A small forecasted jump in the price of oil, infrastructure spending that will create jobs, and savings in a number of areas of government operations has the Liberal government touting how it is exceeding its deficit reduction target and is on pace for a return to surplus in 2022-23.
What’s lacking in budget documents, however, is the smaller detail on where the savings, increased revenue and efficiencies have come from.
“There are no layoffs as a result of this budget. This budget does not include an announcement of mass layoffs as has been the practice in the past,” Bennett told reporters in the media lockup prior to her budget speech in the House of Assembly.
“We are methodically and responsibly working through identifying how to more efficiently deliver services to the people of the province and when we make those decisions, and identify what we can and will do, we will communicate to employees and unions at that time, and then communicate to the public.”
In her budget speech, Bennett said that in last year’s budget, the Liberals had to take measures to increase revenues.
“Our government made hard choices and asked taxpayers to dig deep into their pockets so we could close the gap between our revenue and our costs,” Bennett said.
“We are on a path to gain control of our finances and strike the balance of better spending controls and valuable investments in communities, people and the economy.”
The roll-out of today’s budget is expected to draw a milder reaction than Bennett’s first budget last spring where massive tax and fee increases resulted in criticism, protests and calls for hers and Premier Dwight Ball’s resignations.
This year the Liberals announced no fee or tax increases.
The documents note the budget for the 2016-17 fiscal year forecasted a deficit of $1.83 billion. The deficit for 2016-17 is now revised to $1.1 billion due to improvement in revenue and reduced expenses.
The 2017-18 deficit is projected to be $778 million — lower than the Liberal’s deficit reduction target of $800 million.
The gas tax will be reduced by 75 per cent by Dec. 1 of this year — the first cut of 8.5 cents per litre coming on June 1.
Also, on June 1, the rebate for Labrador border zones (Labrador West and southern Labrador), which was set at 10 cents per litre last year, will be reduced to 1.5 cents per litre until Dec. 1, at which time it will be discontinued. The temporary gas tax on the north coast of Labrador will continue to be reduced to the point that the price per litre does not exceed $1.55 or the gas tax is fully reduced.
Other measures announced include:
• $120 million to maintain the Newfoundland and Labrador Income Supplement and the Senior’s Benefit;
• Expenses reduced by $283 million as a result of cost control in areas of management structure and streamlining of departments, agencies and boards;
• Borrowing requirements have been reduced by $2 billion to $400 million;
• A $3-billion multi-year infrastructure plan — previously announced — is expected to create the equivalent of 4,900 full-time jobs annually over the next five years.
The budget also states revenues have improved by $544 million, primarily due to increased oil royalties.
The provincial government’s operating budget for 2017-18, based on the revised numbers for 2016-17, includes revenue of just over $7.3 billion; expenses of about $8.1 billion, and a deficit of $778 million.