The Right Choices:
Momentum For Growth and Prosperity

Economic Performance

Review of 2005

• Real GDP increased by 1.7% driven mainly by an increase in mineral exports and modest growth in investment and consumer spending.
• Capital investment increased to over $4.3 billion, up 1.8% over 2004 levels.
• The unemployment rate declined to 15.2% in 2005, the lowest level since 1981.

Forecast for 2006

• Real GDP is expected to grow by 6.2% driven primarily by oil and mineral production.
• Employment is expected to grow 0.6% to 215,400 and the unemployment rate is forecast to decline 0.2 percentage points to 15.0%.

Fiscal Performance 2005

• $76.5 million surplus versus budget target deficit of $492.5 million. The improvement is driven largely by higher oil royalties and Atlantic Accord protection.
• Government ahead of target in eliminating deficit.

Budget Plan for 2006

• $6.2 million surplus forecast.
• $156.0 million savings on debt servicing costs reinvested into programs.
• $927.0 million expected in royalties and corporate income tax directly from oil activity.
• No new taxes and only one tax increase. Effective 12:01a.m., March 31, 2006, the tobacco tax rate on cigarettes will increase by one cent per cigarette and by five cents per gram of fine-cut tobacco.

• More than a $100 million increase has been allocated for the Province's education system.
• $5.2 million ($9.1 million annually) is provided to retain 151 teaching positions that were slated for removal in 2006-07 and $250,000 for a review of the teacher allocation model.
• $5.3 million is committed to reduce the age of school busses, to purchase 67 new busses, and to offset maintenance and increased cost of fuel.
• Additional operating funding of $32.2 million will be provided to Memorial University.
• Additional operating funding of $8.5 million will be provided to the College of the North Atlantic. This operational funding includes an expansion of the availability of the Comprehensive Arts and Science College Transition Program, faculty upgrading, shop modernization, program development and marketing.
• $1.5 million is provided to ensure our school boards have adequate staffing resources, in order to effectively deliver services and supports to individual schools in each district.
• $150,000 is allocated to review the ISSP/Pathways Model.
• $2.2 million is allocated to provide laboratory safety equipment and teacher training for schools with grades 7-12.
• $2.0 million is allocated for course development and the purchase of equipment for schools.
• $1.0 million investment in Physical Education equipment.
• $300,000 for each of the next 3 years is provided to develop a senior high school Newfoundland and Labrador history course.
• $1.1 million is allocated for a research/training ship for Marine Institute.
• $125,000 is provided to create a liaison position to strengthen partnerships between school boards and school councils and to support volunteer work of parents.
• $250,000 is provided to extend the hours of operation at 42 public libraries.
• $500,000 is provided for the Offshore Safety and Survival Centre in Foxtrap which provides services to the offshore petroleum marine transportation and fisheries industries.
• $600,000 of funding is provided to support Apprenticeship Training Programs at Memorial University and other government funded entities.
• $270,000 is provided to increase the participation rate for women in apprenticeship and skilled trades initiatives.

• $20.0 million to be invested over 4 years for the Innovation Strategy including a Commercialization Fund and Innovation Enhancement Fund.
• $100,000 is provided for a Skills Task Force to identify skills gaps and the Province's future skill requirements.
• An additional $16.5 million is provided for White Paper Initiatives. This includes increased funding for grant in aid, to allow Memorial University and College of the North Atlantic to maintain tuition reductions, and other strategic investments.
• Funding of $7.5 million is provided for the Industrial and Research Innovation Fund as part of a three year escalating commitment.
• $54.0 million in dividends to be retained by NL Hydro to increase the public utility's leverage.
• $1.4 million is provided for support of key energy policy development initiatives including completion and implementation of the Provincial Energy Plan, and advice on energy policy developments.
• $1.5 million is provided to attract and retain professional staff and expertise in key management and technical skill areas to enable government to remain competitive with energy based industries.
• $500,000 provided to prepare the Centre for Environmental Excellence in Corner Brook for environmental R&D and commercialization opportunities.
• 34 fees have been reduced or eliminated to reduce burdens on businesses and individuals for a total savings of $1.5 million. In addition, the elimination of the Liquor Licensee Levy will result in savings of $1.95 million for the beverage industry.
• An additional $7.5 million will be invested for new and continuing IT projects of the Office of the Chief Information Officer.
• $8.0 million is allocated for the Small and Medium Enterprise Fund to support business development throughout the province.
• $5.0 million is provided for the continuation of the Regional/Sectoral Diversification fund.
• An additional $200,000 is allocated for the Ireland Business Partnerships, thereby increasing its annual budget to $500,000.
• $2.0 million is retained for the Newfoundland and Labrador Film Development Corporation's Equity Investment Program. In addition, $550,000 is allocated for core operational support, representing an increase of $260,000.

• There will be an unprecedented investment in excess of $2 billion to modernize the Province's infrastructure and continue to grow the economy over the next 6 years.
• $142.2 million has been allocated for a Roads Construction Program.
  This Program will include such initiatives as:
  • $60.0 million in Provincial Roads Improvement program;
  • $29.7 million in cost shared TCH improvements;
  • $25.5 million for Phase III of the Trans-Labrador Highway;
  • $10.0 million in cost shared funding to extend the Team Gushue Highway and begin the Torbay By-pass Road, including $6.0 million for land acquisition;
  • $2.0 million for land acquisition for various road projects; and
  • $15.0 million for Trans-Labrador Highway Phase I sealed surface, subject to Federal cost shared commitment.
• $12.4 million is allocated for summer and winter maintenance, including funding to replace heavy equipment, such as snow plows, and implement a salt management plan.
• $2.2 million is allocated to complete the Chateau Pond depot on the Trans-Labrador Highway, and renovate the highway depot in Lumsden and a garage in Eastport.
• $9.0 million is allocated for refits to ferry vessels.
• $6.1 million is provided for the maintenance of wharves and terminals.
• $1.5 million is provided to initiate design for construction of two vessels right here in Newfoundland and Labrador.
• $22.5 million committed to the Municipal Capital Works Program which will lever further municipal funding.
• Government will administer the $19.8 million federal gas tax rebate program for municipal environmentally sustainable projects.
• $1.0 million is provided to access funding under the Canada Strategic Infrastructure Fund II to advance large-scale infrastructure projects. This is the first installment in a multi year arrangement that will address large scale infrastructure projects valued at over $10 million each.
• $9.0 million in new commitments for the Municipal Rural Infrastructure Fund with a focus on projects that improve the quality of the environment.
• A further $700,000 will be invested under the Canada -Newfoundland and Labrador Infrastructure Program.
• $18.0 million will be invested in public buildings for maintenance, reconfiguration, remediation and demolition.
• $12.0 million has been allocated for repairs to hospitals and nursing homes to address fire and life safety, occupational health and safety and building integrity issues.
• $2.15 million has been allocated to begin construction on a courthouse in Corner Brook to better serve the public in a secure setting.
• Close to $40.0 million is being included in the 2006-07 budget in the health care sector for a number of capital construction projects including Corner Brook, Clarenville, and Happy Valley-Goose Bay long-term care facilities; the Grand Bank Health Centre, health care centre in Labrador City, renovate a hospital wing at James Paton Memorial Hospital in Gander, the Cancer Centre in Grand Falls-Windsor and renovations to the Blue Crest Nursing Home, the Humberwood Addictions Centre in Corner Brook, and planning for long term care planning in Lewisporte and St. John's.
• Capital investment in our education system includes $20.4 million for Memorial University, $8.6 million for College of the North Atlantic and $37.0 million for the K-12 system.
• Funding is provided to reinstate the commercial weigh scales in Port Aux Basques and Foxtrap.
• $6.5 million will be provided for capital expenditures for the College of the North Atlantic including $4.5 million in investments for the Prince Philip Drive Campus, $1.0 million to enhance the development of a new site in Labrador West and $1.0 million to begin an extension to the campus in Happy Valley-Goose Bay.

• $10.0 million will be invested over 3 years in the Aquaculture Capital Investment Program, beginning with $3.5 million this year.
• The budget for the Seafood Development and Diversification Program will be increased by $250,000 a year for 5 years.
• $300,000 per year for the next 5 years will be invested to implement the Strategy for the Recovery and Management of Cod Stocks in partnership with the Government of Canada.
• $350,000 is being provided over 2 years to increase the Province's capacity for coastal and oceans management.
• Elimination of processing licence fee increases is planned for 2006-07 and 2007-08 and also the elimination of species surcharge increases planned for 2006-07.
• Allocation of $360,000 for aquaculture industry support, doubling the investment in the program in this year.
• $265,000 is budgeted to support new initiatives designed to address seafood trade and market barriers.
• $100,000 is provided to enhance the promotion of the Province's seafood products and develop a broader range of international market opportunities.
• An increase of $100,000 is provided for the Strategic Infrastructure Program bringing the total value of the program to $300,000. This will assist in upgrading fisheries infrastructure to improve efficiency, product quality, and safety in the landing and handling of fish.
• $500,000 is allocated to take the next step to commercialize cod aquaculture through the creation of a commercial-scale cod demonstration farm.
• Investments of approximately $9 million in the agriculture industry including:
  • $4.0 million in new funding for the Agrifoods Development Fund;
  • $2.0 million for the Provincial Agrifoods Assistance Program;
  • $2.3 million for acquisition of agricultural farmland and construction of agricultural roads;
  • $342,300 for the Agriculture Limestone Program to help enrich the dairy and sod sectors.
• To ensure a healthy wood supply, the budget allows for $800,000 in new funding to conduct a forest inventory, a $1.0 million increase in each of the next 3 years for silviculture initiatives to replenish our resources, and a $1.0 million increase for forest insect control and fire suppression.
• $4.25 million is provided for investment in the Community Enhancement Program to support the immediate need for short-term employment of many residents of rural communities.
• $1.1 million will be provided to the Bull Arm Site Corporation to manage the site and attract more offshore fabrication.
• $2.5 million is allocated to the Mineral Incentive Program, an increase of $900,000, to promote mineral prospecting and exploration activity in the province, plus an additional $500,000 to conduct more regional geological work.
• Funding is continued for the Inland Fisheries Enforcement Program to combat salmon poaching thoughout the province.
• $100,000 is budgeted to prepare and implement a sealing industry communications strategy to combat misinformation about the $40 million a year industry.
   

• More than $50.0 million in funding is provided to construct infrastructure in Labrador in 2006-07 as part of commitments totalling more than $200 million over the next 4 years.
• $325,000 is provided to proceed with development of the Labrador Transportation Strategy.
• $1.3 million is allocated to implement the Labrador Inuit Land Claims Agreement.
• $240,000 is provided over two years for an Aboriginal suicide prevention initiative to be cost-shared with the Federal Government.
• Funding for the Air Foodlift Subsidy has been increased by one third raising the funding level to $400,000.
• $100,000 represents the second year funding in a three year commitment for Destination Labrador tourism marketing initiative.
• $1.9 million is committed for the provincial contribution to establish a performance space in Happy Valley-Goose Bay.
• $759,000 is provided to extend the operation season of the Straits Ferry Service by 4 weeks.
• Funding is provided to establish Supreme Court circuit courts for coastal communities to improve access to justice services in remote areas.
   

• $17.6 million has been provided over the next 3 years to support the continued success and growth of professional artists and cultural industries with the adoption of the Province's first strategic cultural plan Creative Newfoundland and Labrador: The Blue Print for Development and Investment in Culture.
• $200,000 is provided for the core operational funding under the Cultural Economic Development Program.
• Increase is provided in the allocation to the Newfoundland and Labrador Arts Council by $300,000 this year, bringing its funding to $1.15 million so it can better support the arts community. The cumulative new investment in the Arts Council over the next 3 years will be $1.8 million, which will double the Council's existing budget.
• $2.0 million has been committed to bring our total tourism marketing budget to $10.0 million.
• $3.8 million has been committed toward improving the Province's Arts and Culture Centres, Provincial Historic Sites, regional museums and other cultural institutions, including the LSPU hall and Colonial Building.
• $125,000 is provided for infrastructure improvements and interpretation at the Corner Brook Museum, with a total investment of $325,000 over two years.
• $1.6 million over two years is provided to create leading edge and technologically-based provincial Visitor Information Centres.
• $482,500 is provided over 3 years to support the creation and operation of a new Visitor Information Centre at St. John's Airport in partnership with the City of St. John's and the St. John's Airport Authority.
• A further $700,000 is committed this year for a total Provincial contribution of $2.0 million toward the creation and operation of a new Provincial Training Centre for athletes.
• $500,000 has been provided for continued implementation of the Province's Climate Change Action Plan and $1.0 million has been earmarked for the clean up of selected contaminated sites throughout the province.
• $3.0 million will be provided over 2 years to assess the status of 10 of the Province's major Caribou populations.
• $1.0 million will be provided to make various improvements to several Provincial parks.
• $259,000 has been provided to continue the Natural Areas System Plan.

• $8.3 million this year, and $32.8 million annualized is provided to extend eligibility for the Newfoundland and Labrador Prescription Drug Program to more low income-residents.
• $430,000 in 2006-07 ($570,000 annually) is provided to extend Income Support to clients starting a job during the first critical month, and simplify the process for reporting income.
• An additional $500,000 in funding is provided to continue employment development.
• $1.5 million in 2006-07 ($2.0 million annually) will be provided for new skills development courses.
• $6.3 million will be provided to increase the instructional grant to school boards and to cover prescribed workbooks and consumable materials currently charged to parents.
• $250,000 will be spent to implement new school guidelines to promote healthy eating. In addition, $500,000 will be invested in the Kids Eat Smart Foundation.
• $250,000 will be committed to provide continued support of the Jumpstart Program.
• $500,000 is earmarked for a rental rebate for tenants of Newfoundland and Labrador Housing for residents attending levels 2 to 4 in high school or post-secondary school.
• The investment in adult basic education is increased by $1.2 million to expand the number of courses. $228,000 is provided for the review of the adult basic education program.
• $5.6 million in 2006-07 ($7.4 million annually) will be invested to increase income support rates by 5% effective July 1, 2006.
• An additional $3.0 million will be provided each year to index income support rates with the consumer price index for six years starting in 2007-08
• $2.1 million in 2006-07 ($2.8 million annually) will be provided to increase additional assistance for shelter rate.
• For families with children with disabilities, $2.25 million has been provided to increase access to the Special Child Welfare Allowance Program.
• A further $1.1 million to strengthen the provincial legal aid system is also budgeted. This includes 2 lawyers and 1 administrative support person for Happy Valley Goose Bay which is consistent with the recommendations of the Aboriginal Law Project Report. This funding will also provide an additional 2 lawyers and 1 administration support person for other areas of the province and operational support.
• Total funding for Women's Centres is increased by $80,000 per year.

• Investment of $3.1 million will be made to strengthen the police presence throughout the Province, including hiring 9 new RCMP officers, filling 9 vacant regular member positions, creating 8 new RNC constable positions, and creating a new RNC dog unit in Corner Brook.
• Approximately $6.9 million is provided for the operations of the RCMP and RNC, including 5 new administrative positions, 4 new civilian dispatchers, 2 RCMP Operational Communication Centre positions, 2 RCMP public service positions in Labrador, and various other operational pressures.
• $100,000 is provided for Sex Offender and Spousal Abuse Treatment Programs .
• An investment of $219,500 is made to expand court security in Happy Valley-Goose Bay, Wabush and Grand Falls-Windsor.
• Funding is provided for 55 new child, youth and family services positions over the next 3 years, beginning with a new investment of $1.5 million in 2006-07.
• An additional $305,000 is provided to support transition homes in Labrador West, Hopedale and St. John's.
• $1.25 million is provided to support Government's new 6 year action plan on violence prevention.

• Total current and capital investment is increased by $180.0 million compared to last year.
• In excess of an additional $60.0 million will maintain core health and community services through Regional Integrated Health Authorities.
• $15.6 million in new funding will be invested to help prevent and treat cancer. This includes:
  • $3.3 million to construct 2 new bunkers to house 2 new radiation treatment machines at the Dr. H. Bliss Murphy Centre;
  • $1.5 million to enhance the Provincial Cervical Screening Program;
  • $750,000 for breast cancer screening centres in Grand Falls-Windsor and St. John's and other program enhancements;
  • $6.4 million to introduce new treatment therapies for colorectal cancer and multiple myeloma; and
  • $3.6 million to cover cancer medications.
• $6.0 million is provided to bring the personal care home subsidy rate from $1,138 to $1,500 effective July 1, 2006, and to provide additional subsidies.
• $2.7 million is provided to reduce wait lists for home support for seniors and persons with disabilities.
• $1.7 million will be invested to add new medications to the Provincial formulary such as medications to treat Alzheimer's, anemia from cancers, among other disorders.
• $1.5 million is allocated to address growing demand for services at existing sites. Government will proceed with 3 new renal dialysis units on the Burin Peninsula, in Happy Valley-Goose Bay and in St. Anthony.
• $3.7 million is provided to support implementation of the Provincial wellness plan Go Healthy, an increase of $1.3 million this year.
• $1.0 million is allocated to enhance primary mental health services.
• $1.0 million is provided to add 9 new addictions counsellors and to respond to needs identified in the Gambling Prevalence Survey.
• $4.6 million is allocated to strengthen public health including hiring 39 public health nurses over the next two years and enhancement of animal health services.
• $11.2 million is invested in new hospital and long term care equipment including the construction of the two bunkers for the radiation units and $1.2 million for the new dialysis sites.
• $4.1 million has been allocated to improve the effectiveness of the children's Dental Program to ensure children are able to take full advantage of the program.
• $651,900 is provided to increase the rate paid to caregivers of children in care by 15% over the next 3 years, beginning with a 5% increase this year.
• $227,000 is provided for alternate family care providers, who care for persons with developmental disabilities, to receive an increase of 15% over the next 3 years.
• $350,000 in funding to provide coverage of pediatric enteral nutrition for children with severe bowel diseases, such as Crohn's and Colitis.
• New funding is provided to enable people, for the first time, to benefit from in vitro fertilization procedure without having to leave the province.

Charts

• Summary of Current Revenues (By Source) - Where the Money Comes From (PDF)
• Summary of Current Account Expenditures (By Function) -
  Where the Money Goes (PDF)
• Summary of Gross Capital Account Expenditures
  (By Function) (PDF)
• Summary of Gross Government Expenditures - Current and Capital (By Sector) (PDF)
• Summary of Budgetary Financing Sources (For Gross Current and Capital Account Expenditures) (PDF)