Budget 2017 Proof the Liberal Plan is Working
In less than two years, the Liberal government has reduced Newfoundland and Labrador’s structural deficit from $2.7 billion to $778 million — a reduction of 71.2%. When Premier Ball and his Cabinet took office in late 2015, the situation was grim: spending was out of control, debt was mounting, and waste was rampant. The PC government had squandered our province’s wealth and left behind a tremendous burden on the people of Newfoundland and Labrador.
During 2015 election campaign, Premier Ball promised immediate and decisive action to correct this situation — and that’s exactly what his government has delivered.
Today, Finance Minister Cathy Bennett is presenting the second budget of the Liberal administration. The 2017–2018 budget is concrete evidence that the actions taken by our government are working.
The deficit the PCs left behind threatened the very future of this province, and its ability to deliver services to Newfoundlanders and Labradorians. If the Liberal government had continued to spend at the rate the PCs did, we would have added $2.7 billion in new debt to the province’s balance sheet.
Instead, this $2.7 billion was reduced to $1.1 billion in the first year of the Liberal administration, and further reduced to $778 million this year. We are on target to return to surplus in six years. By every measure, the province is better off now than it was when the Liberal government first took office.
Budget 2017 at a glanceThe Liberals have changed the culture of runaway spending within government that was the PC legacy. Since our first days in office, the priority has been to find more efficient ways to spend taxpayer dollars and smarter ways to invest in our communities.
An example of smarter spending is the Liberal approach to paving: Two years ago, 166 kilometres of road were paved at a cost of $53.3 million. Last year, our government paved 256 kilometres at a cost of $47.7 million. That’s more road for less money. And that approach applies to every dollar our government spends.
In 2016, the Liberals reduced spending by $81 million. In the 2017 budget, we have reduced spending by a further $283 million. This early success reflects the actions the Liberals have taken to restore balance and responsible spending by government. This commitment to reducing spending will continue to inform actions taken by the Liberal government, and this is how the province will return to surplus.
The Liberals have implemented a credible plan to return Newfoundland and Labrador to a solid economic footing. This budget exceeds the deficit reduction targets put forth in this plan to return the province to surplus. Budget 2017 is proof that this plan works, and that the elimination of the crippling PC deficit is ahead of schedule.
Highlights from the Budget
Budget 2017 represents a smart, focused approach to addressing Newfoundland and Labrador’s serious economic situation. It reaffirms the Liberal commitment to getting the province back on track through strong fiscal management and responsible leadership. It builds on the principles outlined in The Way Forward, which is the Liberal vision for sustainability and growth.
Gas tax reduced; no new taxes or fee increases
- In 2017, residents of Newfoundland and Labrador will see a 75% reduction in the temporary gas tax.
- On June 1, the tax will be reduced by 8.5 cents per litre.
- On December 1, it will be reduced by a further 4 cents per litre.
- The Liberal government will review the remaining four-cent temporary tax as part of the 2017 fall fiscal and economic update.
- Budget 2017 will not contain any new taxes or fee increases.
- In order to maximize tax competitiveness, the Liberal government will begin a comprehensive review of Newfoundland and Labrador’s tax system this year. It will be completed before 2019.
Strategic investments and support for residents
- In 2017, the Liberal government will invest $120 million to continue offering the Newfoundland and Labrador Income Supplement [hyperlink to web story] and the Newfoundland and Labrador Seniors’ Benefit.
- By leveraging funding from our federal partners, the Liberal government has committed $250,000 to establish a Sexual Assault Response Pilot Program—this program will provide victims of sexual assault with an independent legal advisor in order to increase their understanding of the court process.
- The Liberal government is committing $5 million to advance recommendations from the All-Party Committee on Mental Health and Addictions. This is also being supported by an initial investment of $1.4 million from our federal partners.
- The Liberal government will invest $5 million over the next three years for a new Home Energy Savings Program.
- In order to link communities in Labrador and provide residents with greater access to services, the Liberal government will invest $55.7 million to advance paving of the Trans Labrador Highway.
- The Liberal government reaffirms its commitment to a five-year, $3 billion infrastructure plan. This plan will result in the equivalent of 4,900 full-time jobs per year.
Economic outlook improving
The economy of Newfoundland and Labrador is in transition. The aquaculture industry continues to grow, and we have seen strong performance in the province’s tourism industry. And, although there remains uncertainty in the resource sector due to fluctuating prices, there is cause for optimism.
- First oil from the Hebron field is expected later this year.
- There are significant exploration efforts underway that the Liberal government believes will lead to new offshore developments
- The Oil and Gas Industry Development Council is working hard to position Newfoundland and Labrador as a preferred destination for resource development.
Budget 2017 is proof that the Liberal plan is working. The crushing deficit left behind by the PCs has been significantly reduced and a wholesale change to the culture of spending is underway. The Liberal government has been able to achieve these positive results through responsible leadership and strong, smart fiscal management. This approach will continue to inform the Liberal government’s actions as we forge ahead with our plan to return Newfoundland and Labrador to prosperity.