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April

14, 2016

HOUSE OF ASSEMBLY PROCEEDINGS

Vol. XLVIII No. 13

The

House met at 2:00 p.m.

MR. SPEAKER (Osborne):

Order, please!

The

hon. the Minister of Finance and President of Treasury Board.

MS. C. BENNETT:

Mr. Speaker, I move,

seconded by the Premier, that this House approves in general the budgetary

policy of the government.

MR. SPEAKER:

The motion is that this

House approves in general the budgetary policy of the government.

The

hon. the Minister of Finance and President of Treasury Board.

MS. C. BENNETT:

Thank you, Mr. Speaker.

Before

we begin today, I'd like to take a moment for the people and the community of

Bay de Verde.

This

week, a devastating fire destroyed their fish plant and brought impacts to

surrounding homes and businesses. Our Premier, and Ministers Crocker and Joyce,

saw first-hand the impacts of the fire yesterday, and while meeting with the

company, the council and the residents, they witnessed something else

resilience. Our government is going to stand behind them.

That

community has come together to support the people impacted by the devastating

event. They are a prime example of the resilience of every Newfoundlander and

Labradorian, and just as we know the people of Bay de Verde will persevere, we

know that all Newfoundlanders and Labradorians will rally together and endure as

we deal with unprecedented fiscal challenges ahead of us.

Restoring Fiscal Confidence

and Accountability

Mr.

Speaker, today, in our government's first budget, we are laying out a fiscal

plan that allows our province to regain control of government finances. It is a

credible plan, with clear objectives, transparent goals, and targets to which we

will hold ourselves accountable. It is critical that we do so. The uncontrolled

growth in expenditures, the dramatic fall in revenues and oil production,

exacerbated by the poor decision making by the previous government have

produced a serious and unsustainable imbalance that must be corrected. Without

the actions outlined here today, we risk increasing our debt to unsupportable

levels and we jeopardize our long-term economic growth. For the well-being of

future generations, we have no choice but to take bold actions beginning today.

The

choices we have made are not easy and every Newfoundlander and Labradorian

wherever they live and whatever services they use will have to be part of the

solution. Indeed, some will have to do more than others, to ensure we mitigate

impacts on the most vulnerable in our communities. Something our government is

determined to do.

Where We Are

Our

government is committed to updating the people of Newfoundland and Labrador on

our province's fiscal state on a regular basis. On December 22, 2015, armed with

the most current fiscal and economic information we had available, we told the

people of the province that the fiscal situation of the province had worsened

and was worse than the $1. 1

billion deficit budgeted and that the forecasted deficit for 2015-16 could be

almost $2 billion.

Our

government knew it was important that Newfoundlanders and Labradorians have a

thorough understanding of the reality so we could begin to work together on

solutions. Since that time, further declines in offshore royalties, the deficit

for 2015-16 is now expected to be $2.2 billion.

The

continued decrease in oil royalties has also increased our projected deficit for

the upcoming year, from our fiscal update, from $2.4 billion to $2.7 billion if

no action had been taken.

We are

part of a dynamic, yet volatile global economy that demands government be

equally dynamic. We must shift our view of budgeting from an annual exercise to

a monthly, weekly, and even daily part of government business.

Immediate Actions

After

updating the people of the province on the fiscal challenges we were facing, our

government implemented a series of immediate actions designed to realize

savings.

Restrictions were placed on hiring and the use of consultants, discretionary

travel and non-essential spending was eliminated and the reallocation of savings

was restricted.

Line-by-Line Analysis

addition to the immediate measures announced in December, the Treasury Board

embarked on a comprehensive line-by-line review of the budgets of all government

departments and entities. This type of thorough, detailed and comprehensive

analysis of every budget item helped us reduce unnecessary expenditures, find

efficiencies and drive further savings for the people of Newfoundland and

Labrador.

Mr.

Speaker, because of our government's action and a detailed approach to managing

expenses, no matter how small, in just over 120 days, we have been able to

achieve $113 million in savings as a result of the comprehensive line-by-line

review. Savings come from reductions due to eliminating vacant positions,

delayed recruitment, reduction in discretionary spending and reviewing operating

and program expenses in departments and bringing them in line with historical

spending.

How We Got Here

Mr.

Speaker, the fundamental problem of poor planning and management, as identified

by the Auditor General and others, and the inability and inconsistency of the

former administration to manage a fiscal plan, has left our province dealing

with an unprecedented deficit; unprecedented borrowing requirements; and

unprecedented fiscal pressures.

Specifically: the former administration failed to plan for the loss of revenues

from lower oil production. Spending was based on faith, not on facts. Facts like

oil production was in decline. For years, many knew this province would

experience peak oil production in 2007 based on proven recoverable reserves.

They

failed to plan for the possible loss of revenues due to volatile oil prices. In

January of 2008, oil prices peaked at $144 U.S a barrel. Since January, the

average price of oil has been $35 U.S. per barrel. $140 oil is only a distant

memory now. To solve the current deficit the price of would have to be $148 U.S.

Previous budgets made long-term decisions based on short-term and volatile

revenues, decisions like tax breaks and other measures that could not be

sustained. This year, we are forecasting the price of oil at $40 U.S.

Spending has not been managed. Over the past 10 years the previous government

spent at a rate that was 20 to 36 per cent, per capita higher than other

provinces. By planning six deficits in the past 12 years, while unpredictable

oil royalties grew, the former administration built a culture of spending in the

absence of good fiscal planning.

Quite

frankly, they increased spending beyond what our province can afford. They

failed to manage our debt. Since 2004, taking into account crown corporations,

they doubled the total public sector debt to a record $15 billion.

The

result of the failures in planning and management have become structural and

entrenched.

The

previous government's willingness to mortgage our future has left our province

facing the biggest deficit and highest net debt ever recorded in our history.

As our

Premier had said, knee-jerk reactions have created mistakes that, unfortunately,

Newfoundlanders and Labradorians are paying for now. Band aid solutions will not

fix the challenges we will face. In this fiscal year, debt expenses already

exceed the estimates for the entire Department of Education and Early Childhood

Development.

It is

impossible for us to be satisfied that we will spend more on debt expenses than

we do on educating our children.

Where we are headed

The Economy

The

impacts of poor planning by the previous administration, coupled with commodity

price decreases will and are impacting our economy.

While

economic activity remained at high levels in 2015, many indicators reported

declines. Real GDP fell by 2.3 per cent as oil production fell by 20.5 per cent

due to lower output from all three projects Hibernia, Terra Nova and White

Rose. Investment also declined by 8.1 per cent as higher spending on Muskrat

Falls development was offset by lower spending on Vale's nickel processing

facility in Long Harbour, the Hebron project and residential construction.

Employment fell by 1 per cent and the unemployment rate increased by 0.9

percentage points to 12.8 per cent in 2015.

Economic activity in the province has been expected to slow over the next few

years due to the winding down of the development phases of the Hebron and

Muskrat Falls projects. The decline in commodity prices further weakened the

economic outlook. Development of several projects in the resource sector have

been deferred or delayed, such as the West White Rose Extension, the Alderon

iron ore and Bay du Nord, due to lower commodity prices.

such, the economy of the province has entered a period of adjustment that is

expected to last for several years. This year, while real GDP is forecasted to

grow due to a rebound in oil production, other important main economic

indicators such as employment and real household disposable income are expected

to decline. Beyond 2016 the outlook points to further declines in economic

activity.

Beyond

2016, economic growth is expected to be curtailed by a combination of factors,

including declines in capital investment as major projects move beyond peak

development and the requirement for further provincial deficit reduction

measures. Most main economic indicators are expected to be lower in 2021 than

current levels. Several major economic indicators like employment and real

compensation of employees will be lower by 15 per cent and over 22 per cent

respectively when compared to 2015 levels. Provincial deficit reduction measures

are estimated to account for 40 to 50 per cent of the predicted declines in

these broad measures of economic activity.

While

the short to medium term outlook is challenging, there remains significant

long-term potential in the Newfoundland and Labrador economy, particularly in

the energy sector. There are substantial oil and gas resources in the waters off

Newfoundland and Labrador. This is evidenced by the 2015 recourse assessment of

11 parcels in the Flemish Pass. This region alone, which covers less than two

per cent of the province's 1.5 million square kilometre offshore area, is

estimated to have a resource potential of 12 billion barrels of oil and 113

trillion cubic feet of natural gas.

Land

sale results in 2014, and more recently in November of 2015, show industry's

confidence in the offshore potential. In December 2014, the bid on one parcel in

the Flemish Pass by ExxonMobil, Suncor Energy and ConocoPhillips was $559

million, the highest bid ever on a land parcel in the Newfoundland and Labrador

offshore area. In November 2015, seven parcels were awarded in the Flemish Pass

basin with a total work commitment of $1.2 billion.

Deepwater exploration and development hold many opportunities for future growth

in oil production, and by extension, the provincial economy.

Our

province's natural resources hold many opportunities and we are optimistic about

these opportunities. However, we must act, plan and budget based on facts.

Nalcor

As the

province's energy corporation, Nalcor belongs to every citizen of Newfoundland

and Labrador. Since its creation in 2007, taxpayers have invested over $2.25

billion yet have received no dividends. For all corporations and their

shareholders, this would be unacceptable.

The

previous administration slowed Nalcor's organizational structure, compensation

and benefits packages to grow beyond what taxpayers would consider reasonable,

particularly given our current fiscal and economic circumstances.

Through

Budget 2016, initial steps have been taken to identify operational savings at

Nalcor approximating $6.7 million. However, due to prior year commitments by the

former administration, the required equity the province will need to invest in

Nalcor this year is $1.3 billion, bringing the total investment by the people of

the province to $3.6 billion.

Further

actions will be taken to maximize the return on investments made by our

province. Like government departments and public entities, Nalcor will be

expected to take a zero based budgeting approach to their administration and

operations effective with Budget 2017. The Nalcor Board will be directed to

review their operational structure to achieve efficiencies and develop a plan to

bring their compensation, benefits, and gender equity policies more in line with

similar positions in other public sector bodies.

Work at

the Muskrat Falls powerhouse is significantly behind schedule. Faced with these

schedule delays and expected cost increases on the project a concern to all of

us government is doing and will continue to do everything possible to help get

this project back on track.

Borrowing

But,

Mr. Speaker, these opportunities are in the future. As I've said earlier, based

on the status quo, had we done nothing, the projected deficit for the province

in 2016-17 would have been $2.7 billion. Given the actions announced today, we

have been able to cut the projected deficit by one-third.

The

actual budgeted deficit for 2016-17 is now $1.8 billion.

Our

government needs to ensure that money can be borrowed, at the lowest cost, to

pay for vital programs and services that Newfoundlanders and Labradorians

require.

It is

clear that our government's commitment to action in dealing with the fiscal

situation is allowing Newfoundland and Labrador to secure long-term financing.

In spite of the challenges facing our province fiscally and the limits in the

long-term bond market in Canada, our government has secured long-term financing

since January of just under $2 billion.

Stronger Fiscal Management

Today,

Mr. Speaker, our government is presenting the people of Newfoundland and

Labrador with our credible plan forward. We are establishing clear targets for

future years and laying the blocks for building the foundation for the future.

The

path to surplus must be taken in consideration of the impacts our decisions will

have on the overall economy. With this in mind we are planning, and holding

ourselves accountable to return to a surplus position in seven years.

ensure Newfoundland and Labrador is positioned to return to a surplus position

in Budget 2022, the Provincial Government has implemented a series of fiscal

targets as part of Budget 2016, including: borrowing targets that over the

seven-year period will require $8.2 billion in new debt, compared to $17.6

billion if nothing had changed; the net debt as of March 31, 2023, will be

targeted to be $16.5 billion, compared to $27.3 billion if we did not take

definitive actions; and, instead of a deficit of $1.9 billion, if no action was

taken, we are now targeting a small surplus in 2022-23.

addition, our government has taken a prudent approach and we have budgeted $125

million in risk adjustment to protect against adverse impacts from commodity

price fluctuations and volume. Newfoundland and Labrador is at a critical

juncture and unprecedented circumstances require unprecedented responses. The

people of our province, every one of us, feels this burden together and we are

all prepared to participate in the solutions.

Actions, in the face of adversity, define leadership. Our Cabinet feels strongly

that during these fiscally challenging times, we intend to demonstrate

leadership. That's why I'm here today, under the thoughtful leadership of our

Premier, to announce that our first action as part of Budget 2016 will be to

reduce cabinet ministers' salaries by 10 per cent.

How we get there

Engagement

When

difficult decisions have to be made, strong leaders know the importance of

listening to and engaging the public. That's exactly what our government did

through the Government Renewal Initiative.

People

across Newfoundland and Labrador embraced opportunities to address our

province's fiscal challenges like never before and have responded in

unprecedented ways to share their ideas.

More

than 1,000 people participated in 26 sessions since January. This included the

general public, communities, the public service, labour unions, businesses and

other groups. As a result, there have been several thousand ideas offered online

and hundreds of submissions have been received by mail, phone, email and fax.

March, we released the What We Are Hearing document, which provided valuable

insight on the needs of the people of the province and assists government in

addressing the province's fiscal challenges. Some of the themes included:

introducing new or increasing existing taxes and fees, the sale of government

assets, including land and buildings, as a way to cut costs and raise revenues;

health care reform to increase efficiency and access to health services; and

increasing efficiency throughout government departments by making better use of

technology.

In each

session we asked specifically what is the one thing you want government to

remember when making decisions? The answers included: act now, don't delay; have

the guts to make the tough decisions; don't be restricted by promises made

during the election; offer alternative work arrangements; leave politics out of

the decision-making process; partner to deliver programming with non-profit and

private sectors; stop waste and treat money as if it were your own.

Our

job, as government, is to listen to those ideas, provide the evidence to support

our actions and then act.

Government Renewal

Initiative

Beginning in January, the Government Renewal Initiative, which is a multi-year

effort to re-engineer our programs, services and deliver systems to ensure they

are viable now and into the future, was undertaken.

addition to public engagement efforts, to further address the deficit, all

government departments, agencies, boards and commissions were asked to identify

potential options for savings and present options to reduce expenditures by

thirty per cent in three years.

Lead by

the Government Renewal Secretariat, analysis of the options identified for

savings led to proposals that were submitted for consideration. Each proposal

was assessed on its own merit, taking into consideration a variety of things.

The

Government Renewal Secretariat also assessed the cumulative impacts of the

Government Renewal proposals across client groups, sectors and communities. This

analysis also included impacts resulting from new revenue measures and fee

increases, and helped to inform Cabinet's decisions.

A full

list of the decisions made through this phase of the Government Renewal

Initiative can be found online on the Government of Newfoundland and Labrador

website. These decisions have resulted in $130 million in savings in this year's

budget, and will generate $189 million in savings on an annualized basis.

Today's

budget outlines the decisions resulting from both the line-by-line review and

the Government Renewal Initiative.

Some of

School Board to save $1.2 million annually on office rental; changing ferry

schedules and increasing ferry fees for annualized savings of $3.5 million, and

we continue to subsidize ferry operations at a rate of 91 per cent; reducing the

operational grant to the Research and Development Corporation by $3.2 million;

reducing the regular operational grant to Memorial University by $14 million;

reducing advertising budgets for a variety of departments and crown

corporations; saving approximately $1.3 million annually by restructuring the

court system. This will be achieved in consultation with the judiciary.

Reducing the grant portion and increasing the loan portion of the Student

Financial Assistance for Newfoundland and Labrador students, including medical

students, for annual savings of $5.5 million; identifying cash management

opportunities in various entities that will allow surplus cash to be used to

lower our borrowing; increasing class size caps for Grades 4 to 12 saving $8.8

million annually; removing coverage in the Newfoundland and Labrador

Prescription Drug Program for over the counter drugs and introducing limits to

diabetic test strips that are consistent with national guidelines for annualized

savings of $5.5 million; increasing the dividend being paid to the government

from Newfoundland and Labrador Liquor Corporation by an additional $3 million

but cutting expenses in the corporation; reorganizing units within some

departments, and closing some government offices. All affected locations will be

informed of these decisions by no later than tomorrow, after which time all

office locations will be made public.

In just

over 120 days, the Government Renewal Initiative and our line-by-line review has

saved $243 million in 2016-17, annualizing to $251 million. Taking into account

entities and accrual adjustments, the impact on the deficit in 128 days is $282

million in this fiscal year.

preparing for Budget 2016, it was important to identity a combination of

measures to reduce expenditures and increase revenue.

Revenue

series of new or increased tax measures and fee changes are being implemented

today. During our consultation process, input from Newfoundlanders and

Labradorians clearly pointed to increasing taxes and fees as a way to address

the unprecedented fiscal situation. Total revenue in 2016-17 will be $647

million annualizing to $882 million.

Effective April 15, tobacco taxes will increase by one cent per cigarette and by

two cents per gram of fine-cut tobacco products, raising additional revenue of

$5.5 million.

Several

tax changes will take effect July 1, 2016.

increase revenues by $204 million annually, it is necessary to increase Personal

Income Tax rates for all income ranges. However, Newfoundland and Labrador rates

remain competitive in Atlantic Canada.

The HST

rate will increase 2 percentage points, generating, on an annual basis, $224

million.

The

Retail Sales Tax on Insurance Premiums is being re-introduced at a rate of 15

per cent and will generate annualized revenue of $111 million.

The

Insurance Companies tax will increase by 1 percentage point, increasing revenues

by $16.9 million.

Effective January 1, 2016, the Financial Corporations Capital Tax Rate and the

general corporate income tax rate, will increase 1 per cent and the

Manufacturing and Processing Profits Tax Credit will be eliminated, generating

additional annual revenues of $31.8 million.

Another

measure this government is implementing is fee changes on an annualized basis,

total fee changes are projected to raise an additional $19.3 million, this

includes the introduction of 50 new fees and the modification of a further 300.

Temporary tax measures

Our

plan will ensure Newfoundland and Labrador will not face these challenges

forever. That's why, through Budget 2016, we are implementing some temporary tax

measures.

Deficit Reduction Levy of up to $900 annually, depending on your taxable income

will be implemented. Individuals with taxable income of $20,000 or less will be

exempt. That levy will come into effect July 1, 2016. Revenue from the temporary

tax will be $74.8 million in 2016-17, annualizing to $126 million.

In 2018

we will begin the phase out of this temporary tax.

Effective June 2, 2016, gasoline tax will temporarily increase by 16.5 cents per

litre. This tax increase will be reviewed ahead of the Fall 2016 supplemental

budget. That's effective June 2, 2016. The tax rate on diesel products will also

increase by 5 cents per litre and the tax rate on aviation fuel will also go up

by 1.8 cents per litre. Taxes on Home Heating fuel will not change. The total

projected annual revenue for these measures is $142.8 million.

Tax Fairness

Increasing taxes is not something our government wants to do but it must be

done in light of the deficit created by the lack of planning by the former

administration.

ensure the impact of the tax burden is reduced for the most vulnerable, Budget

2016 includes $63.7 million annualized for the delivery of enhanced benefits to

help reduce the impact of additional measures on low income seniors,

individuals, families, and persons with disabilities. The Newfoundland and

Labrador Income Supplement will be paid to those eligible in quarterly

installments. Eligibility will be based on family net income. We are investing

$12.7 million to enhance the existing Seniors' Benefit.

addition, the Provincial Government is investing $3 million to increase the

monthly fuel allowance to eligible income support clients.

Tax Review

Tax

increases must be balanced with tax competitiveness. During our mandate,

government will be completing a comprehensive independent review of the tax

system.

The

Federal Government has also announced their intention to conduct a review of the

Canadian tax system, looking at tax fairness. The Newfoundland and Labrador tax

system review will take place after the federal government completes their

review and after the 2017-18 provincial budget.

Investments

Our

government is facing a financial challenge like no other and we are taking the

actions necessary to get spending under control and increasing revenues.

However, we also know the importance of targeted, strategic investments.

That's

why we are investing funds through Budget 2016 to diversify the economy.

Fisheries

The

seafood industry is an economic mainstay and vital to our rural economy. We are

investing $2 million in a new Seafood and Aquaculture Innovation and Transition

Program supporting technology and innovation in harvesting, processing,

aquaculture and marketing with a focus on transitioning to ground fish. As well,

government is allocating $100,000 to establish a Fisheries Advisory Council to

provide industry stakeholders with the opportunity to offer advice on present

and emerging issues in the fishing industry. The Council will play a key role in

the creation of a strategic action plan on cod revitalization.

Forestry and Agrifoods

Budget 2016, government will follow through on its commitment to develop a new

food security and agriculture growth strategy and will support the Newfoundland

and Labrador Federation of Agriculture in maximizing opportunities for

development by working to leverage federal funding.

The

Provincial Government will also continue its commitment to Growing Forward 2, a

five-year federal-provincial territorial cost-shared initiative.

Rural Broadband

Our

government believes that high-speed internet is essential infrastructure in

Newfoundland and Labrador. Through Budget 2016, we will be investing $2 million

for broadband infrastructure over the next two years.

Tourism

Recognizing the importance of tourism and culture and heritage to economic

development, our government is investing $13 million for tourism marketing as

well as $18.5 million to support culture and heritage initiatives .

We are

also investing through Budget 2016 to improve social outcomes.

Education and Early

Childhood Development

The

Provincial Government will invest over $13 million annually for the

implementation of full-day Kindergarten beginning in September 2016, which

includes hiring approximately 142 new teachers and providing additional student

assistants.

$277,000 will be allocated to implement the Premier's Task Force on Improving

Educational Outcomes to examine the K-12 system and focus on improving outcomes

for all children in Newfoundland and Labrador, including our Aboriginal

children.

$1.4

million is provided for an additional 27 teaching units for inclusive education.

Health

Health

and Community Services accounts for the largest spending in government and we

know there are efficiencies and savings to be found in the health and community

services system. There are also critical programs and services we must continue

to invest in.

Budget 2016 we provide: Approximately $3.5 million for new service options for

seniors requiring enhanced care. This funding will provide up to 100 subsidies

to support the placement of select individuals with enhanced care needs in

personal care homes; Approximately $2.6 million for coverage of a number of new

drug therapies under the Newfoundland and Labrador Prescription Drug Program.

These drugs are presently under review by the national and regional review

agencies. This investment will also offer beneficiaries of the program a range

of new treatment options; $2.5 million to further planning and design of a new

facility to replace the Waterford Hospital; $8.5 million to support the

continued planning and design of the new Western Memorial Regional Hospital; $2

million to plan for long-term care in the Western and Central regions.

Justice and Public Safety

Through

an investment of $1 million over two years, renovations will be made to expand

the capacity of the Family Court in St. John's, resulting in more cases being

heard and fewer delays.

We are

investing $100,000 for the external review of the Office of the Chief Medical

Examiner. This external review is intended to identify where any potential

deficiencies lie within the Office of the Chief Medical Examiner with an aim to

improving the system.

Seniors, Wellness and Social

Development

Budget

2016 commits $500,000 to establish an Office of the Seniors' Advocate.

Infrastructure Planning

recognize the need to balance affordability with strategic infrastructure

spending, that is why this year we are investing $570 million on infrastructure.

Included are transportation projects, health care initiatives, school

infrastructure both K to 12 and post-secondary and Newfoundland and Labrador

Housing projects.

We will

also invest in priority municipal infrastructure projects, as well as leverage

federal and municipal dollars to fund water and wastewater treatment, water and

sewer projects, municipal buildings, street improvements and recreational

facilities.

All

these projects will support jobs in our province as well. This is an important

element of infrastructure spending.

The

Provincial Government has also chosen to defer some infrastructure projects

based on further analysis.

Having

a plan to invest our money wisely, through strategic infrastructure projects as

an example, allows us to keep more people employed and that has a positive

impact on our economy.

Workforce of the Future

The

sheer magnitude of the financial challenge that we are facing is immense. We

must, and the people of the province expect us to, look at every avenue for

savings.

We are

eliminating approximately 450 Full-Time Equivalents in the Agencies, Boards and

Commissions. It is hard to pinpoint the exact number of people that will be

impacted as Full-Time Equivalent is not a position. Planning work on the exact

impacts continues in the Agencies, Boards and Commissions.

In core

government, we are eliminating approximately 200 positions; of that 125 people

will be impacted directly. Approximately 30 per cent of those are management or

non-union positions. As is always the case, the final number of people impacted

will not be known until the conclusion of the process.

Upcoming retirements present an opportunity and we continue our commitment to

using attrition as a preferred means to reduce the workforce. We want to

minimize job losses and keep people working.

Our

government will not be offering early retirement incentives as a method of

workforce reduction. We must focus public money on delivering critical public

services that are needed by the people.

Medium and Long-Term Actions

Given

the seriousness and scope of the current and forecasted fiscal situation, a new

approach is required that moves beyond the traditional single year budget

efforts.

Budget

2016 contains decisive actions, and will be followed by more actions in a

supplemental budget later this fall in conjunction with the Fall Fiscal update.

In the

medium-term, our government will be looking at several measures to find

efficiencies and generate revenue for our province, including: a government

procurement initiative to replace the current Public Tendering Act that will

help government achieve the best value for services; a real estate asset

management plan to ensure we review government's real estate portfolio and

determine how best to enhance its public value; a community grants approach to

set multi-year funding models for groups and allow for collaboration with

private donors to leverage more funding; a continued focus on improving health

care outcomes, through better management, achieving efficiencies, reducing

waste, and taking advantage of technology.

We will

also move forward with Phase 2 of the Government Renewal Initiative. We have

identified a number of policy options to further reduce expenditures, including:

government and departmental reorganization; efficiencies through major program

review and redesign; consolidation of functions within the public sector; and,

partnerships with the non-profit and private sector.

Legacy Fund

Our

government promised the people of Newfoundland and Labrador better management

and real leadership.

That

commitment is built on the realization that we have to carefully plan for the

difficult times.

This

government is planning for the future; we are putting the provisions in place so

that future generations will never have to weather a financial storm like the

one we inherited from the previous administration.

Our

government will establish a Diversified Wealth Fund once we have moved back into

surplus. We will put the necessary framework in place by bringing forward

legislation during our mandate. The legislation will be designed to prevent any

future governments from leaving our province in the fiscal situation we find

ourselves in today.

Financial Accountability and

Transparency

As we

continue toward reshaping Newfoundland and Labrador's fiscal future, we must

ensure we build a solid performance-based planning and monitoring framework

which provides greater financial accountability and transparency.

Treasury Board colleagues and I will be working meticulously to enhance

financial accountability and oversight of Departments, Agencies, Boards and

Commissions as well as Crown Corporations. The objective is to enhance

accountability for achieving key performance indicators while ensuring

multi-year fiscal objectives, as laid out in Budget 2016, are achieved.

Immediately following the announcement of Budget 2016, our government will

continue the planning process for our supplemental budget later this year when

we will announce more actions identified through the Government Renewal

Initiative. And further actions will also be identified as part of Budget 2017

next year.

preparing for Budget 2017, we will be implementing a zero-based budgeting

approach. Meaning, we will be building all department and entity budgets from

the ground up. We will be ensuring departments and entities have adequate

funding to deliver core programs and services that are important and provide

value for taxpayers while at the same time ensuring we can clearly measure key

performance outcomes and strive for greater efficiency.

Our

government will be expanding the role, as well as composition, of the

government-wide audit committee. The expanded role will allow for greater public

confidence in the government management process.

Mr.

Speaker, we will restore fiscal confidence and accountability.

We will

do what Newfoundlanders and Labradorians are expecting us to do: we will

eliminate government waste; we will stop excess spending; we will be more

efficient; and, we will expect that public money is treated responsibly. And we

will act when we suspect it is not.

Conclusion

Our

government has a plan for the future of our province one that will achieve

fairness for all generations of Newfoundlanders and Labradorians.

Short-term thinking and short-term planning is something I will not do. We will

not sit idly by and hope for things to improve. Our plan is driven by the vision

for long-term sustainability for our province and our people something that

can only be achieved through decisive and strategic short, medium and long-term

actions.

Led by

our Premier, backed by the strength and skill of the Cabinet and Caucus, we will

gather the facts, analyze the data, make plans, and execute and evaluate our

performance.

We will

hold ourselves accountable. We will get results.

Today

marks a bold step forward and we have much more work to do.

Mr.

Speaker, I can assure the people of the province we will not stop until we have

our province back on stable financial footing and we have restored confidence in

the fiscal future of this great province we are proud to call home.

Thank

you, Mr. Speaker.

MR. SPEAKER:

The hon. the Minister of

Finance and President of Treasury Board.

MS. C. BENNETT:

Mr. Speaker, I move,

seconded by the Premier, that the debate be adjourned

MR. SPEAKER:

The motion is that the

debate be adjourned.

Is it

the pleasure of the House to adopt this motion?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

MR. SPEAKER:

All those against, 'nay.'

Carried.

motion, budget debate adjourned.

MR. SPEAKER:

The hon. the Minister of

Finance and President of Treasury Board.

MS. C. BENNETT:

Mr. Speaker, I wish to

inform the House that I have received a message from His Honour the Lieutenant

Governor.

MR. SPEAKER:

All rise.

The

following message has been addressed by His Honour the Lieutenant Governor to

the hon. the Minister of Finance:

Lieutenant Governor of the Province of Newfoundland and Labrador, I transmit

Estimates of sums required for the Public Service of Province for the year

ending 31 March 2017, in the aggregate of $7,934,237,500, and in accordance with

the provisions of sections 54 and 90 of the Constitution Act, 1867, I recommend

these Estimates to the House of Assembly.

Sgd:

__________________________________________

Lieutenant Governor

Please

be seated.

The

hon. the Minister of Finance and President of Treasury Board.

MS. C. BENNETT:

Thank you, Mr. Speaker.

I move,

seconded by the Minister of Municipal Affairs and Service NL that the Message,

together with the Estimates, be referred to the Committee of Supply.

MR. SPEAKER:

It is moved and seconded

that the Message from His Honour the Lieutenant Governor, together with the

Estimates, be referred to a Committee of Supply and that I do now leave the

Chair.

Is it

the pleasure of the House to adopt the motion?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

MR. SPEAKER:

All those against, 'nay.'

Carried.

motion, that the House resolve itself into a Committee of the Whole on Supply,

Mr. Speaker left the Chair.

Committee of the Whole

(Budgetary documents are distributed.)

CHAIR (Dempster):

The hon. the Government

House Leader.

MR. A. PARSONS:

Madam Chair, I move that the

Committee rise, report progress and ask leave to sit again.

CHAIR:

The motion is that the

Committee rise, report progress and ask leave to sit again.

All

those in favour?

SOME HON. MEMBERS:

Aye.

CHAIR:

All those against?

The

motion is carried.

motion, that the Committee rise, report progress and ask leave to sit again, Mr.

Speaker returned to the Chair.

MR. SPEAKER (Osborne):

The hon. the

Deputy Speaker.

MS. DEMPSTER:

Mr. Speaker, the Committee

of Supply have considered the matters to them referred and have directed me to

report that some progress was made and ask leave to sit again.

MR. SPEAKER:

The Chair of the Committee

of Supply reports that the Committee have considered the matters to them

referred and have directed her to report that they have some progress and ask

leave to sit again.

When

shall the report be received?

MR. A. PARSONS:

Now.

MR. SPEAKER:

Now.

When

shall the Committee have leave to sit again?

MR. A. PARSONS:

Tomorrow.

MR. SPEAKER:

Tomorrow.

motion, report received and adopted. Committee ordered to sit again on tomorrow.

MR. SPEAKER:

Notices of Motion.

Notices of Motion

MR. SPEAKER:

The hon. the Minister of

Finance and President of Treasury Board.

MS. C. BENNETT:

Thank you, Mr. Speaker.

I give

notice that I will move that the House resolve itself into a Committee of the

Whole to consider a resolution respecting the imposition of taxes on personal

income, Bill 13.

Mr.

Speaker, I give notice that I will move that the House resolve itself into a

Committee of the Whole to consider a resolution respecting the imposition of a

deficit reduction levy on taxable income.

Mr.

Speaker, I give notice that I will move that the House resolve itself into a

Committee of the Whole to consider a resolution respecting the imposition of

taxes on corporate income, Bill 15.

Mr.

Speaker, I give notice that I will move that the House resolve itself into a

Committee of the Whole to consider a resolution respecting the imposition of

taxes on capital income, Bill 16.

Mr.

Speaker, I give notice that I will ask leave to introduce a bill entitled, An

Act To Amend The Income Tax Act, 2000 No. 5, Bill 17.

Mr.

Speaker, I give notice that I will move that the House resolve into a Committee

of the Whole to consider a resolution respecting the imposition of taxes on used

vehicles, Bill 18.

Mr.

Speaker, I give notice that I will move that the House resolve itself into a

Committee of the Whole to consider a resolution respecting the imposition of

taxes on insurance premiums, Bill 19.

Mr.

Speaker, I give notice that I will move that the House resolve itself into a

Committee of the Whole to consider a resolution respecting the imposition of

taxes on gasoline, Bill 20.

Mr.

Speaker, I give notice that I will move that the House resolve itself into a

Committee of the Whole to consider a resolution respecting the imposition of

taxes on insurance companies, Bill 21.

Mr.

Speaker, I give notice that I will move that the House resolve itself into a

Committee of the Whole to consider a resolution respecting the imposition of

taxes on tobacco, Bill 22.

Mr.

Speaker, I give notice that I will ask leave to introduce a bill entitled, An

Act To Amend The Revenue Administration Act, No. 6, Bill 23.

MR. SPEAKER:

Further notices of motion?

The

hon. the Government House Leader.

MR. A. PARSONS:

Mr. Speaker, I give notice,

and by leave, move that firstly the following heads of expenditure be referred

to the Government Services Committee: the Department of Finance and the Office

of the Chief Information Officer; the Public Service Commission and the Human

Resources Secretariat and the Women's Policy Office; Service Newfoundland and

Labrador; the Government Purchasing Agency; and the Department of Transportation

and Works.

Secondly, that the following heads of expenditure be referred to the Resource

Committee: the Department of Advanced Education and Skills; the Department of

Business, Tourism Culture and Rural Development; Forestry and Agrifoods; the

Department of Environment and Conservation and the Office of Climate Change and

Energy Efficiency; the Department of Fisheries and Aquaculture; and the

Department of Natural Resources and the Office of Public Engagement.

Finally, the following heads of expenditure be referred to the Social Services

Committee: the Department of Child, Youth and Family Services; the Department of

Education and Early Childhood Development; Fire and Emergency Services; the

Department of Health and Community Services; the Department of Justice and

Public Safety; Labour Relations; the Department of Municipal Affairs; the

Newfoundland and Labrador Housing Corporation; and the Department of Seniors,

Wellness and Social Development.

Mr.

Speaker, I also wish to advise Members that on Monday, April 18, 2016, at 9 a.m.

the Government Services Committee will meet in the Chamber to review the

Estimates for the Public Service Commission, along with the Human Resources

Secretariat and the Women's Policy Office of the Executive Council.

further advise Members that on Monday, April 18, 2016, at 6 p.m. the Social

Services Committee will meet in the Chamber to review the Estimates for

Municipal Affairs and Fire and Emergency Services.

MR. SPEAKER:

Is it the pleasure of the

House to adopt the motion of these referrals?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

MR. SPEAKER:

All those against, 'nay.'

Carried.

The

hon. the Government House Leader.

MR. A. PARSONS:

Mr. Speaker, I move,

seconded by the Minister of Finance and President of Treasury Board, that the

remaining Orders of the Day do stand deferred and that this House, on its

rising, do adjourn.

MR. SPEAKER:

The motion is that this

House do now adjourn.

Is it

the pleasure of the House to adopt the motion?

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

MR. SPEAKER:

All those against, 'nay.'

Carried.

The

House does now stand adjourned until tomorrow, Monday, at 1:30 in the afternoon.

motion, the House at its rising adjourned until tomorrow, Monday, at 1:30 p.m.