Cuts, cancellations lead budget

Date: Mar. 30, 2004
ST. JOHN'S — The Progressive Conservative government is cutting jobs, cancelling construction projects and closing some offices in an effort to bring the provincial deficit under control. Finance Minister Loyola Sullivan announced details of his $4.26-billion budget Tuesday.

The government plans to cut 4,000 positions during the next four years. That includes 700 jobs this year. Sullivan says retirements and a regular turnover in jobs should keep layoffs to a minimum.

"The people of Newfoundland and Labrador understand that we have reached this critical point in our history as a province of Canada and that government must act now to put its fiscal house in order," he told the legislature.

With the student population dropping, another 265 teaching positions will be eliminated over two years as the Department of Education moves toward a teacher allocation formula proposed in the 2000 Sparkes-Williams report. If the formula were to be followed this year, an additional 109 positions would be cut, the government says.

Provincial government site: Budget 2004
To save $6 million a year, the number of school boards will be cut from 11 to five in time for the new school year in September. At the post-secondary level, tuition will remain frozen, but Memorial University and the College of the North Atlantic have been told to find $2 million each in savings.

The government plans to reduce the number of health care boards from the current 14 over the current year, but the budget doesn't say how many boards will be left after integration. There also will be a review of where health services are provided around the province.

To cut costs, the province is closing the Salmonier correctional institution, a 10-bed unit at the Whitbourne youth correctional centre and 20 offices of the Human Resources, Labour and Employment Department.

Related coverage: Budget provokes outrage, anxiety
The Rooms, which will house the provincial museum, art gallery and archives in St. John's, won't open this year, saving the government $2 million. The museum will stay in its current buildings for a year, and the archives will provide services, but the gallery will be closed until 2005.

The Tories have cancelled construction of a new school in L'Anse au Loup and new health care facilities in Grand Bank, Grand Falls-Windsor and Gander. They've also delayed other projects, including the redevelopment of Herdman collegiate in Corner Brook and an auditorium for the new Mealy Mountain high school in Happy Valley-Goose Bay.

Municipalities will take a hit as their operating grants are cut by $5 million over three years. The province says larger towns and cities will bear the brunt of that cut. Despite the cuts, the government is forecasting a total accrued deficit of $839.6 million in the coming year.

In December, a report by PricewaterhouseCoopers estimated the figure would be $989 million without cuts. On the revenue side, tobacco taxes are going up Wednesday: cigarettes will go up one cent each and loose tobacco is going from 15 cents a gram to 20 cents a gram.

The government says many fees haven't increased since the mid-1990s, but that's changing this year. Some of the hikes include:

• Drivers' licences up $20.
• Vehicle registrations up $40.
• Trout fishing licences up $2

As announced in the throne speech, 75 police cadets will be trained at Memorial University for the Royal Newfoundland Constabulary by 2008. With retirements, it will cost $2.5 million to put 45 new officers on the force.

The RNC and RCMP will get another $1.5 million for equipment and training, the Constabulary is getting $300,000 this year for new vehicles. The budget includes increased spending in several areas.

As a result of the inquiry into the police shootings of Norman Reid and Darryl Power, $1 million is being set aside for community mental health services. The prescription drug program is going up by $8.6 million.

Next year, the PCs will bring in a low income tax credit. Individuals with a net income less than $12,000 and families with less than $19,000 a year won't pay provincial income taxes. The cost will be $5.3 million.

Despite delaying the Rooms, the government will spend $1 million more on tourism development, bringing the amount to $7 million.

Related CBC links:

• Indepth: Newfoundland and Labrador Budget 2004

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