The expanded role will allow for greater public
confidence in the government management process.
Mr.
Speaker, we will restore fiscal confidence and accountability.
We will
do what Newfoundlanders and Labradorians are expecting us to do: we will
eliminate government waste; we will stop excess spending; we will be more
efficient; and, we will expect that public money is treated responsibly. And we
will act when we suspect it is not.
Conclusion
Our
government has a plan for the future of our province – one that will achieve
fairness for all generations of Newfoundlanders and Labradorians.
Short-term thinking and short-term planning is something I will not do. We will
not sit idly by and hope for things to improve. Our plan is driven by the vision
for long-term sustainability for our province and our people – something that
can only be achieved through decisive and strategic short, medium and long-term
actions.
Led by
our Premier, backed by the strength and skill of the Cabinet and Caucus, we will
gather the facts, analyze the data, make plans, and execute and evaluate our
performance.
We will
hold ourselves accountable. We will get results.
Today
marks a bold step forward and we have much more work to do.
Mr.
Speaker, I can assure the people of the province we will not stop until we have
our province back on stable financial footing and we have restored confidence in
the fiscal future of this great province we are proud to call home.
Thank
you, Mr. Speaker.
MR. SPEAKER:
The hon. the Minister of
Finance and President of Treasury Board.
MS. C. BENNETT:
Mr. Speaker, I move,
seconded by the Premier, that the debate be adjourned
MR. SPEAKER:
The motion is that the
debate be adjourned.
Is it
the pleasure of the House to adopt this motion?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
MR. SPEAKER:
All those against, 'nay.'
Carried.
On
motion, budget debate adjourned.
MR. SPEAKER:
The hon. the Minister of
Finance and President of Treasury Board.
MS. C. BENNETT:
Mr. Speaker, I wish to
inform the House that I have received a message from His Honour the Lieutenant
Governor.
MR. SPEAKER:
All rise.
The
following message has been addressed by His Honour the Lieutenant Governor to
the hon. the Minister of Finance:
As
Lieutenant Governor of the Province of Newfoundland and Labrador, I transmit
Estimates of sums required for the Public Service of Province for the year
ending 31 March 2017, in the aggregate of $7,934,237,500, and in accordance with
the provisions of sections 54 and 90 of the Constitution Act, 1867, I recommend
these Estimates to the House of Assembly.
Sgd:
__________________________________________
Lieutenant Governor
Please
be seated.
The
hon. the Minister of Finance and President of Treasury Board.
MS. C. BENNETT:
Thank you, Mr. Speaker.
I move,
seconded by the Minister of Municipal Affairs and Service NL that the Message,
together with the Estimates, be referred to the Committee of Supply.
MR. SPEAKER:
It is moved and seconded
that the Message from His Honour the Lieutenant Governor, together with the
Estimates, be referred to a Committee of Supply and that I do now leave the
Chair.
Is it
the pleasure of the House to adopt the motion?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
MR. SPEAKER:
All those against, 'nay.'
Carried.
On
motion, that the House resolve itself into a Committee of the Whole on Supply,
Mr. Speaker left the Chair.
Committee of the Whole
(Budgetary documents are distributed.)
CHAIR (Dempster):
The hon. the Government
House Leader.
MR. A. PARSONS:
Madam Chair, I move that the
Committee rise, report progress and ask leave to sit again.
CHAIR:
The motion is that the
Committee rise, report progress and ask leave to sit again.
All
those in favour?
SOME HON. MEMBERS:
Aye.
CHAIR:
All those against?
The
motion is carried.
On
motion, that the Committee rise, report progress and ask leave to sit again, Mr.
Speaker returned to the Chair.
MR. SPEAKER (Osborne):
The hon. the
Deputy Speaker.
MS. DEMPSTER:
Mr. Speaker, the Committee
of Supply have considered the matters to them referred and have directed me to
report that some progress was made and ask leave to sit again.
MR. SPEAKER:
The Chair of the Committee
of Supply reports that the Committee have considered the matters to them
referred and have directed her to report that they have some progress and ask
leave to sit again.
When
shall the report be received?
MR. A. PARSONS:
Now.
MR. SPEAKER:
Now.
When
shall the Committee have leave to sit again?
MR. A. PARSONS:
Tomorrow.
MR. SPEAKER:
Tomorrow.
On
motion, report received and adopted. Committee ordered to sit again on tomorrow.
MR. SPEAKER:
Notices of Motion.
Notices of Motion
MR. SPEAKER:
The hon. the Minister of
Finance and President of Treasury Board.
MS. C. BENNETT:
Thank you, Mr. Speaker.
I give
notice that I will move that the House resolve itself into a Committee of the
Whole to consider a resolution respecting the imposition of taxes on personal
income, Bill 13.
Mr.
Speaker, I give notice that I will move that the House resolve itself into a
Committee of the Whole to consider a resolution respecting the imposition of a
deficit reduction levy on taxable income.
Mr.
Speaker, I give notice that I will move that the House resolve itself into a
Committee of the Whole to consider a resolution respecting the imposition of
taxes on corporate income, Bill 15.
Mr.
Speaker, I give notice that I will move that the House resolve itself into a
Committee of the Whole to consider a resolution respecting the imposition of
taxes on capital income, Bill 16.
Mr.
Speaker, I give notice that I will ask leave to introduce a bill entitled, An
Act To Amend The Income Tax Act, 2000 No. 5, Bill 17.
Mr.
Speaker, I give notice that I will move that the House resolve into a Committee
of the Whole to consider a resolution respecting the imposition of taxes on used
vehicles, Bill 18.
Mr.
Speaker, I give notice that I will move that the House resolve itself into a
Committee of the Whole to consider a resolution respecting the imposition of
taxes on insurance premiums, Bill 19.
Mr.
Speaker, I give notice that I will move that the House resolve itself into a
Committee of the Whole to consider a resolution respecting the imposition of
taxes on gasoline, Bill 20.
Mr.
Speaker, I give notice that I will move that the House resolve itself into a
Committee of the Whole to consider a resolution respecting the imposition of
taxes on insurance companies, Bill 21.
Mr.
Speaker, I give notice that I will move that the House resolve itself into a
Committee of the Whole to consider a resolution respecting the imposition of
taxes on tobacco, Bill 22.
Mr.
Speaker, I give notice that I will ask leave to introduce a bill entitled, An
Act To Amend The Revenue Administration Act, No. 6, Bill 23.
MR. SPEAKER:
Further notices of motion?
The
hon. the Government House Leader.
MR. A. PARSONS:
Mr. Speaker, I give notice,
and by leave, move that firstly the following heads of expenditure be referred
to the Government Services Committee: the Department of Finance and the Office
of the Chief Information Officer; the Public Service Commission and the Human
Resources Secretariat and the Women's Policy Office; Service Newfoundland and
Labrador; the Government Purchasing Agency; and the Department of Transportation
and Works.
Secondly, that the following heads of expenditure be referred to the Resource
Committee: the Department of Advanced Education and Skills; the Department of
Business, Tourism Culture and Rural Development; Forestry and Agrifoods; the
Department of Environment and Conservation and the Office of Climate Change and
Energy Efficiency; the Department of Fisheries and Aquaculture; and the
Department of Natural Resources and the Office of Public Engagement.
Finally, the following heads of expenditure be referred to the Social Services
Committee: the Department of Child, Youth and Family Services; the Department of
Education and Early Childhood Development; Fire and Emergency Services; the
Department of Health and Community Services; the Department of Justice and
Public Safety; Labour Relations; the Department of Municipal Affairs; the
Newfoundland and Labrador Housing Corporation; and the Department of Seniors,
Wellness and Social Development.
Mr.
Speaker, I also wish to advise Members that on Monday, April 18, 2016, at 9 a.m.
the Government Services Committee will meet in the Chamber to review the
Estimates for the Public Service Commission, along with the Human Resources
Secretariat and the Women's Policy Office of the Executive Council.
I
further advise Members that on Monday, April 18, 2016, at 6 p.m. the Social
Services Committee will meet in the Chamber to review the Estimates for
Municipal Affairs and Fire and Emergency Services.
MR. SPEAKER:
Is it the pleasure of the
House to adopt the motion of these referrals?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
MR. SPEAKER:
All those against, 'nay.'
Carried.
The
hon. the Government House Leader.
MR. A. PARSONS:
Mr. Speaker, I move,
seconded by the Minister of Finance and President of Treasury Board, that the
remaining Orders of the Day do stand deferred and that this House, on its
rising, do adjourn.
MR. SPEAKER:
The motion is that this
House do now adjourn.
Is it
the pleasure of the House to adopt the motion?
All
those in favour, 'aye.'
SOME HON. MEMBERS:
Aye.
MR. SPEAKER:
All those against, 'nay.'
Carried.
The
House does now stand adjourned until tomorrow, Monday, at 1:30 in the afternoon.
On
motion, the House at its rising adjourned until tomorrow, Monday, at 1:30 p.m.