N.L. delivers pandemic-delayed budget with $1.84B deficit, punts tough decisions to 2021
Impacts of COVID-19, oil price collapse weigh on provincial treasury
The Newfoundland and Labrador government has tabled a pandemic-focused budget with no financial projections beyond the next six months, and decisions on potentially painful structural changes to address a deteriorating financial situation punted to next year.
Finance Minister Siobhan Coady told reporters Wednesday it is a "stable budget in unstable times," and referenced the lyrics of the provincial anthem in outlining the current situation, and the challenges ahead.
"The Ode to Newfoundland states, 'When blinding storm gusts fret thy shore, and wild waves lash thy strand, thro' spindrift swirl, and tempest roar, we love thee, windswept land,'" Coady said.
"Our financial situation is a blinding storm; we are in the middle of a tempest. We sing this anthem with pride and deep understanding of its importance. With that same determination, with that same resolve, with that same pride we will take hold of the financial structures that bind us, we will demand the financial stability of this place we so love, we will ensure the future generations they too will know the meaning of 'Where once they stood we stand.'"
The 2020-21 deficit is projected to be slightly better than previous estimates, at $1.84 billion. The most recent update two months ago had pegged that number more than $300 million higher.
Revenues related to a rebound in oil prices and unexpected federal COVID-19 funding combined to reduce the deficit estimate.
Projected expenses remained basically the same compared to the last update, at just under $9 billion. About a half-billion of that is directly related to the province's pandemic response.
"This is the first budget for Newfoundland and Labrador in the world of a global pandemic," Coady said in her budget speech.
"Together, we face the global pandemic as we always face adversity — with diligence, with integrity, and with compassion. It is with this same strength that we will address our financial situation."
But any big decisions on structural changes to ensure that financial stability will wait until next year, after an economic recovery team led by Moya Greene makes recommendations to the government. Greene is a Newfoundlander whose long business career includes a stint at the helm of the Royal Mail in the United Kingdom.
The Furey administration also has another task force in the works, this one on health care, focused on delivering a 10-year health accord.
"We must work to find ways to reimagine health system delivery to help reduce costs and eliminate waste while improving services to meet the province's health needs," Coady said in her budget speech.
Support for small businesses, artists, musicians
While there are no sweeping structural changes in the budget, there are relatively smaller-ticket initiatives in the works to help a variety of groups.
A $30-million program will be introduced to help small businesses and community organizations deal with the fallout of COVID-19.
Professional artists and musicians affected by the pandemic are also targeted for a boost, as they will be included in an expanded tourism and hospitality support program. ArtsNL will also get a $1-million hike in its budget, and craft brewers will benefit from $1 million in discounts.
There is $2.1 million targeted to boost immigration targets, with a goal of bringing 2,500 permanent residents to the province by 2022.
The insulin pump program will be expanded, and 14 new drugs will be covered under the province's prescription drug program.
One big promise is also on track to become a reality.
A $25-a-day child-care program will be introduced next year. That was a key plank of Premier Andrew Furey's successful run for the provincial Liberal leadership this summer.
Tobacco, vaping taxes on the rise
The government will not dip much more into your wallet, except for small increases to some so-called "sin" and transport taxes.
There will be a 20 per cent tax brought in on vaping products. Tobacco taxes are also going up — five cents per cigarette and an additional 10 cents per gram on fine cut tobacco.
The price of gasoline will increase slightly, by 0.21 cents per litre, while diesel will go up by 2.68 per cents per litre. These changes will take effect on Thursday. The province linked the hikes to a federally mandated increase in carbon taxes.
But the budget holds the line on other revenue-gathering measures.
There are no increases to corporate or personal income taxes.