Wednesday , January 20 2021

From "on the Edge" to "Brighter Future": pre-election NL Budget touts improving prospects



Three years after taxpayers at Newfoundland and Labrador were warned that the fiscal sky of the province is falling, they are now being questioned with good news before going to the polls.

"In 2016, our government had no choice but to make difficult decisions," said Finance Minister Tom Osborne on Tuesday afternoon at the House of Parliament.

"None of us wanted to do it, but it was necessary to respond to the financial crisis faced by Newfoundland and Labrador."

Just months after taking office, Bol's government faced a $ billion deficit by bringing in a series of tax increases – including income taxes, sales taxes, gas taxes – and added fees for everything from hiring until match up to dispatch.

Osborne said that "our province was on the verge" at the time.

But now?

"Today, our financial prospects are greatly improved."

This means that this year's tax will not increase.

And Bol's government plans to return some money into the pockets of taxpayers who started removing them three years ago.

The budget confirms that there is no car insurance tax – a $ 60 million decision this year.

It then follows a pledge of affordable electricity in the future, after the Muscadd Falls will come to the stream.

And the price to reduce the deficit is still on schedule until the end of 2019.

A treaty agreement means a huge surplus

Perhaps the most nauseous, after years of red ink, the province is forecasting a surplus of $ 1.9 billion this year.

But in order to come up with that number, the government reserves revenue that it will not receive for years or even decades under the recently released agreement with the Atlantic Treaty with Ottawa.

The net profit of that arrangement, which lasts until 2056, is $ 2.5 billion.

Only 134 million dollars of that cash will actually flow this year.

But since annual payments are guaranteed with fixed amounts, government officials say that their handling of the agreement is in line with public sector accounting standards.

The budget of Newfoundland and Labrador from 2019 predicts a surplus of 1.9 billion dollars. The province will again notice a significant deficit, with the exception of the revenue collection decision that it will not receive for years or even decades under the new Atlantic Treaty. (Fred Hutton / PSC)

Osborne told reporters that it was not his choice to do things this way.

"It's an accounting system, accounting accounting," he told reporters.

"I would like to see this cut off our deficit next year and the year afterwards to help us with a surplus every year. In fact, I argued with the financial officers in the department, but this is the system we use, that's a calculating accounting. That's what it is. "

Without prompting the deal, Newfoundland and Labrador again will have a significant deficit this year, about $ 575 million.

Spending is the budget to keep growing, to just over $ 8.4 billion.

Planned balanced budget for 2022

The province insists it is still on track to balance the budget by 2022.

Prior to this, the deficit is projected to return to about $ 800 million in 2020.

Heavy lifting associated with large planned reductions will not occur until next years.

To balance the books, the province says it will spend $ 600 million less in 2022 than this year.

There is no tax increase in the budget of the Newfoundland and Labrador provinces of 2019. (Fred Hutton / PSC)

St. John's Financial Analyst Larry Short, who attended pre-budget briefings with PS reporters, says the plan does not apply to cost control.

"There are no major cost cuts, no long-term talk," said Short.

"The budget is based on the fact that the belief is that oil will continue to be our main source of revenue for the province for the future."

Short said the budget lacks details on how the government will turn the province into an economy after oil.

Selection only a few weeks

A few hours before the Liberal Liberal Finance Minister was in the legislature that conveys his budget speech, the bus for Tory bus was parked outside.

Osborne's speech on his financial plan touched this political battle.

"While I see the faces from this side of the House of Parliament, I see a unified MHS team under the leadership of a prime minister who has a vision of the province that we all move behind," Osborne told the House.

The budget will almost certainly not pass before the voters go to the polls.

The temporary supply bill has already given the government the power to spend the money by the end of June.

Read more articles from CBC Newfoundland and Labrador


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