March 22, 2001 HOUSE OF ASSEMBLY

PROCEEDINGS Vol. XLIV No. 5

The House met at 2:00 p.m.

SERGEANT-AT-ARMS: All rise.

MR. SPEAKER(Snow): Order, please!

Before we begin, I would like to welcome to the House of Assembly today the

Consul General of Japan, Mr. Fumiaki Takahashi and Miss Joanne McNair, Assistant

to the Consul General of Japan.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Finance.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, I move, seconded by the Premier, that this

House approve, in general, the budgetary policy of the government.

MR. SPEAKER: The motion is that this House approve the general budgetary

policy of the government.

The hon. the Minister of Finance.

MS J.M. AYLWARD: Mr. Speaker, I am pleased to present today the first Budget

of the administration led by Premier Roger Grimes.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: I am also pleased to present my first Budget as Minister of

Finance.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, our government is committed to change. We must

be willing to create a greater level of trust, openness and accountability so

that our people can have confidence in the work plan we have put forward.

Our commitment to a new approach extends to the Budget process. Over the past

several weeks, I have spoken to and heard from many Newfoundlanders and

Labradorians through the pre-Budget consultation process. I would like to take

this opportunity to thank publicly all those who participated. I received useful

advice and many valuable insights. We believe the strength of any government

initiative depends on public input and public understanding for the decisions we

make on behalf of our people.

Engaging in meaningful public consultation demonstrates that our government

is moving forward to deal decisively with important issues in a more open

manner. In this regard, funding is provided for the Office of the Ombudsman and

a Child Advocate.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: In preparing this Budget, we faced different economic and

fiscal realities than those of recent years. For several years, the strong

economy saw provincial tax revenues, as well as transfers from the federal

government, rise well beyond budget forecasts. These additional revenues gave us

the flexibility to invest in public services, particularly health, and to reduce

taxes, while recording modest deficits.

However, with the national economy slowing, federal transfers will not grow

as strongly in the new fiscal year, if at all. Transfer growth would be

constrained in any case by a restrictive ceiling the federal government has

imposed that caps Equalization payments. A slowing economy will also affect our

tax revenues. Yet, there are great expenditure pressures pushing the cost of

public services ever higher. These factors require fiscal prudence and sound

planning for the new fiscal year to ensure commitments to program initiatives

can be sustained.

We have listened to the people of the Province and have carefully weighed our

options, and our responsibilities. The decisions, outlined today, have found the

right balance between sound financial management and the provision of

appropriate, affordable public services. We are moving forward to implement the

work plan that our government has outlined. We are undertaking other

significant, but affordable, initiatives to enhance the public services that

reflect the priorities of the people, which are the priorities of this

government.

BUDGET PLAN

Our Economic Climate

Mr. Speaker, the economic climate is an important factor in formulating our

Budget plan. In 2000, our economy grew in excess of 5 per cent in real terms for

the third consecutive year. This has increased consumer and business confidence,

and is reflected in gains in retail trade and personal income. The unemployment

rate declined to its lowest level since 1990. In-migration, people moving to the

Province, continued to increase, reaching the highest level in 25 years. This

reduced net out-migration to 2,077, its lowest level in almost a decade and well

below the average annual historical level of 3,750 in the 20 year period prior

to the early 1990s.

Exports continue to account for over half of growth, driven in 2000 by the

first full year of production at Hibernia, as well as strong performances in

other resource sectors. A record number of tourists also came to our Province in

2000. Revenues to the Province, however, will continue to lag economic gains for

some time, constraining fiscal flexibility.

Oil revenues will remain modest until project capital costs are recouped.

Overall, many revenue gains are offset by concurrent reductions in Equalization.

So while the economy is producing some solid results, this does not necessarily

translate into similar growth in government revenues.

Real economic growth in 2001 is expected to be 2 per cent, reflecting, in

part, completion of Terra Nova construction and oil production commencing late

in the year. A major factor in the economic outlook, but still uncertain, is the

extent the Province may be impacted by an economic slowdown in the United

States, our major export market. The effect a U.S. slowdown could have on the

Canadian economy generally is also a factor. While there are uncertainties in

the national and international economies, we are expecting growth in our economy

in 2001 to be broadly based, reflecting the underlying strength of many sectors.

With employment expected to grow, the unemployment rate could further decline.

Our population should stabilize as out-migration continues to slow.

Our Fiscal Framework

With the strong provincial and national economies in 2000, we will slightly

better our deficit target for the year just ending. At $32.7 million, the

deficit for 2000-01 is $2 million lower than the forecast of last year.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, we have now recorded the best fiscal

performance for any consecutive five year period since the early 1960s. Each

year we have not only met, but improved upon, our deficit targets.

This demonstrates that we are successfully managing the affairs of the

Province both in the short term, but more importantly in the longer term,

creating the stability necessary to promote economic growth and to sustain

public services. The strategy we have utilized for several years in managing

public finances is to shift revenues form years where we would have

unnecessarily high surpluses to years were we would otherwise have excessively

high deficits. This smoothing of the peaks and valleys of our fiscal position

has been a significant factor in creating the stability the Province has enjoyed

over the past five year. We are employing this strategy again to ensure that the

Province will sustain a sound fiscal performance in 2001-02.

For the year just ending, we incurred additional expenditures of $65 million

including some year end investments, partly funded out of the $30 million

contingency reserve, giving a net cost of $35 million. This was offset by

increased current account revenues of $233.8 million, primarily additional

Equalization and income tax. This could have created a surplus for 2000-2001 of

$164.1 million. However, if we recorded that surplus, the Province would have

faced a deficit of $227.3 million in the new fiscal year. The impact that this

would have on services like health and education would be devastating.

To maintain stability in both our finances and our services, government has

again shifted a pool of flexible revenues forward to the new fiscal year. By

shifting $196.8 million in revenues forward to 2001-2002, primarily accumulated

dividends from Newfoundland and Labrador Hydro and sinking fund revenues, we can

reduce the deficit for the new fiscal year from $227.3 million to a more prudent

and fiscally manageable target of $30.5 million.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: By following this strategy we are able to create fiscal

flexibility for 2001-2002 to undertake many important initiatives, particularly

investments in health and our youth. The fiscal plan and deficit target for

2001-2002 includes provision for a 3 per cent salary increase for provincial

employees.

To reach a prudent deficit, we have reduced the $30 million contingency

reserve, which has been in place for several years to provide a measure of

protection against unforeseen increases in expenditures or declines in revenues,

to $10 million. While, in our view, it is unlikely we will see large

unanticipated revenue gains again this year, our solid record on expenditure

management gives us confidence that our deficit target can be achieved. Mr.

Speaker, I am pleased to announce that we will achieve our fiscal objectives

with no new taxes and no tax increases.

Public Sector Collective Bargaining

Public sector collective bargaining is a key issue for our budget plan.

Salary costs are by far the largest component of our Budget. About 80 per cent

of health care costs are salaries. About 70 per cent of the cost of the

education system is salaries. For every 1 per cent increase in our salary

budget, this equates to about $18 million in additional costs.

We believe our public sector employees deserve a fair and significant salary

increase. We have taken careful account of what our people can afford. In our

view, Mr. Speaker, by any reasonable measure, we have made that offer.

INVESTING IN PEOPLE

Mr. Speaker, in this Budget, we are moving forward on our record of investing

in people. Our priorities remain health, education and helping those who are

most in need. Among our priorities, we are shaping our focus on youth, the

future of our Province.

Investing in Our Youth

At the public consultations for the Renewal Strategy for Jobs and Growth, the

critical importance of education and the development of our youth, our most

important resource, was repeatedly emphasized as a key ingredient for our

long-term economic success. We heard that youth need to be given an active role

in determining the directions that we take and that we have to focus more

effectively on the challenges confronting our youth in the new economy.

Enacting the recommendations of the Ministerial Panel on Educational Delivery

in the Classroom was highlighted as an opportunity to achieve excellence in the

K to 12 school system. Government is taking a number of steps to address these

specific issues.

Establishing a New Department

A new Department of Youth Services and Post-Secondary Education has already

been established to develop the potential of the Province's youth and

integrate their views into our economic and social agendas. A new Provincial

Youth Advisory Committee will provide the minister and the government with input

on youth issues.

Refocusing the Department of Education

The Department of Education has a new focus. This will bring about an

intensified concentration on the K to 12 system and literacy. The department

will also extend its mandate to include responsibility for early childhood

education.

Investing in the K to 12 System

Mr. Speaker, this is no better investment that we can make for our future

than in the education of the Province's youth. We are committed to ensuring

that all the youth of the Province have access to a quality education. In this

Budget, we are providing significant funding, including new initiatives, to

ensure that access to quality education is available to all students, regardless

of where they live in our Province.

The increase in per student spending is the result of a number of initiatives

undertaken by this government. We have allowed school boards to retain savings

from school reorganizations and declining enrolments that normally would have

reverted to government. We have maintained teaching positions that otherwise

would have been lost because of declining enrolments. And, we continue to act on

recommendations of the Ministerial Panel. We also have funded the most

significant program of school construction and renovation in our history.

Spending More Per Pupil

Mr. Speaker, with this Budget, our expenditure per student continues to grow.

When we look at the new school year to commence in September, school enrolment

will have declined by 14,500 students over the last four years, or by 14.8 per

cent. Yet, over the same period, government is spending more per student. Even

when our substantial capital investment in school facilities is excluded, our

spending per student will have grown from $5,557 to $6,434.

Maintaining School Board Grants

Educational reform has resulted in school reorganizations and some closures

that have made our education system more efficient. We implemented a policy

enabling school boards to retain the savings from school closures. Rather than

have these savings revert to government, school boards have been able to keep

them for a period of three years for reinvestment in our schools. In total,

$23.4 million has been reinvested as a result of this policy.

The three-year commitment allowing school boards to retain savings was due to

expire in 1999-2000. In each of the past two years, and again for the upcoming

year, government has allowed savings from school closures to remain with the

boards. For the coming year, $5.6 million will be maintained in school board

operating grants as a result of this initiative.

We also are providing extra funding to cover the unanticipated rise in

utility costs for school buildings. A one-time allocation of $3.5 million is

being made to pay the additional utility costs incurred over the past two years.

As well, on an ongoing basis, we will be funding the actual costs of utilities

and fuel, protecting school boards from unpredictable price fluctuations.

No Teacher Lay-Offs

Mr. Speaker, despite declining enrolment, we have been reinvesting to retain

most of the teaching positions that would otherwise come out of the system. For

the coming year, however, this government will not lay off any teachers, even

though enrolment will decline by approximately 3,500 students.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, this will be the first time in our history of

declining enrolment when there will be no teacher lay-offs.

Implementation of the new allocation method in the Ministerial Panel Report

on Education Reform would have resulted in the loss of 218 teaching units. We

have decided, as a government, to reinvest $11 million into the education system

to retain these 218 teaching units.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: This reinvestment will allow school boards to improve

programming and reduce class size.

Maintaining the Best Teacher-Pupil Ratio

Over the past twelve years, our teacher-pupil ratio has improved

significantly and is now the best in the country. In the new school year, as a

result of this Budget, it will improve again. We will have one teacher for every

13.3 students. This Budget ensures we will continue to lead the country by our

investment in teaching positions and resources.

Addressing Recruitment Concerns

This year proved to be a difficult one for school boards to recruit and

retain sufficient teachers for Coastal Labrador. We have provided $800,000 to

fund a recruitment and retention bonus for all teachers who work in isolated

costal communities in Labrador.

Implementing the Ministerial Panel Report

Mr. Speaker, a number of new initiatives, totaling almost $5 million, are

being funded in 2001-2002 as government continues implementation of the

Ministerial Panel recommendations.

These initiatives include the creation of a Centre for Distance Learning and

Innovation. The Centre will provide Web-based high school courses to all

students, including adults, wishing to complete a high school program. Teachers

also will benefit through quality online professional development programs and

resources. We are optimistic that the technology skills crucial for success in

the knowledge-based economy, fostered through the Centre, will reinforce

government's rural economic diversification strategy.

September will see new curriculum for mathematics, language arts, physical

education, and technology education implemented. As well, on a pilot basis, new

courses in Newfoundland and Labrador history and religious education will be

introduced. Funding is also provided for a music specialist to support program

development in this area of the curriculum.

We are extending for another year the $900,000 increase made last year to the

teacher professional development. A total of $4.4 million is allocated in the

new fiscal year for professional development to assist teachers improve teaching

and learning strategies.

Increasing Literacy Levels

A $500,000 allocation is being made in support of the Strategic Literacy

Plan. Addressing literacy is an important component of the Jobs and Growth

agenda because of the role literacy plays in employment, career and business

opportunities. The plan is working to ensure the supports are in place so that

anyone who wants to can improve their literacy skills.

Our commitment to providing our libraries with the most current reading

materials will also be strengthened this year through an allocation of $1

million for the purchase of library books in addition to our regular annual

funding.

Improving School Facilities

An additional $23 million has been allocated to address priority school

construction and renovation projects. This brings the total investment planned

in school buildings since 1998-99 to $160 million.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: To date, eight new schools have been constructed, with ten

others in either the planning or construction stages. In addition, major

renovations or extensions have been completed to another twenty-seven schools

throughout our Province.

Parity in School Busing

To achieve parity in the school busing system throughout the Province,

$800,00 is allocated to extend free bus transportation service to junior and

senior high school students in St. John's -

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: - who live more than 1.6 kilometers from their school. As a

result of this initiative, all students, regardless of their grade level or

where they live in the Province, will have access to free school bus

transportation.

Fully Investing the Savings from Reform

Mr. Speaker, education reform provided an opportunity to reinvest savings

from school board consolidations and school closures into services for children.

School board consolidations have resulted in savings totaling $55 million since

1997-98. These savings have been fully reinvested. In fact, we have provided a

further $160 million through our school construction and renovation program. In

addition, all savings from school closures and enrolment declines have been

reinvested. The amount reinvested to date from these savings is in excess of $34

million.

Supporting Post Secondary Education

Another component of our commitment to investing in our youth is support for

post-secondary education and for our graduates. Provincial funding for public

post-secondary institutions has increased by 21.3 per cent since 1997-98.

For our students, affordability is a critical element of educational

opportunities. Over the past two years, we have provided funding so that

Memorial University and the College of the North Atlantic could implement a

tuition freeze. Tuition fees at Memorial University are already the lowest in

Atlantic Canada.

Reducing Tuition

Mr. Speaker, this year, we are providing a $3.3 million in additional funding

to Memorial University to enable a 10 per cent reduction in tuition for the new

academic year commencing in September.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Funding will be provided to enable students at the Faculty

of Medicine, the Marine Institute and the College of the North Atlantic to

continue to benefit from the tuition freeze. Our public college fees, already

substantially lower than Memorial, are the second lowest in Atlantic Canada.

Lowering Student Debt

Student debt is also an important issue. Too many students graduate with debt

levels that place a great burden on their futures. We already spend $6.1 million

annually to assist students with high debt loads who successfully complete their

academic programs on time.

The Student Aid Review Advisory Committee will be making recommendations for

our consideration later this year. We have to take time to consider this issue

in consultation with stakeholders and plan to come forward with further relief

measures in due course. This will require reform of the Student Aid Program. We

will also press the federal government to initiate similar student loan reforms.

A New Student Investment and Opportunity Corporation

Mr. Speaker, today, we are also announcing the creation of a new Student

Investment and Opportunity Corporation with an initial investment totaling $8.8

million.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: The corporation will enhance youth employment programs,

which will assist in addressing the student debt issue. The corporation will

also absorb $4.8 million in existing youth employment programs, which will

assist in addressing the student debt issue. The corporation will also absorb

$4.8 million in existing youth employment programs, as well as receive an

additional $4 million for new initiatives. The programs of the corporation will

aid post secondary students gain work experience and employment which will

offset the cost of their education. It will help us address key youth concerns,

including high youth unemployment and making the successful transition from

school to work.

Investing in Facilities and Research

We are also making significant investments in our post secondary facilities

and in their research capabilities.

We have committed to match private donations to the MUN Opportunity Fund,

which provides both scholarships for students and capital improvements at the

university. This year we will make a payment of $3 million, bringing our total

contribution to date to $21.3 million.

For new facilities, including classroom space and library resources, as well

as building renewal at the College of the North Atlantic, $8.1 million is

provided in the new year.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: An allocation of $500,000 will assist Memorial and the

College of the North Atlantic to access federal funding for research and

development from the Canadian Foundation for Innovation.

Investing in Health

Mr. Speaker, there is ample evidence of our commitment to health in each and

every Budget over the last five years. In 1997, we were faced with an

unacceptably high budget deficit, expenditures were cut in every department

except Health. As our fiscal situation improved, we made major investments in

health every year thereafter. According to the Canadian Institute for Health

Information, per capita public sector spending on health in this Province was

below the Canadian average until 1996. Since 1997, however, we have exceeded the

average each year. For 2000, public sector health spending in this Province was

12.5 per cent more per capita than the Canadian average.

In the new fiscal year, we will be adding $114 million more to our health and

community services budget, money that will go to fund the important day to day

operation of the health sector. Mr. Speaker, this is the largest single increase

ever made by any government in the history of this Province.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: This represents a 9 per cent increase over the level of

funding provided last year.

Our annual contribution to operating health services has increased from $1

billion in 1996-97 to about $1.4 billion in 2001-02. This is an increase of

about $400 million, close to 40 per cent, in just five years. Mr. Speaker, new

funding for the health sector on this scale is unprecedented in our history.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: In addition to funding operating costs, over $400 million in

capital investments have been made since 1996-97, both by the health care boards

and by government directly. This money provides for new facilities, as well as

renovations to existing ones, and health equipment in every region. When the

monies government is providing or has approved for 2001-02 are added in, the

amount committed over the six year period will total almost half a billion

dollars.

Health Care Workforce

In this Budget, government continues to provide more money for health care

workers. Excluding the union contracts under negotiation, $47 million more is

allocated to staff the health system. This is necessary both to retain our

skilled workforce, as well as to recruit required professionals. The Budget

provides for the further implementation of pay equity in the health sector,

additional funding for physicians and a base salary increase for home support

workers.

Most home support workers currently receive $5.84 an hour. These workers will

see their wage rate rise this year in two steps to $ 7.01 an hour.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: This is a much needed increase of 20 per cent in a period of

less than one year to correct a salary anomaly for these lower paid workers.

An additional $11 million has been allocated for physicians, some of which is

for new positions. This will contribute to our good record of physician

retention and recruitment. From 1998 to 2000 there has been a net gain of

sixty-one physicians for the Province, thirty-four general practitioners and

twenty-seven specialists. This is not to say that every community has all the

doctors they would like, but it does show that we have had some success in

ensuring an adequate number of physicians for the Province. A further $600,000

is provided for the Faculty of Medicine at Memorial University, supporting new

physicians for the Province and improving our ability to recruit specialists.

Of the new money for health care workers, $25 million is provided to fund the

reclassification of nurses and other professional staff undertaken last year. A

reclassification review is currently underway for laboratory and x-ray

technicians which will be completed later this year.

Priority Programs

The Budget provides an increase of $14.8 million for priority programs. This

money is incremental funding for our drug programs, blood supply, road ambulance

operations and medical transportation assistance program.

Included is $2.4 million to continue increasing the number of cardiac

surgeries, which will go from twelve cases a week in 1999 up to twenty cases per

week later this year. As well, $710,000 is provided to increase the level of

cardiac catheterizations.

In addition, the subsidy to personal care homes will increase for the second

consecutive year by $1.3 million.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: This brings the total to $12 million annually. As a result,

our contribution to monthly rates is rising to about $1,000. The number of

individual clients receiving subsidies will also increase. Our plan is to move

to providing more personal subsidies rather than subsidizing facilities.

As well, $2.1 million will permit the pharmacy dispensing fee for income

support recipients to be raised to $6.50, fully restoring it to the level prior

to the 1996 Budget.

Health Care Facilities

Ongoing construction and renovation projects at a number of facilities around

the Province will receive $50 million in funding in 2001-2002. Major work is

ongoing at Gander, Stephenville, Grand Bank, Bonne Bay, Fogo and Old Perlican.

Work will also commence on a new long-term care facility at Clarenville.

Investing in Modern Equipment

Part of our commitment to health care has been an investment of over $100

million for new equipment over the last five years. This Budget provides a

further $32.4 million to modernize diagnostic and therapeutic equipment at

facilities all across the Province. Of this amount, a $17.4 million contribution

comes from the federal government as part of the First Ministers' Agreement on

Health Renewal. Purchases will include CT scanners, mammography units and

therapeutic equipment for acute care, as well as priority equipment for

residential care needs in nursing homes.

Stabilizing Health Board Budgets

We will again this year be increasing the base budgets of institutional

health boards. In 2001-2002, this additional funding for health board operations

will be $50 million.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr Speaker, this is the largest single annual increment of

the last five years. For the new fiscal year, base budgets for boards will be

$111.7 million higher than they were five years ago. This increase will

stabilize board funding and allow them to operate within balanced budgets. This

will position them to achieve efficiencies and focus on future service

improvements.

We are also placing greater emphasis on community based health services and

population health programs. Health and community services board will receive

incremental funding of $7 million.

Regional Health Forums

Mr. Speaker, to help government build a vision for health and community

services for the future, a series of Province-wide regional health forums will

be held this year. The forums will permit community partners to assist us in

seeking consensus on the principles necessary to improve quality in the health

system, ensure long-term sustainability, provide equitable access, maintain

affordability and enhance public accountability.

Federal Transfers for Social Programs

Mr. Speaker, funding health, in particular, is an ever increasing challenge

given the limited flexibility in our fiscal position. In large measure,

responsibility for this lies with the federal government, whose contribution to

provincial social program funding, including health, was much higher in the past

and must be increased.

Even with the federal commitment to increase CHST cash transfers out to

2005-2006, our share in five years time will be $61 million less than it was

seven years ago. For the new fiscal year, it will be $92 million less than it

was seven years ago. Nationally, the federal share of funding social programs

will again be in decline each year after 2001-2002. Not only should the federal

government make larger cash contributions to provincial social program funding,

this should be done in a manner that delivers more of that funding to those

provinces most in need. One way the federal government could do this is by

revitalizing the Equalization program.

Helping Those Most in Need

Strategic Social Plan

Mr. Speaker, funding of $2 million for implementation of the Strategic Social

Plan will be maintained in the new fiscal year, supporting the work of the six

regional steering committees, all now operational.

The Strategic Social Plan recognizes the importance of promoting the links

between social and economic development. Good social policy and investments in

social planning support economic progress. To the extent that people are

prepared to participate fully in the life of the community and achieve their

potential, economic investments finds a place to take hold and flourish. This

government has made significant changes to the delivery of income support to

assist clients to access the training and supports they need to find and

maintain work.

The Single Parent Employment Support Program has been an innovative and

successful pilot partnership between government and the Single Parents

Association of Newfoundland. Of the 239 single parents who participated in this

pilot, 124 are currently employed and forty more are no longer in receipt of

income support.

In the words of one person who has been in receipt of social assistance for

seven years prior to enrolling in this program: "My whole life has changed.

Now I am sure that good things are beginning to happen to me."

Another person who participated in both our "New Beginnings"

program and our "Skills for Success" program said, "It was at New

Beginnings that I got on the right track." She is now enrolled at Memorial

University and is pursuing her ambition to go into nursing.

These cases, and others, demonstrate how investing in people and in community

infrastructure is an investment in economic prosperity down the road.

Women's Centres

In recognition of the important work done by the Women's Centres across the

Province in delivering community-based services, I am pleased today to announce

that funding for the seven centres will be increased. When the federal

government stopped funding Women's Centres in 1998, the Province stepped in to

enable the centres to maintain operations. During pre-Budget consultations,

women's organizations across the Province highlighted increased funding for

the centres as an important priority. Mr. Speaker, their operational funding

will increase by two-thirds to $50,000 each.

NLHC Community Centres

Newfoundland and Labrador Housing Corporation community centres also provide

valuable educational, recreational, social and health programs to many

individuals and their families. To permit the centres to enhance their

operations by offsetting the cost of program co-ordinators, $140,000 is

allocated in the new fiscal year.

Pensions and the Seniors' Benefit

Government has grappled for some years with the issue of public service

pensions. A plan is in place that will see the pension funds put on a

sustainable financial footing over time. Government is concerned about the

well-being of low income seniors generally, including low income public service

pensioners.

In 1999, we implemented a low income seniors' benefit. Mr. Speaker, I am

pleased today to announce that we are increasing the benefit by 50 per cent from

$200 to $300 annually.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: As well, the low income threshold at which the benefit

begins to phase down is being raised from $12,000 to $14,000. All seniors aged

sixty-five and over, with annual family income of less than $20,000, will

receive either a full or partial benefit, regardless of any other pension income

they may receive. Those with family income of $14,000 or less will receive the

full $300 benefit. Mr. Speaker, this action demonstrates our commitment to

assist low income seniors financially, within our means.

Newfoundland and Labrador Child Benefit

The Newfoundland and Labrador Child Benefit provides financial services and

support to low income families with dependent children. I am pleased to announce

today that we are increasing the eligibility thresholds to allow more families

to receive the benefit. Previously, families with incomes below $15,931 received

the full benefit. This is now raised to $16,744. The phase-down thresholds are

also increased.

Opening Doors Programs

I am pleased to announce that an additional $600,000 will be added to the

Opening Doors Program over the next three years. The expanded program will

increase the number of permanent, full-time employment opportunities in the

public sector for people with disabilities. The program is a partnership between

government and NAPE to create job opportunities for people with disabilities.

Local Government

Debt Relief Program

Mr. Speaker, we will continue to assist municipalities experiencing financial

difficulty through the Debt Relief Program. We are making an additional $10

million available for the program in the new year, bringing our total commitment

since initiating the program five years ago to $35 million.

INVESTING IN INFRASTRUCTURE

Municipal Capital Works Program

A municipal capital works and infrastructure program of $50 million is

forecast for the new fiscal year.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: This is funded by a $27 million provincial contribution,

with the balance from the federal government and municipalities.

Of the Province's $27 million, $7 million will fund a new

provincial-municipal cost-sharing ratio variable. This will make it more

affordable for smaller rural communities to undertake larger capital works

projects than they ever could in the past.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Community size, tax base and the ability to generate

revenues will be considered in determining the municipal share. The provincial

government will fund a higher share of project costs for these municipalities.

Safe Drinking Water Initiative

Ensuring safe drinking water for our residents of the Province is a high

priority for this government. Mr. Speaker, today we are announcing an $11

million safe drinking water initiative. This Budget allocates $2.6 million to

address water sampling, staff training and infrastructure needs, including

chlorination programs, for the provision of safe drinking water. Municipalities

currently under a boil water advisory can receive 100 per cent funding up to a

maximum of $100,000 to install or upgrade water disinfection systems.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: We will working closely with communities to improve

municipal water supplies.

Roads and Transportation

Today we are announcing a highway and road construction program of $121.8

million for the new fiscal year.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Mr. Speaker, this is the second-largest program since

Confederation, exceeded only by last year, and brings our total commitment over

six years to $644 million.

This allocation will see a 50 per cent, or $6 million, increase in the paving

and road construction component of the provincial roads program.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Construction will continue on roads in coastal communities

in Northern Labrador, as well as the Trans-Labrador Highway in Southern

Labrador.

In early 2000, the people of Long Island made a strong plea for a causeway to

replace their ferry services. At the time, the federal minister of ACOA pledged

up to $8 million, or 80 per cent, of the cost of the project. Today, I am

pledging that the Province will make available $2 million, or 20 per cent of the

cost, towards the construction of the causeway -

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: I am pledging that the Province will make available $2

million, or 20 per cent of the cost towards the construction of the causeway as

soon as federal funding is in place. Mr .Speaker, this government, and the

people of Long Island, call on the federal government to fulfill the minister's

pledge to provide construction funding.

An additional $500,000 is provided for ferry modifications, as well as $2

million for upgrading the Bell Island ferry wharves.

Televising the House of Assembly

Mr. Speaker, acting on our commitment to bring about a more open and

accountable government, $1.3 million is provided to permit the House of Assembly

to be televised.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: We are aiming to have the technical work completed in time

to begin telecasts for the fall 2001 sitting of the House of Assembly.

INVESTING FOR JOBS AND GROWTH

Government is committed to building on the economic momentum generated over

the last five years. We will continue to give particular attention to rural

areas.

Amalgamating into a New Department

Our first step has been to merge two economic development departments into

one with a stronger mandate. This brings together core economic and business

development functions to allow more focused and co-ordinated delivery of

programs at the regional level. The new department will have a budget $7 million

larger than the combined budgets of its predecessors.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: New financial resources to pursue the development mandate

will come from the $44.8 million extension to the Canada-Newfoundland

Comprehensive Economic Development Agreement, as well as continued activity

under the "FRAM-ED" Post-TAGS Agreement.

Renewal Strategy for Jobs and Growth

A second step was the release on Tuesday of the final report of the Renewal

Strategy for Jobs and Growth, prepared based on an extensive consultation

process conducted throughout the Province. Mr. Speaker, I want today to

recognize the tremendous leadership shown, as well as the time and effort

devoted, by my colleague, the minister responsible, the Hon. Beaton Tulk, in

bringing this important initiative to fruition.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: This report outlines key initiatives we will be moving

forward on to re-energize our Jobs and Growth agenda. Government's role is to

create the right environment to allow the private sector to drive employment and

economic growth. The report encapsulates what we have heard from the public

during the consultations. We will continue to engage stakeholders to work with

us in implementing the initiatives.

Mr. Speaker, the report contains specific commitments designed to stimulate

growth in the traditional, as well as the non-traditional, sectors of our

economy. This Budget commits funding to support many Jobs and Growth

initiatives, like Team Trade Newfoundland and Labrador which is designed to

stimulate trade and export development. Jobs and Growth funding will support

important sectors like the fishery, agrifoods and tourism, as well as emerging

sectors like information technology and cultural industries. Almost two-thirds

of the priorities identified in the report relate to strengthening rural regions

of our Province.

Sectoral Initiatives

The fishery is an excellent example of government and the private sector

working together to create economic opportunity and growth in rural areas of our

Province. Continued funding is provided to further enhance the Quality Assurance

and Inspection Program implemented in 2000. Through the program, we are

consistently improving our image as a supplier of quality products in the global

marketplace. A priority issue for this government is to protect the adjacency

principle to ensure the Province receives the benefits of our fisheries

resource.

Another example of government and the private sector partnering to stimulate

jobs and growth in rural areas is the success the tourism industry has been

enjoying, particularly in recent years starting with the Cabot 500 celebrations.

To build on this momentum, we are allocating $3.2 million to the Marconi

celebrations, "Receiving the World: Celebrating Communications".

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Not only will the events highlight our place in

communications history, they will also focus on our modern achievements in

marine communications and information technology. In September, we are hosting

the Wireless Vision Congress which will bring together IT industry participants

from around the world.

Our energy and mining sectors have become mainstays of the economy, as well

as hold great promise for the future. We are allocating $300,000 for further

work on a natural gas strategy for the Province.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: This strategy will be key to identifying and advancing the

opportunities our natural gas resources represent. For the mining industry,

$390,000 is provided to expand the Buchans core storage facility, one of six

across the Province preserving mineral core samples for public use. Funding is

also provided for fuel price regulation.

Tax Reduction Initiatives

Mr. Speaker, in support of the Jobs and Growth strategy, and to act on our

commitment to foster a positive climate for business investment, I am pleased to

announce today that effective April 1, government will increase the threshold

for the payroll tax from $400,000 to $500,000.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: Over the last four budgets, we have increased the threshold

from $100,000, removing over 2,000 businesses from the tax roll and reducing the

tax for thousands of others. Virtually the entire small business sector will no

longer pay the tax.

The coming fiscal year also will see further cuts in provincial personal

income tax as part of the tax reduction plan announced in late 1999.

A Greater Share of the Benefits from Our Resources

To take advantage of our economic opportunities, the Province must receive a

greater, and fairer, share of the benefits of key natural resource developments.

In our view, the existing Equalization program almost guarantees that all but a

modest share of the financial benefits of these developments will accrue to the

federal government. A Province, like ours, must be able to use natural resource

development to better ourselves to bring about the economic and social changes

necessary to build a sustainable future as full partners in the Canadian

Confederation.

We are asking today the federal government to ensure that a much greater

share of the new wealth that resource development is creating in this Province

actually stays here.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: We will use these financial resources to develop a

sustainable economy so, in the longer term, we can reduce and eventually

eliminate our need for federal Equalization transfers.

Obtaining a fairer share of the financial benefits of natural resource

developments for our Province is a high priority for this government. Mr.

Speaker, we call on the federal government to make it an equally high priority.

INVESTING IN LABRADOR

Last year's Budget announced a Northern Coastal Labrador initiative to

address housing needs, community infrastructure and policing in five

communities. We are entering the second year of a $23 million a year funding

commitment, which includes a $7.7 million housing component. To give Labrador

and its Aboriginal peoples a stronger voice in government, we have recently

created a new Department of Labrador and Aboriginal Affairs.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: The new department will provide leadership on issues of

concern to Labrador and all of its people.

I am pleased to announce today several initiatives of particular relevance to

Labrador. I mentioned earlier $800,000 for incentive bonuses to attract teachers

to Coastal Labrador communities. Funding is provided for the Forestry Process

Agreement on forestry management and development in Labrador between the

Province and the Innu Nation as committed earlier this year. And, subject to

being implemented nationally, we hope to launch the Aboriginal Cadet Development

Program, which would see Aboriginal youth receive skills upgrading as

preparation for RCMP training. In anticipation of this national program, we have

set aside funding in the new fiscal year for twelve Aboriginal youth who are

residents of Labrador to participate.

The Labrador Travel Subsidy was increased by $180,000 in the middle of the

fiscal year just ending. The subsidy will be maintained at its new level of

$427,000. This will permit students living in Labrador to increase their

participation in athletic tournaments throughout the Province. And finally, our

largest single investment in Labrador this year is the $43 million to be spent

on the Trans Labrador Highway.

SOME HON. MEMBERS: Hear, hear!

MS J.M. AYLWARD: This is an exciting initiative that will open up many

opportunities for the people of Labrador and the whole Province.

Taking Action

Mr. Speaker, this Budget is about taking action for the future. It represents

a new beginning, new ideas and a new vision. This Budget does not rest on the

past, it clearly focuses on the future. It builds on a record of strong fiscal

performance, the best the Province has had in decades. It focuses on the

priorities mot important to the people of our Province- health, education and

helping those most in need.

Change is a necessary component to reflect the priorities of this government.

New departments were created and others amalgamated to reflect these priorities.

A new emphasis is being placed on investing in youth. A work plan has been put

forward.

We share a new confidence in the future with the people of the Province.

Challenges remain, but this Budget demonstrates that we are willing to make

choices and we are willing to take action. Today, we take another step in

setting a new course. We are acting on our priorities, the priorities of our

people, and investing in the future of Newfoundland and Labrador.

Thank you, Mr. Speaker.

SOME HON. MEMBERS: Hear, hear!

MR. SPEAKER: The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

I move the debate be adjourned until tomorrow.

MR. SPEAKER: The motion is that the debate be adjourned until tomorrow.

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, nay'.

Motion carried.

The hon. the Minister of Finance.

MS J.M. AYLWARD: Mr. Speaker, I wish to inform the House of Assembly that I

have received a message from the Administrator.

MR. SPEAKER: All rise.

The following message is addressed to the hon. the Minister of Finance;

President of Treasury Board:

"I, the Administrator of the Province of Newfoundland and Labrador,

transmit estimates of sums required for the public service of the Province for

the year ending March 31, 2002, the aggregate of $3,392,287,700 and in

accordance with the provision of the Constitution Act, 1867, I recommend these

estimates to the House of Assembly."

Signed

Clyde K. Wells, Administrator

The hon. the Minister of Finance.

MS J.M. AYLWARD: Thank you, Mr. Speaker.

I move that the Message, together with the Estimates, be referred to a

Committee of Supply.

MR. SPEAKER: It is moved and seconded that the message from the

Administrator, together with the Estimates, be referred to a Committee of Supply

and that I do now leave the Chair.

On motion, that the House resolve itself into Committee of Supply, Mr.

Speaker left the Chair.

Committee of the Whole

CHAIR (Mercer): Order, please!

We will now take a few moments while the budgetary documents are distributed

to all hon. members of this Assembly.

The hon. the Government House Leader.

MR. LUSH: Mr. Chairperson, I move the Committee rise, report progress and ask

leave to sit again.

On motion, that the Committee rise, report progress and ask leave to sit

again, Mr. Speaker returned to the Chair.

MR. SPEAKER (Snow): The hon. the Member for Humber East.

MR. MERCER: Thank you, Mr. Speaker.

The Committee of the Supply have considered the matters to them referred,

have directed me to report some progress and ask leave to sit again.

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

tomorrow.

Notices of Motion

MR. SPEAKER: The hon. the Government House Leader.

MR. LUSH: Mr. Speaker, I give notice, and by leave, move that the following

Heads of Expenditure be referred to the Government Services Committee; Municipal

and Provincial Affairs; Newfoundland and Labrador Housing Corporation;

Environment; Works, Services and Transportation; Finance; Public Service

Commission and Government Services and Lands.

That the following Heads of Expenditure be referred to the Social Services

Committee; Education; Youth Services and Post-Secondary Education; Human

Resources and Employment; Labour; Health and Community Services; and Justice.

That the following Heads of Expenditure be referred to the Resource

Committee; Fisheries and Aquaculture; Forest Resources and Agrifoods; Mines and

Energy; Tourism Culture and Recreation; Industry, Trade and Rural Development;

and Labrador & Aboriginal Affairs.

MR. SPEAKER: You have heard the motion put forward by the hon. the Government

House Leader.

All those in favour, aye'.

SOME HON. MEMBERS: Aye.

MR. SPEAKER: All those against, nay'.

Motion carried.

The hon. the Government House Leader.

MR. LUSH: Mr. Speaker, I move that the remaining Orders of the Day do stand

deferred and that this House on its rising do adjourn until tomorrow, Monday, at

1:30 p.m., and that this House do now adjourn.

On motion, the House at its rising adjourned until tomorrow, Monday, at 1:30

p.m.