The House met at 2:00 p.m.

MR. SPEAKER (Wiseman): Order, please!

Admit strangers.

The hon. the Minister of Finance and President of Treasury Board.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: 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.

MR. KENNEDY: Thank you, Mr. Speaker.

A Sound Plan. A Secure Future.

Earlier this year, our government projected a deficit for 2013-2014 of $1.6 billion.

We are now forecasting that the deficit has been significantly reduced to $563.8 million, a billion-dollar improvement to our bottom line.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: There are, generally, two reasons for the variance.

First, we have had a substantial increase in revenues of nearly $700 million. It does not take much to cause a wide swing in revenues when oil is involved. Every dollar increase in the price of oil generates about $26 million in revenue. Every penny increase in the value of the American dollar against our own brings an extra $27 million. Small swings in oil production can have large impacts on our revenues. It has been happening every year, not only here but in every jurisdiction where oil is a significant slice of the revenue pie. This is one of the reasons, Mr. Speaker, why we are investing in Muskrat Falls, because unlike oil, where prices and production volumes are volatile, hydro provides a stable, predictable, reliable revenue stream year after year for generations to come. It is a solid footing on which to build a sustainable economy.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: But this is not just a story, Mr. Speaker, of rapidly improving revenues. Much of the improvement to our bottom line since mid-year – in fact, about a third – is thanks to deliberate actions our government has taken to rein in spending without compromising services that are priorities for Newfoundlanders and Labradorians.

In projecting a significant deficit earlier this year, we could have made the easy choice to raise taxes or to let spending increase, which could have increased our debt, but we will not jeopardize the progress we have made as a Province. You do not borrow to pay for day-to-day expenses and send the bill to your children down the line.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: With responsible decisions today, we will ensure a prosperous and secure future for generations.

We have worked hard to reduce this deficit of $1.6 billion and make government more efficient. Unfortunately, this year it has meant tough choices.

Given that more than half of program spending is salaries, we cannot do it without layoffs.

Where we were able to do so, it will be done through attrition, but obviously that will not be possible in all cases.

With just over 8,900 employees in the core public service, the government will be laying off approximately 485 employees, which includes people who received layoff notices in early March. This includes 243 permanent positions, 206 temporary positions, and 36 seasonal positions. This will result in a decrease of approximately 5.4% in the size of the core public service.

These individuals will be treated with respect throughout this difficult transition period. The process will be handled professionally and carefully.

Making responsible decisions, Mr. Speaker, is not always easy, but it must be done. With our current revenues now being far less than anticipated, and our expenditures 50% higher than the national average, we must take action.

Now is the time to address the problem, when our economy is strong – when private sector job and investment opportunities are opening up by the thousands. In fact, we believe our economy is so strong right now that it can absorb much of the impact of what we are doing this year.

Let us not forget that it is our investments in our economy throughout the past decade and through the recession that have helped to power the activity the province is experiencing now. We took full advantage of the opportunities we had to meet the needs and priorities of Newfoundlanders and Labradorians.

The revenue generated from the oil and gas sector has enabled the provincial government to invest in programs and services and necessary infrastructure. While government expenditures have mirrored the growth in revenues, these investments were necessitated by deficiencies in social and physical infrastructure resulting from years of minimal investment in the years preceding our government taking office.

Newfoundland and Labrador weathered the 2009 economic recession better than most jurisdictions. The strength in the economy, our financial stability and our strategic investments in infrastructure enabled us to stand strong against the economic turmoil that gripped the globe. It was the right course of action at the time.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Our investments in health care have resulted in Newfoundland and Labrador being among the best in the country – in some cases, second to none – in wait times for priority medical services. We are investing over $1 billion this year to support children and families. We have lowered taxes since coming to office by half a billion dollars. We have the most competitive tax regime in Atlantic Canada. We offer a high-quality post-secondary system with tuition fees among the lowest in the country. We are second in the country in weekly earnings. We have more people working today than ever in our history. And I could go on.

We want Newfoundlanders and Labradorians to see where their money has been going. These are choices that people asked us to make, and look at the results.

Are we a "have province", Mr. Speaker? Yes, we are.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Are we a "have people"? Absolutely.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Is there more work to be done? There certainly is.

And we are ready to do just that.

We have been busy developing a plan – a 10-Year Sustainability Plan – to take us step by step from where we are right now to where we want to be a decade from now. And make no mistake about it, Mr. Speaker – we are aiming and planning big.

The plan this year and next year is to keep the deficit under control. In Year 3, we will return to surplus.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: In years 4 to 10, it is all about maintaining our fiscal strength and driving growth and investment.

In this year's budget – Year 1 of our 10-year plan – I am going to focus on five key themes.

First of all, responsible management and responsible decisions; second, investing in families; third, investing in education; fourth, investing in towns and communities; and fifth, investing in the future.

1. Responsible Management. Responsible Decisions.

Mr. Speaker, let me begin by focusing on the importance to our government of responsible management and responsible decisions.

Today we are facing fiscal challenges with projected deficits in the near-term. We are not unique, as other provinces are facing similar challenges.

While the fundamental drivers of economic growth in the Newfoundland and Labrador economy are expected to continue, the revenue that is generated from that growth is largely dependent on the oil and gas sector; a non-renewable resource industry characterized by variability and volatility in terms of price and production.

Our government has invested wisely to rebuild the province since we took office in 2003, by balancing investment with debt reduction. The current economy is booming as a result of these strategic investments. This government's sound financial management has also been recognized by the bond rating agencies which determine the province's credit rating.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: However, we must live within our means.

To achieve this objective, today our government has released a 10-Year Sustainability Plan, "Securing the Future." Bond rating agencies, the Auditor General and leading economists all stress the importance of a long-term plan, and our Sustainability Plan responds.

It is our government's goal, Mr. Speaker, to reduce net debt per capita to the all-province average within 10 years, while protecting vital services, especially in health and education.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Year 1 will be a deficit reduction process. Year 2 will involve reviews of Memorial University, College of the North Atlantic, Regional Health Authorities and Unfunded Pension Liabilities. In Year 3, we will return to surplus. In years 4 to 10, we will have a continue to have a focus on innovation, economic diversification and debt reduction to ensure the progress made to this point is not eroded over time and fiscal discipline is sustained.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Our government's Sustainability Plan will build on the work that has continued since 2003, including the Budget 2012 commitment to reduce net debt to the all-province average, the moderation in program spending growth over the last few years, and an ongoing review of core programs and services.

Our 10-Year Sustainability Plan has already taken root. The core mandate review that was initiated by our government in Budget 2012 resulted in a reduction in base expenses of $410 million and is reflected in Budget 2013.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: The extensive review and analysis completed over the past year by departments and agencies identified further opportunities for efficiencies and expense reduction that will form part of the ongoing process to achieve a sustainable level of expenses, while maintaining public services.

Implementing this plan will not be without its challenges. Already we know that further job adjustments this year will affect another 450 people outside core government departments.

To address the fiscal challenges associated with delivery of health care services, one of the focus areas of the 10-Year Sustainability Plan is our government's commitment to complete an operational review of the four Regional Health Authorities.

One source of growth in expenses is the cost associated with public service salaries and benefits, which account for more than half of program expenses government-wide, with certain departmental salaries and benefits making up nearly three-quarters of departmental expenses. In addition, annual expenses associated with pensions and post retirement liabilities approximate $900 million annually and these liabilities currently represent two-thirds of the province's net debt. These expenses are not sustainable over the long-term. The pension and post retirement review will be a key focus for our government, with options for future sustainability achieved through engagement with key stakeholders.

Education remains a key priority for our government. Investments in education currently represent 18.8% of government spending at $1.2 billion annually. As part of our 10-Year Sustainability Plan, our government will engage with Memorial University and College of the North Atlantic to complete a review to ensure that programs are being delivered as efficiently and effectively as possible while meeting the needs of students and the economy.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: While I have highlighted a couple of focus areas, the 10-Year Sustainability Plan provides a comprehensive view of the province's roadmap to fiscal sustainability. It is important to note that, in this first year, despite the deficit, we will not have to borrow.

The bottom line is this: we have a 10-Year Sustainability Plan –

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: – it builds on our government's continued commitment to strong financial management; and it includes a return to surplus by 2015-2016. Vital programs and services are protected. We are also demonstrating responsible management and making responsible decisions in the context of a strong, robust economy in which more people are working than at any other time in our history. We are in good shape, Mr. Speaker, and we are in good hands.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: The second theme anchoring this year's budget is "investing in families".

2. Investing in Families.

Mr. Speaker, there is no greater priority than supporting the health of individuals and families in Newfoundland and Labrador.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We have made a solid commitment to strengthen health care services.

We are making other significant investments in home care, personal care and long-term care.

For example, this budget allocates $6.1 million for a pilot of the Paid Family Caregiver Option, an amount that will be annualized to $8.2 million in 2014-2015.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are investing $9.2 million to address growth and the need for additional resources in the Home Support Program in 2013-2014 as more individuals require and apply for support services in their homes.

We are investing $1.6 million for the continued implementation of a pilot project for Community Rapid Response Teams, which will expand this year from two sites to four sites, providing enhanced health services and home support to seniors in their own homes, reducing the need for admissions to a hospital.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are investing $1.5 million in the implementation of the Enhanced Care in Personal Care Homes Pilot Project, which will allow residents to receive an enhanced level of care at personal care homes.

We are investing $624,000 to add 100 new portable subsidies to the Personal Care Home Program, providing individuals with greater personal care home choices and bringing the total number of subsidies to 2,348.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are investing $372,300 to introduce 40 subsidized respite beds in personal care homes to allow for increased access to respite services in communities.

We are investing $150,000 to enhance 30 palliative care comfort rooms in long-term care facilities and health care centres.

These investments, Mr. Speaker, will make a tremendous difference in many people's lives.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Budget 2013 also allocates $72.7 million for the continuation of several long-term infrastructure projects. Since 2004, we have constructed four long-term care facilities in Clarenville, Happy Valley – Goose Bay, Corner Brook and, most recently, Lewisporte. This year's investments will advance the Carbonear long-term care facility, the St. John's long-term care facility, the restorative care unit in the Corner Brook long-term care facility, the Clarenville protective care residence, the extension to the Happy Valley-Goose Bay long-term care facility, and the protective care residence in Bonavista.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: These investments complement the many, many other investments we are making to help our health care professionals meet the needs of patients and their families twenty-four hours a day, 365 days a year.

We will continue to improve wait times by allocating $2 million to focus on endoscopy wait times and wait lists. This is just the latest in a long series of measures to improve wait lists for health care procedures, which has seen strategic investments totalling $160 million over the past eight years.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We will continue to improve access to dialysis services at locations throughout the Province, the newest of which will be the hemodialysis site at Harbour Breton.

We are investing $9.5 million in 22 new drug therapies under the Newfoundland and Labrador Prescription Drug Program and the Cancer Care and Hematology Program.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: About $5.1 million of this funding is a reinvestment made possible by savings we have achieved through the new generic drug pricing model.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: At the same time, we will bring together the Breast Cancer Screening Program, the Cervical Screening Program, and the Colon Cancer Screening Program under the leadership of the Provincial Cancer Program in order to ensure vital screening services continue while streamlining the programs to better meet the needs of patients.

We will also invest $226 million to pay for continuing construction and redevelopment, new equipment, repairs, and renovations. Spending will address needs throughout the Province, targeting projects such as the Labrador West Health Centre; the PET scanner at the Health Sciences Centre, including the consolidation of nuclear medicine services at one site; the treatment centre for youth with complex mental health needs in Paradise; the treatment centre for youth with addictions in Grand Falls-Windsor; the new adult addictions centre in Harbour Grace; the Central Newfoundland Regional Health Centre in Grand Falls-Windsor; the Glovertown Health Clinic; a new health clinic in Marystown North; the Lewisporte Health Centre; planning of the new Green Bay Health Centre –

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: – planning for the replacement of the Waterford hospital; work on the Centre for Interdisciplinary Research in Human Genetics; infrastructure for future expansion of the cancer care program; continued expansion of the Faculty of Medicine; and a significant investment in the new hospital in Corner Brook that will see construction starting in 2015.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Health care is a basic need for every family, Mr. Speaker. Many also need access to child care. This year, we are investing $31.1 million in our 10-year child care strategy, which is named "Caring For Our Future: Provincial Strategy for Quality, Sufficient and Affordable Child Care in Newfoundland and Labrador".

One initiative associated with this funding is the Child Care Services Subsidy Program to assist eligible families with child care rates in a licensed child care centre or a regulated family child care home.

The Early Learning and Child Care Supplement provides funding for early childhood educators working directly with children in a homeroom, as well as program operators.

The Child Care Capacity Initiative provides start-up grants for non-profit community-based organizations offering child care services.

The Inclusion Program provides additional staff or funded spaces to accommodate all children in regular programming.

The Family Child Care Initiative provides much-needed regulated child care spaces with an emphasis on spaces for infants.

The Workplace Training Program supports upgrading of early childhood educators' qualifications.

Other elements include a Community Needs Assessment Tool and a Centralized Child Care Registry to monitor the demand.

We are investing a total of $14.3 million to continue the Continuum of Care Strategy, which is working towards improving the care options for children and youth in need of out-of-home placement.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: This initiative will also include $250,000 to launch the second phase of the foster parent recruitment campaign. The "Foster a Future…Foster a Child Today" promotional campaign was very successful in drawing attention to the need for new foster parents, and we are hopeful about the impact of the second phase.

To protect women and families from violence, we will maintain our investments in Regional Coordinating Committees Against Violence; Status of Women Centres; the Aboriginal Women's Violence Prevention Grants Program; the Inuit Women's Capacity Building Project; the Newfoundland and Labrador Sexual Assault Crisis and Prevention Centre; the Transition House Association of Newfoundland and Labrador; the Multicultural Women's Organization of Newfoundland and Labrador; and the Newfoundland and Labrador Aboriginal Women's Network.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are moving forward with Phase II of the Violence Prevention Initiative and undertake a wide range of actions to address violence and abuse, including cyber violence. Every Newfoundlander and Labradorian has the right to live, work and learn in violence-free communities.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: To better protect children in this province, we are breaking new ground. As the Premier and the Minister of Justice announced on March 22, Budget 2013 will provide for $1 million to form a new integrated provincial policing task force – the first of its kind in Newfoundland and Labrador – to investigate organized and serious crimes such as illegal drug activity and child exploitation.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: This joint initiative between the province's two police forces will combine more than 50 police resources, including crime analysts, investigators, computer forensic specialists and other specialized members of the RCMP and the RNC and draw upon expertise from other enforcement and social agencies. By combining forces, they will make great strides in combating crime and protecting the vulnerable, particularly our children and youth, from significant harm.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: So, Mr. Speaker, investing in families means we are protecting core values and setting priorities that reflect the needs of people throughout our province. We are continuing to enhance child protection, youth services and child care. These investments in families reflect our government's core values and priorities, and they are values and priorities that the people of this province share.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Mr. Speaker, the third theme anchoring this year's budget is "investing in education".

3. Investing in Education.

To demonstrate our unwavering commitment to education, we are allocating $1.3 billion to meet the educational needs of our people, young and old.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Budget 2013 provides $537 million for teachers' salaries, substitute teachers, student assistants, professional development, and various services for teachers.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Government is committed to protecting priority services for student learning, and to maintaining Newfoundland and Labrador's pupil-teacher ratio as the best of any province in Canada.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Budget 2013 makes provision to ensure there will be no need to reduce regular classroom teachers who deliver the required curriculum, and that direct services to students, and supports for students with special needs, will not be affected.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Reductions have been made in areas such as administration, learning resources support and district-based numeracy supports. This will result in the equivalent of 142 fewer positions assigned for the 2013-14 school year, with a further reduction of 18 positions as a direct result of enrolment decline. However, there will be more than 5,400 teaching positions allocated to the education system in September 2013, and with about 550 teachers eligible to retire this year, there is no expectation of teacher job losses.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: There will be no reduction in the allocation of regular classroom teachers assigned to deliver the required curriculum as a result of this budgetary process.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: There will be no reduction in direct services or supports for students with special needs.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: There are also no changes to K-9 class size caps for the required curriculum, and there are still 265 more teachers in the system in relation to student enrolment than there were prior to the implementation of the new teacher allocation model in 2008.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: In the wake of declining student enrolment, and recognizing the need to adjust the administrative structures in place to support K-12 education, Budget 2013 makes provision for two provincial school boards in Newfoundland and Labrador as of September 2013 – one English-language board and one French-language board.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Since school board administration was last consolidated in 2004, enrolment has declined by almost 14,000 students, or 17%. Given that demographic reality, and the need to direct the maximum funding available unto classrooms, government has re-examined the school board administrative structure to ensure it fits the educational system it serves.

Four current English-language school boards will see financial and administrative services amalgamated into one district office, located in St. John's. There will still be a strong regional presence in offices in Gander, Corner Brook, and Happy Valley-Goose Bay.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Senior executive and managers, and itinerant supports for students and teachers, will be in place, on the ground, in all the former school districts. In addition, many staff now located in satellite offices under the current board structure (Labrador City, Lower Cove, Stephenville, Grand Falls-Windsor, Burin, Clarenville, and Spaniard's Bay), will be deployed directly into schools.

Further details of the new board structure will be provided in the coming weeks.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: To further strengthen education in K-12, we will invest $102 million to advance a range of new and ongoing infrastructure projects, including a new school in Gander.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Planning for the extension to Elizabeth Park Elementary in Paradise.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Planning for the long-term infrastructure needs at Coley's Point Primary.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Modular classrooms in Portugal Cove-St. Philip's, Torbay, and Paradise, while planning continues for new schools in those areas.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Planning for the redevelopment of G.C. Rowe in Corner Brook.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Work on a new west-end high school in St. John's.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Work on St. Teresa's school, Roncalli Elementary, and Virginia Park Elementary in St. John's.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Work on the former Regina High in Corner Brook and Exploits Valley High in Grand Falls-Windsor.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: The new schools at St. Anthony and Carbonear, William Gillett Academy in Charlottetown, Labrador, and Holy Spirit High in Conception Bay South.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: And priority repairs and maintenance projects throughout the Province.

Our efforts to lay the foundation for success must begin early. They must take shape in our school system. Indeed, they need to begin during a child's earliest years. This is the reason we are investing in early childhood learning in the years from birth to age three, when the development of cognitive, social, and emotional skills is most crucial. This year's Budget includes an investment of $1.3 million to implement a third year of our early childhood learning strategy, Learning From the Start.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Experts agree the critical time to invest in early childhood learning is from infancy to age three. Initiatives this year will include the introduction of new early literacy programming, which will be piloted in select public library sites across the Province, as well as the further development and distribution of parent resource kits containing a wealth of early learning materials for infants, toddlers, and their caregivers. We are determined to give our children the best possible start in life so that they are equipped to thrive as they progress through school.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: The investments we make in education reap dividends when our young people graduate from high school and set their sights on the opportunities that follow.

As our government began working a decade ago to nurture new growth throughout Newfoundland and Labrador, we also set in motion a plan to ensure our people would be able to capitalize on the opportunities we were growing. Through our White Paper on Public Post-Secondary Education and the Skills Task Force, we prepared the groundwork for people to gain the skills they would need. We froze tuition fees and reformed the student aid program.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We advanced apprenticeship opportunities and journeyperson mentorship. We built relationships with people in other provinces and countries through trade and post-secondary partnerships. We negotiated unprecedented diversity and gender equity agreements to extend opportunities to many who have traditionally been under-represented in the skilled trades. Today, our people are better prepared than ever to benefit from the opportunities our economy is beginning to generate.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Nevertheless, the demand for skilled workers is still greater than the supply. To help meet that demand and enable more to share in the opportunities, we are providing a further $5.2 million to support apprenticeship and trades.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: This funding includes $2 million to continue the Journeyperson Mentorship Program to help increase the number of certified journeypersons available to support workplace training for apprentices. It also includes $1.8 million for the Government Hiring Apprenticeship Program; $800,000, supported with $7 million in federal funding, to continue the Apprenticeship Wage Subsidy Program, which helps provide work experiences to apprentices, with a focus on first and second-year apprentices, including those from under-represented groups such as women and persons with disabilities.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: It includes $600,000 for direct grants for women and Aboriginal people in apprenticeship.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: A further $7 million in federal funding is administered by the province through the Labour Market Development Agreement to support in-school training for apprentices as well as specialized training for journeypersons.

We are also taking two new approaches to link people needing jobs with jobs needing workers.

We will change the current delivery model for Adult Basic Education, including the transition of the program out of the College of the North Atlantic and the engagement of new training providers through a Request for Proposals process.

The goal is to improve service to clients by achieving efficiencies in program delivery, and making it more responsive to labour market conditions.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: The Department of Advanced Education and Skills will work with College of the North Atlantic to make the transition as smooth as possible for adult learners.

We will modify the Income Support program to improve emphasis on providing recipients with enhanced employment services to better assist individuals in getting a job. With significant job opportunities in Labrador, we will enhance employment service in areas such as Mary's Harbour, Nain and Hopedale to help residents take advantage of economic prospects.

In partnership with post-secondary institutions, we are investing a total of more than $466 million this year in new and continuing funding to enhance skills, training and opportunity. Thanks to these investments, Newfoundland and Labrador will continue to lead the country in post-secondary affordability and accessibility.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: With an additional investment of $3.8 million this year, we will enable Memorial University to continue the freeze on tuition for the 2014 academic year.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: The tuition freeze also remains in effect for College of the North Atlantic.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: With a continued investment of $19 million, we will maintain the up-front needs-based grants and interest-free student loans we introduced several years ago, and with another investment of $3 million, we will continue to provide debt-reduction grants to graduates, ensuring ours remains the most-progressive student aid program in the country.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Thanks to our government's leadership and significant investments, Mr. Speaker, in post-secondary accessibility and affordability, Memorial University undergraduate tuition fees and College of the North Atlantic tuition fees are now approximately 50% lower than the national average.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: As students from throughout our province, across the country and around the world study here in increasing numbers, Memorial and the College are growing in reputation and influence; students are forming strong attachments to our province; the province can tap into a growing pool of talented people to meet our pressing labour needs; and we are building bridges that will reap dividends in terms of trade, partnerships, immigration and population growth. In its report in August 2012, the Advisory Panel on Canada's International Education Strategy urged the country to double the number of international students choosing Canada by 2022 to improve our competitiveness. Newfoundland and Labrador is already on track to do just that. As our own daughters and sons enjoy the province's most-competitive tuition fees and student aid program, they will also reap the tremendous benefits of the growth in status and influence that our university and our college are now experiencing.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: To further strengthen post-secondary education in our province, we will invest $4.9 million for the continuation of science laboratory upgrades at Memorial University, plus $3.4 million for ongoing renovations to existing student residences at its St. John's campus. The budget also includes $2 million to increase base funding at Memorial's Fisheries and Marine Institute to continue the expansion of educational programming, research and student services for continued growth in the ocean sector, one of the province's leading technology growth sectors.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Furthermore, the budget invests $1.1 million for expansion of Memorial's Faculty of Engineering and Applied Science in the priority areas of ocean, arctic and offshore energy, to support major project development and facilitate private-sector industry partnerships. This investment will also support increased enrollment of undergraduate and graduate students at the faculty.

Since 2004, our government has invested more than $604 million to make our post-secondary system a model of accessibility and affordability for the rest of Canada.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: This investment includes over $248 million for vital post-secondary infrastructure, over $186 million to freeze tuition levels at the university and the college, and over $170 million to enhance student aid programming. In addition, the Research & Development Corporation has awarded more than $57 million to researchers at Memorial to support over 250 research and development projects in areas ranging from ocean technology, marine science and energy to health and life sciences.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: As a direct result of these investments, Newfoundland and Labrador is today one of the best places in the world to receive an education, build a career, start a family and stay.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are well on our way, Mr. Speaker, to transforming our province into a leading-edge growth centre with a global focus and a global reputation for excellence and success. This is precisely where we need to be.

All these gains begin with our investments in education, and that is why investing in education is, for our government, a core value and a priority.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: The fourth heading I want to touch on, Mr. Speaker, is Investing in Towns and Communities.

4. Investing in Towns and Communities.

Just as we are managing our affairs responsibly and sustainably, just as we are investing in families, just as we are investing in education, we are also investing in towns and communities, the fourth anchor of this year's budget.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Our government has listened to residents, organizations and community leaders about the importance of strengthening municipal infrastructure. In this year's budget, we are providing $230 million to support the rebuilding of aging municipal facilities, the delivery of new regional projects, and assistance to communities and organizations as they deliver services to residents.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Beginning January 1, 2014, we are reforming the Municipal Operating Grants formula to focus our support on smaller municipalities with populations under 11,000, which rely on this funding as an important source of revenue. The new formula will ensure none of these municipalities will receive less funding than their current level. Indeed, most will see an increase.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: At the same time, we are providing access to a new $25 million fund for the seven municipalities with populations greater than 11,000: namely, St. John's, Conception Bay South, Mount Pearl, Paradise, Corner Brook, Gander and Grand Falls-Windsor.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are ready to work with our municipalities to promote growth, stability and sustainability.

We will commence engagement with key stakeholders, including Municipalities Newfoundland and Labrador, to discuss a new fiscal framework.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are also prepared to step up and help communities that may be unsustainable. We will increase our support for the voluntary relocation of communities where at least 90% of residents vote to relocate. This year, we are significantly increasing the maximum payout per household in the provincial Relocation Policy from the current $100,000 to $270,000 –

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: – a more realistic amount to facilitate a move. As residents choose to relocate to areas of greater opportunity and security, we are ready to work with them so they, too, can reap the benefits of our province's growth.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Investing in communities also means investing in the environmental protection and public safety.

Public safety is the reason we will invest this year to remediate the soil in the public and residential areas of Buchans which were impacted by the former mine, and complete necessary repairs on the Gullbridge Tailings Dam.

We will also continue to invest in real-time water quality monitoring in order to minimize environmental damages associated with many industrial mega-projects.

Placentia Bay is among the busiest waterways is eastern Canada. To advance mariner safety, we are investing another $1.2 million in the SmartBay initiative to promote and develop technology for the benefit of all marine stakeholders.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are making provision to advance the work underway on the development and implementation of a province-wide basic 911 system.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Communities are also strengthened through many of our efforts to reduce poverty and promote self-reliance. Under our ongoing Poverty Reduction Strategy, we are allocating $149 million this year for an array of initiatives, including: $1.1 million will support the work of the Kids Eat Smart Foundation; $1.2 million will enhance health benefits for income support recipients; $4.8 million allocated through Newfoundland and Labrador Housing's Supportive Living Program will advance the work of community partners and stakeholders; and, $6.5 million will cover board and lodging supplements for adults with disabilities who live with family.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: This multi-year strategy is today celebrated across the country as a model of comprehensive, integrated, long-term intervention to prevent, reduce and alleviate poverty.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: As a result of its implementation, the incidence of poverty in our province is now below the national average. We are on the right track.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We will also expand the Supporting Youth with Transitions pilot program, which works directly with youth and youth-based organizations to provide life skills, such as communication and problem-solving, and assists youth in locating and securing appropriate housing, finding jobs and making sound educational choices.

Our investments in communities and municipalities will drive growth throughout our province, and that leads me to the fifth anchor of this year's budget.

Investing for the Future. A Plan to Keep Our Economy Vibrant.

A government has a vital role to play in nurturing the conditions for growth. We work with industries and businesses to promote growth and continually adjust our approach to ensure our efforts are achieving results. This year will be no different. Rather than itemize all of these measures, let me touch on the broad themes.

The province has developed dozens of programs to help businesses diversify and grow. This year, we will consolidate more than twenty such programs under two umbrella funds – a Business Investment Fund and a Regional Development Fund. The new approach will simplify, focus and streamline our efforts while preserving the flexibility to meet clients' needs.

We have invested billions in infrastructure to help regions attract investment. Over the next two years, we will invest more than $6.3 million in cooperation with the private sector to advance the Rural Broadband Initiative and further improve the province's telecommunications environment.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Since 2003, we have invested $29 million in broadband infrastructure throughout Newfoundland and Labrador and raised the number of communities with broadband access from 114 to more than 500.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We have helped local enterprises to become more innovate and leading-edge enterprises to gain a secure commercial foothold. This year, the Research & Development Corporation (RDC) will invest $1.3 million to complete the construction of two new facilities, the Suncor Energy Offshore Innovation Centre and C-CORE's Centre for Arctic Resource Development. This funding will advance applied research related to offshore petroleum development, ocean technology, and arctic and ice management, and support the training of new researchers. RDC's total investment of $8.8 million leverages $14.5 million from industry partners. Our government will continue to make significant investments to improve the province's research and development capacity by providing $22 million in Budget 2013 to support RDC.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: RDC investments in R&D totalling $69 million since its inception have leveraged $175 million from other sources, supported over 370 research projects and generated over 100 business partnerships in applied R&D projects.

We have invested in emerging industries such as aquaculture, the new anchor industry on the south coast. We have invested about $16 million to date in dedicated aquaculture infrastructure. These investments have contributed to salmonid sales reaching roughly $106 million in 2012. Salmon production and sales are forecast to double over the next few years. This year, we will invest another $8.6 million in aquaculture infrastructure to further strengthen –

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: - and secure the industry, including $4 million for a new wharf in Milltown and $2 million to complete wharves in Harbour Breton and Pool's Cove that will improve biosecurity and operational efficiency. At the same time, our government is integrating the Aquaculture Strategic Development Program with other seafood development and marketing grants to form a new Seafood Development Program, focused on growing the value of our seafood industry, now worth $1 billion a year to our province's economy.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We have also been investing strategically to grow traditional industries. We will work with Corner Brook Pulp and Paper to promote opportunities for the forest industry on the west coast.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We will continue to invest in fisheries, agrifoods, culture and tourism. It is worth noting that a significant milestone has recently been reached with annual tourism spending exceeding $1 billion. This growth is not accidental, but reflects a decade of strategic planning and targeted investments.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We will continue to invest in "Republic of Doyle", which further strengthens our film sector, contributes significant value to the provincial economy, and provides positive promotion for our province.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are also focusing on industries that are growing by leaps and bounds, none more so than mining and energy. We will continue to invest to promote exploration in both sectors, even as new mining, electricity and offshore petroleum projects come online. With these investments in the Jeanne d'Arc Basin, Bull Arm, Long Harbour, Voisey's Bay, Labrador West, Muskrat Falls and elsewhere in our province, our mining and energy sectors are white hot.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: All this activity translates into unprecedented opportunities for employment and spinoff benefits throughout our province. Mr. Speaker, we not only saw this coming. We helped make it happen, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: And we are ready to seize the opportunities so our people reap the benefits.

Investments we make in infrastructure also have the power to drive regional growth and diversification. That is exactly what they have been doing in our communities throughout the past decade. Since 2004, our government's expenditures to build, repair or replace key infrastructure throughout our province have exceeded $5 billion –

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: – and it is the people in our communities, Mr. Speaker, who are the beneficiaries of this vote of confidence in their future. This year will be no different. Our confidence in the future of Newfoundland and Labrador's regions and people is as strong as ever, Mr. Speaker. That is why we will continue to invest in our future through work on roads, marine services, health, education, municipal works, buildings, and aquaculture projects totalling over $866 million in value this year and generating 5,330 person-years of employment.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: To strengthen our transportation network, we will invest this year in work on all three phases of the Trans-Labrador Highway –

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: The Trans-Labrador Highway, plus the Trans-Canada Highway near Stephenville and Gander, the Placentia Lift Bridge, the Conception Bay South Bypass, the Team Gushue Highway, the Sir Robert Bond Bridge, Little Barachois Bridge, E.S. Spencer Bridge, Robinson's River Bridge, and other projects under a provincial roads program valued this year at $59 million.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We will also issue a request for proposals leading to a contract for the development of 15-year comprehensive passenger, vehicle, and freight ferry service, starting in 2016, for both the Strait of Belle Isle and the north coast of Labrador.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Let there be no doubt how strong and unwavering our commitment to Labrador truly is!

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: In addition to the investments I have already outlined to spur investment and growth throughout Labrador, there will be tremendous investment, employment, and growth opportunities flowing to Labradorians because of our investment to develop Muskrat Falls and our success in attracting new mining operations and exploration activity to the Big Land. Indeed, Muskrat Falls development presents a new and unprecedented opportunity to open up new development opportunities across Labrador.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: By the end of 2013-2014, spending in Labrador through the Northern Strategic Plan and other Labrador-related expenditures will have exceeded $4 billion since 2004.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: That includes an unprecedented investment of $450 million in the Trans-Labrador Highway.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: With the completion of the Highway and a range of other infrastructure and services investments, we are ensuring the people of Labrador share fully in the province's growth and success.

For Newfoundland and Labrador, economic growth is expected to be strong in 2013. Real GDP is expected to increase by 6.8% as increased investment, consumer spending, and a rebound in exports more than offset a decline in government spending.

Capital investment is expected to rise by 17.4% to a record $11.8 billion.

Construction activity at Vale's nickel processing facility is expected to remain at high levels.

The Hebron project will ramp up significantly with Gravity Base Structure (GBS) construction underway and the commencement of the topsides fabrication.

Development of the Muskrat Falls hydro-electric project is expected to accelerate.

Employment is expected to grow by 2.8% to an average of 236,900, leading to a 1.0 percentage point decline in the unemployment rate to 11.5%.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Personal income and disposable income are expected to increase 7.3% and 7.1% respectively, the result of employment gains and wage growth.

Retail sales are expected to grow by 4.2% as increased employment and income will boost consumer spending.

To advance this growth, Mr. Speaker, there will be no increases in personal income taxes or corporate taxes as a result of this budget.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: In total, our government has put more than $500 million annually back into the pockets of Newfoundlanders and Labradorians through tax reductions, and our province is

stronger because of it.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Mr. Speaker, we have a sound plan to ensure a secure future.

A Sound Plan. A Secure Future.

And there it is, Mr. Speaker – the plan that will lead us forward, this year, next year and throughout the coming decade, building on our strengths, harnessing our opportunities, and securing a bright future.

This year's budget is all about plans, priorities and choices. We choose the path that makes us strong. We choose the path that secures for Newfoundlanders and Labradorians a bright future.

Moving forward requires forward thinking, critical thinking, thinking that pushes the boundaries to achieve gains that were once out of reach. We are pioneering new approaches. It was in pursuit of a new approach that we established Nalcor, the Province's energy corporation, building a team second to none in expertise, reputation, and capacity, to make Newfoundland and Labrador a major player –

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: – both nationally and internationally, in energy resource development. And now, we are reaping the dividends.

We are well aware of where we used to be, how far we have come, and what it took to get us here. Mr. Speaker, we are on the right course.

We are making responsible decisions as responsible managers.

We are investing in families.

We are investing in education.

We are investing in towns and communities.

We are investing for the future, with a plan to keep Newfoundland and Labrador's economy vibrant and strong.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: Our foundation is indeed strong. Our plan is sound. We are a "have" province.

SOME HON. MEMBERS: Hear, hear!

MR. KENNEDY: We are a "have" province, and as a government, we have what it takes to ensure a prosperous and sustainable future for our children and grandchildren.

Thank you very much, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Finance.

MR. KENNEDY: Thank you, Mr. Speaker.

I move, seconded by the Premier, that the debate be adjourned.

MR. SPEAKER: It has been moved and seconded that the debate be now adjourned.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

Motion carried.

On motion, Budget Debate adjourned.

MR. SPEAKER: The hon. the Minister of Finance.

MR. KENNEDY: 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 is addressed to the hon. Minister of Finance:

As the Lieutenant Governor of the Province of Newfoundland and Labrador, I transmit Estimates of the sums required for the Public Service of the Province for the year ending 31 March 2014, in the aggregate of $7,360,131,700 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.:______________________

Frank F. Fagan, CM, ONL, MBA

Lieutenant Governor

Please be seated.

The hon. the Minister of Finance.

MR. KENNEDY: Mr. Speaker, I move, seconded by the Premier, that the Message, together with the Estimates, be referred to a 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.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

Motion carried.

On motion, that the House resolve itself into a Committee of the Whole on Supply, Mr. Speaker left the Chair.

CHAIR (Verge): Order, please!

We will take a few minutes to distribute the budgetary documents to all hon. members.

[Budgetary documents are distributed]

CHAIR: Order, please!

The hon. the Government House Leader.

MR. KING: Thank you, Mr. Chair.

Mr. 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, ‘aye'.

SOME HON. MEMBERS: Aye.

CHAIR: All those against, ‘nay'.

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 (Wiseman): Order, please!

The hon. the Member for Lewisporte.

SOME HON. MEMBERS: Hear, hear!

MR. VERGE: Mr. Speaker, the Committee of Supply have considered the matters to them referred and have directed me to report progress and ask leave to sit again.

MR. SPEAKER: The Chair of Committee of Supply reports that the Committee have considered the matters to them referred and have directed him to report progress and ask leave to sit again.

When shall the report be received?

AN HON. MEMBER: Now.

MR. SPEAKER: Now.

When shall the Committee have leave to sit again?

AN HON. MEMBER: Tomorrow.

MR. SPEAKER: Tomorrow.

On motion, report received and adopted. Committee ordered to sit again on tomorrow.

MR. SPEAKER: The hon. the Minister of Finance, under Notices of Motion.

MR. KENNEDY: I will try again, Mr. Speaker.

Mr. Speaker, I move, seconded – no, I got it wrong again.

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 3.

MR. SPEAKER: The hon. the Government House Leader.

MR. KING: Thank you, Mr. Speaker.

We ask forgiveness for the excited Minister of Finance here today.

By leave, Mr. Speaker, I wish to give notice of the Committees for Estimates, and the composition of these Committees.

MR. SPEAKER: Does the minister have leave?

AN HON. MEMBER: By leave.

MR. SPEAKER: The hon. the Government House Leader.

MR. KING: Thank you, Mr. Speaker.

I give notice, and by leave move, that the following committees and members shall stand for Estimates:

The Resource Committee will consist of the Members for: Conception Bay East – Bell Island; St. Barbe; Bonavista North; Humber Valley; Signal Hill – Quidi Vidi; Fortune Bay – Cape La Hune; and Lake Melville.

The composition of the Government Services Committee will consist of the Members for: Exploits; Humber Valley; Kilbride; Torngat Mountains; Mount Pearl South; St. John's East; and Bellevue.

The composition of the Social Services Committee will consist of the Members for: Port de Grave; Bay of Islands; Port au Port; St. John's West; Bonavista South; Burgeo – La Poile; and St. John's Centre.

With leave, Mr. Speaker, I give notice, and move, that the following Heads of Expenditure be referred to the Resource Committee: the Department of Advanced Education and Skills; the Department of Environment and Conservation; the Department of Fisheries and Aquaculture; the Department of Innovation, Business and Rural Development; the Department of Natural Resources; and the Department of Tourism, Culture and Recreation.

Mr. Speaker, with leave, I give notice and move that the following Heads of Expenditure be referred to the Social Services Committee: the Department of Health and Community Services; Child, Youth and Family Services; the Department of Education; Newfoundland and Labrador Housing Corporation; the Department of Justice and Attorney General; and the Department of Municipal Affairs.

Finally, Mr. Speaker, with leave, I give notice and move that the following Heads of Expenditure shall be referred to the Government Services Committee: the Department of Finance; the Public Service Commission; Service Newfoundland and Labrador; and the Department of Transportation and Works.

Mr. Speaker, I also give notice that on Monday, April 15, 2013, the Social Services Committee will meet in this House to review the Estimates of the Department of Municipal Affairs at 9:00 a.m.

MR. SPEAKER: The hon. the Government House Leader.

MR. KING: Thank you, Mr. Speaker.

Given the conclusion of the Budget Debate and notification of the appropriate notices and committees, I move, seconded by the Minister of Finance, that the House do now adjourn.

MR. SPEAKER: It has been moved and seconded that this House do now adjourn.

All those in favour, ‘aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, ‘nay'.

Motion carried.

Tomorrow being Wednesday, Private Members' Day, this House now stands adjourned until 2:00 p.m. tomorrow.

On motion, the House at its rising adjourned until tomorrow, Wednesday, at 2:00 p.m.