Province		 Législature Session	Type de discours   Date du discours Locuteur	  Fonction du locuteur  Parti politique
Terre- Neuve et Labrador 41e	     2e  	Discours du budget 15 mars 1990	    Hubert Kichen Ministre des finances Liberal


Mr. Speaker, I am pleased to present to this Honourable House the second Budget of the 
Wells Administration.

These first ten months of Government have brought many challenges in managing the 
provincial economy, in providing services essential to our people, and in responding to the 
changing nature of the federal - provincial fiscal balance in this country.

To date, this Government has established a record of responsible action and decisive 
leadership, and has demonstrated a willingness to tackle head- on the tough issues that 
confront us.

Notwithstanding the current difficulties in our economy, optimism and enthusiasm pervade 
this Administration. We are restructuring. the machinery of Government, we are eliminating 
the waste and extravagance of former years, and we are making significant progress in 
implementing policies for which the people of the Province voted nearly eleven months ago.

The preparation of this Budget has not been easy, partly because of the far-reaching effects of 
the drastic reductions in cod quotas, but largely because of the economic, fiscal and monetary 
policies of the Federal Government. However we have been able to produce a Budget that 
addresses in a very significant way this Government's three basic priorities of Economic 
Development, health care and education; a Budget that does not come down hard on the 
people.

This is a prudent Budget that will enable us to go a long way towards delivering to all regions 
of the Province the fairest and most equitable level of service we are able to provide and still 
be fiscally responsible to the present and to the future. Mr. Speaker, I am proud to present this 
Budget for it is truly a Liberal Budget, a people's Budget.

Mr. Speaker, the Province's economy continued to expand during 1989 with the Gross 
Domestic Product, or GOP, growing by 1.4 per cent, after adjusting for inflation. Although we 
have made progress, the rate of growth of the Newfoundland Economy has not kept pace with 
that of the rest of Canada. Over the past seven years the Newfoundland Economy grew at an 
average annual rate of 3 per cent, compared with average annual growth nationally of 4.2 per 
cent.

Mr. Speaker, economic growth in 1989 was not as high are in the previous two years, due 
primarily to a slowdown in the forestry and fishing industries. Most other goods producing 
industries and the service sector, however, continued to perform well.

Newsprint production in the Province increased by 1.2 per cent in 1989, while shipments 
defined slightly because of soft newsprint market conditions. Pulp wood production decreased 
by approximately 6.3 percent due to an earlier than usual suspension of wood harvesting 
operations.

The fishing industry experienced a number of difficulties during 1989. The performance of 
the fishing industry was affected by reduced quotas and by strikes at the two largest fish 
processing companies in the early part of the year. Decreased landings, combined with lower 
prices for some species, caused the value of fish landings to decline.

Demand was strong for the Province's mineral products as the total value of mineral 
shipments rose by 11.1 per cent. Mineral exploration remained at a high level.

Total construction investment increased by 1.5 per cent. Strong growth was recorded in 
residential construction which increased by 10.5 per cent. The more than 3,500 housing starts, 
the highest level since 1980, represented an 11.6 per cent increase over 1988.

The service sector benefited from higher consumer spending stimulated by gains in personal 
income	and tourism. Personal incomes grew by 8.6 per cent in 1989, while retail trade 
increased by about 7 per cent. The Province's inflation rate averaged 3.6 per cent last year 
compared to a national rate of 5 per cent.

Total employment increased by 8,000 person years, up 4.1 per cent from the previous year. 
Employment growth outpaced growth in the labour force causing the unemployment rate to 
fall to 15.8 per cent. Mr. Speaker, this was the lowest unemployment rate in the past eight 
years.

Mr. Speaker, the Provincial economy is expected to grow again in 1990, but at a slower rate 
than in recent years. This is consistent with the growth slowdown expected for the national 
and international economies in 1990. Real GDP in the Province will increase by just under 1 
per cent. Economic growth in the United States and Canada will decline to 1.7 per cent and 
1.3 per cent, respectively. The inflation rate in this Province will average 4 per cent compared 
to a national rate of 4.7 per cent.

Total employment will increase by about 1,000 person years in 1990. Growth in the labour 
force, however, may exceed growth in employment and this would cause the unemployment 
rate to average 16 per cent.

Further declines are expected in the fishing industry as a result of the reduction in ground fish 
quotas and the consequent increase in downtime at fish plants throughout the Province. The 
economic and social consequences would be much greater if Government had not acted to 
extend the period of notice of termination which will result in fish plants remaining open 
during 1990.

In the mining industry, a strong performance is again expected this year. The markets for iron 
ore will remain healthy, and exploration activity will remain strong. Mr. Speaker, the value of 
mineral shipments will be the highest since 1981, and will exceed $1 billion.

The forest industry is expected to experience difficulties in 1990, should soft market 
conditions continue.

The service sector will undergo economic expansion in 1990, driven largely by growth in 
consumer spending.

Negotiations ongoing between the Federal and Provincial Governments and the Hibernia 
consortium should lead to a binding agreement this year to develop the Hibernia oil field. The 
construction industry will experience increased activity in 1990 as development expenditures 
begin for the Hibernia project. Hibernia development will represent the start of a new industry 
in this Province with a strong possibility of other similar developments to follow, such as 
Terra Nova and Whiterose. The contribution of this new industry to the Provincial economy 
will be substantial. We should not, 'because of past delays, underestimate its potential impact 
on the Province. Exploration activity already has resumed in the offshore. Further exploratory 
drilling is expected in the ready 1990's as a result of recent land sales and the sale proposed 
for 1990.

Active discussions have been ongoing regarding the further development of the hydro electric 
potential in Labrador. Should these discussions lead to an agreement, the economic effects 
will be significant.

Military training in Labrador is a source of current prosperity and future economic 
opportunity. The Canadian Forces Base at Goose Bay is used as a training facility by three 
foreign countries, and provides employment for more than 1,100 people. Over $150 million in 
capital projects are planned for the next few years in support of the current level of training. A 
decision to locate a NATO training center at Goose Bay would create an even more 
substantial boost to the local economy. Due regard must be had for the concerns of native 
peoples and for the protection of the environment.

Mr. Speaker, the future of this Province is influenced considerably by the Government of 
Canada. We rely on the Federal Government to implement balanced policies that are for the 
betterment of all regions of the country. As one of Canada's presently less affluent provinces 
we must look to the federal Government to assist us to provide essential services and to 
develop our economy. In this regard, I wish to address several issues relating to the fiscal and 
economic policies of the Federal Government.

To balance economic growth, federal fiscal policy should be targeted to the fullest extent 
possible to enhance the performance of the economically disadvantaged regions. The tough 
measures should be directed at the overheated segments of the national economy. 
Unfortunately, the recent Federal Budget did nothing to alleviate disparities between this 
Province and the rest of Canada.

Although the Federal Budget did not include any new tax increases, some measures 
previously announced will become effective in 1990-91.

These include the Goods and Services Tax, or GST, rate changes to the personal high income 
surtax and the capital tax on large corporations, as well as the phase in of social transfer 
repayments.

The primary target of the two-year expenditure control plan announced in the Federal Budget 
is transfers to provinces. Direct transfers to
individuals are exempt from this federal restraint plan. The task of making the tough decisions 
affecting individuals in effect has been delegated to the provinces.

The largest restraint measure announced in the Federal Budget is a two-year freeze applied to 
the Established Programs Financing, or EPF, arrangements which provide federal financial 
support for provincial health and post-secondary education systems. This measure will reduce 
fiscal transfers to this Province by more than $50 million over the next two years. Combined 
with previous restraint, the federal policies make it increasingly difficult to provide adequate 
health care and post-secondary education programs.

The federal austerity program extends beyond the major transfer programs to provinces. 
Newfoundland and Labrador will be negatively affected by a broad range of changes in a 
variety of programs and activities such as reductions in legal aid and funding for women's 
centres, restrictions on cost-shared funding for social housing, lower subsidies for Marine 
Atlantic, and the elimination of the Canadian Exploration Incentive Program.

The principle of the Equalization Program, as enshrined in the Constitution, is to ensure that 
all provinces have sufficient revenues to provide a reasonably comparable level of public 
services at reasonably comparable levels of taxation. However, this program currently has a 
transfer ceiling which limits equalization payments despite increasing fiscal need. In order to 
satisfy	the principle of the equalization program, there should be no ceiling on the growth of 
equalization transfers. Indeed, an enrichment of the equalization program is needed.

Mr. Speaker, the Government of Newfoundland and Labrador is quite concerned about the 
negative impact the proposed GST will have on our people, our economy and our fiscal 
position.

The Government of Canada's prediction that there will be a smooth economic transition to the 
new tax is too optimistic. The inflationary impact of the GST will be higher in Newfoundland 
during the transition period than forecast by the Federal Government due to lower competitive 
pressures in. this Province and the taxation of transportation costs. Also, few of the long term 
economic benefits from the GST will be derived in this Province. The output from most 
Newfoundland industries will be influenced more by such factors as resource supply, world 
demand and prices for specific products, interest rates and exchange rates, than by the 
removal of the present federal sales tax on business inputs.

Removing the existing federal sales tax on businesses will result in shifting the tax burden 
almost entirely to individuals. The federal taxes paid directly by individuals will increase by 
about $130 million' annually, even after taking into consideration increased sales tax credits. 
The Federal Government contends that most of this increase in direct burden will be offset by 
lower prices resulting from the GST not being applied to businesses. I am skeptical that this 
will in fact be the case.

The GST will result in a serious deterioration in the fiscal position of the Government of 
Newfoundland and Labrador. Moreover, the increasing intrusion by the Federal Government 
into the consumption tax field will restrain our fiscal maneuverability and impede our ability 
to provide necessary services.

The administration and compliance complexities associated with two retail sales tax systems 
will be enormous. Not only are we concerned about the GST interfering with our provincial 
taxes, but also with the pending loss of tax administration staff to the expanded federal 
system.

Mr. Speaker, for all of these reasons, this Government is, has been. and will be firmly 
opposed to the Goods and Services Tax.

The Federal Government appears determined to proceed with its reform of the Unemployment 
Insurance Program despite opposition throughout the country. Under the new proposals, the 
Federal Government is no longer contributing its share, which averaged about 23 per cent 
during the 1980s. Instead, all contributions to the unemployment insurance fund are made by 
employees and their employers, at rates 15 per cent higher than last year. For many claimants 
there will be increases in the number of weeks required to qualify for unemployment 
insurance, longer waiting periods and shorter benefit periods. The traditionally high 
unemployment rates in this Province mean that these changes will be quite burdensome and 
will exacerbate the present crisis in the fishery. We estimate that the proposed change could 
remove more than $100 million from our economy, result in a decline of $15 million in 
Government revenues, and increase social assistance payments. This, Mr. Speaker, is not easy 
to accept.

Significant regional economic disparities have persisted in Canada over an extended period of 
time. Nowhere is this more evident than in Newfoundland and Labrador.

In order to reduce regional economic disparity resources must be targeted at the 
disadvantaged regions. The Federal Government's current regional and industrial assistance 
programs are too broadly applied to achieve that objective.

Mr. Speaker, the current high interest rate policy of the Bank of Canada is hurting this 
Province. The federal Government is keeping interest rates high in out of this surplus on 
current account, Government decided to begin the process of addressing the serious .unfunded 
liability in the province's Pension Fund by making a $21 million special contribution this 
year.

This substantial contribution furthers the process of ensuring the long term integrity of out 
pension plans.

Mr. Speaker, it is with considerable satisfaction and pride that. I am able to announce that in 
1990-91 we will achieve out second consecutive current account surplus, at. a level of $10.2 
million.

DR. KITCHEN:
Current account revenues are projected to grow by 5 per cent, on the strength of growth in
Provincial revenues. Federal transfers are expected to increase by only 2.1 percent.

Expenditures on capital account will be $367.5 million. Of this, $108.8 million will be offset 
by related revenues, leaving a net capital account requirement of $258.7 million. The 
combined current and capital budgetary requirement will be $248.5 million, which is 
approximately $5 million less than last year’s Budget. 

Mr. Speaker, when this Government took of f ice less than a year ago, we made a 
commitment to manage the people's finances in a prudent and responsible magneto We are 
fulfilling that commitment.

If we have to ensure out' future ability to provide the services out' citizens deserve, then we 
must not burden out selves and those that follow us with excessive debt. It is all too easy to 
say that prosperity is just around the content' so let us borrow firm out future and avail of it 
today. These has been too much of that in the past.

The total $5.2 billion. That is more than $9,000 fat' every man, woman and child in the 
Province. That will grow .again this year. The interest on that debt will be over $470 million 
this year. This is almost as much as we spend to operate out' primarily, elementary and 
secondary school system. It is equivalent to what we spend to operate all out hospitals.

Despite our achievement of a current account surplus in the 1989-90 fiscal year. out' total per 
capita budgetary requirement was the second highest budgeted by any Province last year. Out' 
credit which influences the interest rate we must pay on our debt and determines the markets 
in which we may bottom, remains at the lowest level assigned to any Province. Mr. Speaker', 
we do not have the capacity for unrestrained expenditure.

In developing this Budget, Government took its responsibilities very seriously.

Many of the expenditure reduction decisions were very difficult, and were not taken lightly. 
Others were part of a vitally important re-evaluation process, which we intend to continue 
throughout our mandate, whereby all programs and services will be regularly examined. Only 
through such a process can we ensure that our limited financial resources are used most 
effectively.

The expenditure plan contained in this Budget continues the efforts of my first Budget to 
eliminate spending that is no longer serving a useful purpose. We have further rationalized 
and downsized many programs and services. By doing so, we have lessened our need to 
borrow and freed up resources to address our most pressing expenditure priorities.

Mr. Speaker, this Government has established three priority areas for this Budget, three areas 
which are essential to ensuring a better future for our citizens. These high priorities are 
economic development, health care and education. We must advance in these areas despite a 
diminished commitment to them by the Federal Government.

Our attempts to achieve our fiscal goals through sound fiscal management have been 
interfered with by transfer cuts in the recent Federal Budget. Because of the very real need to 
sustain funding, particularly from out" health care and post-secondary education systems, we 
have, Mr. Speaker, been left with no choice but to recover the shortfall through our own 
revenue sources.

This Government does not take lightly a decision to raise taxes. In choosing the revenue 
measures for this Budget, we deliberately avoided regressive measures which would inflict an 
additional burden on those least able to pay.

Mr. Speaker because the Federal Government chose in its recent budgets to cut transfers for 
health and post-secondary education	by over $20 million commencing April 1, I am 
announcing today our intention to implement on August. in new tax, to be called the Health 
and Post-Secondary Education Tax.

This wi11 apply at a general rate of 1.5 per cent to employer payrolls in excess of $300,000 
each calendar year for primacy producers and secondary processors in the three renewable 
resource industries of fisheries, forestry and agriculture, the rate will be 0 per cent. This 
measure is expected to generate $15 million during 1990- 91 and $25 million in 1991-92.

The balance of the EP[<' shortfall will be recouped from two revenue sources. An additional 
$5 million in fees and licences will be generated by various measures spread across several 
departments. Our Corporation Capital Tax, which app lies to banks, trust and loan companies, 
will have a rate increase of one percentage point from 2 per cent to 3 per cent, for a $1.7 
million revenue gain.

This Government recognizes the impact the taxation system has on our economy. To ensure 
that the taxation system is enhancing rather than inhibiting our long term economic 
development strategy based on diversification and small business, the Department of Finance 
will complete four taxation studies this year.

First, our review of the implications of the proposed GST on Provincial consumption taxes, 
announced in my last year's Budget, is continuing. Emphasis is being placed on assessing 
whether broadening the Retail Sales Tax base to incorporate some goods and services 
presently excluded, while lowering the tax rate to maintain a constant revenue yield, would 
give the Province a fairer and simpler tax. Secondly, the school tax review already underway 
will be completed. For the interim, it must be stated clearly that the existing school tax system 
will be retained for at least another year. Thirdly, we will be scrutinizing, with a view to 
possible rationalization, many fees and licences which are annoyances to the businesses and 
people of the Province, rather than 'important tax revenues. Fourthly, the mining tax review 
begun last year will be concluded.

Mr. Speaker, this Government will pursue with vigour its sound and rational approach to 
economic development. The current fisheries crisis threatens to disrupt the social structure of 
our rural regions and encumber the substantial investments already made throughout the 
Province by individuals, businesses and Government in homes, equipment and infrastructure. 
This Government is determined to see that these investments of hard work and faith in our 
Province will bring rewards to those who persevere to secure a brighter economic future. A 
strategy which emphasizes long term, permanent economic development and diversification 
will be one of the principle initiatives of this Government.

Mr. Speaker, this Government has moved to establish an Economic Recovery Commission as 
the focus of its effort to implement this strategy. Funding of $2.1 million has been provided 
for the Commission in this Budget compared with $900,000 spent in the shorter period last 
year.

As a result of considerable consultation between the Minister and senior officials of the 
Department of Development, and the Commission, Government has decided to combine the 
Newfoundland and Labrador Development Corporation and parts of the Department of 
Development into a new Crown corporation with a mandate to deliver all local development 
and business programs and services to assist new and existing business enterprises. There will 
be five regional offices St John's, Clarenville, Gander, Corner Brook and Goose Bay, with 
field offices reporting to them in each region. This structure will provide one-stop access lo 
Government with a minimum of tape, for small and medium-sized enterprises requiring 
assistance and services. It is the intention of Government to allow a substantial amount of 
decision making let be made at the regional level, in line with an election commitment. The 
new corporation will report directly to the Minister of Development. Mr. Speaker, to cover the 
additional cost of this corporation an amount of $1 million has been approved bringing its 
total budget Lo $13.9 million this year.

Mr. Speaker, in keeping with out' focus on long term development this Government 
recognizes the importance to our economy of technological change. I am pleased to announce 
that. Financial support has been provided by the Province in the amount of $300,000 for the 
continued work of the Newfoundland and Labrador Science and Technology Advisory 
Council. More details of our Government's policy in this area, indicating the role and 
activities of the Council, will be released shortly.

Government looks forward to pursuing on a priority basis new federal-provincial agreements 
in several areas including tourism and cultural-historical development, forestry and minerals.

Mr. Speaker, I would like to highlight tourism for its potential positive impact on the 
economy in rural and urban regions both in the short traffic and in the long term.

This Government has been successful in negotiating a Comprehensive Labrador Subsidiary 
Agreement with the Government of Canada. The tourism component of this agreement will 
see $800,000 in new money, cost-shared with the Federal Government, go to various tourism 
related projects in that region. Funding is also provided to cover the cost of producing a new 
tourism marketing video which will reinforce our efforts to portray the Province as a distinct 
and attractive tourist destination. Grants for festivals and special events will also be increased.

This Government sees the Province not only as a seasonal summer destination but also as an 
all-season tourist alternative. During the past year this Government provided over $1 million 
for Marble Mountain. I am pleased to report today that we have budgeted considerably more 
funding for the Marble Mountain Development Corporation this year. With this additional 
investment, we get closer to generating the private sector interest needed to develop this area 
into an all season tourist resort. The benefits to the local economy and to the Provincial 
treasury will be substantial.

At a time when budgetary funds are scarce, I am pleased to indicate that we are maintaining 
our tourism marketing budget at an all time high.

Mr. Speaker, this Government will not ignore the significant opportunities that exist beyond 
our shores. Particularly do we see the Pacific Rim as a source of investment, a market for our 
products, and a wealth of business acumen and technical know how. To enhance our 
promotional efforts in these nations we arc providing $450,000 for an Asian initiative to raise 
the level of awareness for investment opportunities in this Province. We hope to identify 
potential joint venture and strategic partnerships as well as new products we can expose to 
these markets. We believe this initiative offers great potential for the growth of trade and 
investment. Hon. Members should know that hundreds of millions of new investment dollars 
are entering Canada each year under the Business Immigration Program. Newfoundland and 
Labrador will be pursuing these dollars under this Asian initiative.

Mr. Speaker, the base of a diversified Newfoundland economy will continue to be the 
resource sectors.

Funds are provided to continue our forestry programs in anticipation of a renewed Forest 
Resources Development Agreement with the Government of Canada. The current Agreement 
expires on March 31, but we are confident that a new Agreement will be concluded shortly. A 
$12.B	million	 Forest Workers Training Agreement was signed recently with the Federal 
Government. This unique arrangement will see over $3 million spent annually over the next 
four years to train over 300 young men and women in many aspects of forest work, especially 
silviculture.

Funding is provided to complete the work of the Agri-Foods Task Force. This Government 
believes that we have not yet reached our potential in agricultural production. The report of 
the Task Force should assist Government in implementing a long Term development strategy.

Geo scientific surveys carried out by the Department of Mines and Energy have played a 
major role in the increase in mineral exploration in the Province. Last year, when the 
continuation of federal cost sharing was in doubt, we increased funding to maintain this 
important activity. Government will continue these surveys this year, although the level of 
activity will be reduced in keeping with our current program of fiscal restraint. We anticipate 
that the new Mineral Development Agreement, now in the final stages of negotiations with 
the Federal Government, will provide additional funding for these surveys.

Mr. Speaker, the state of the fishery is of deep concern to the entire Province. I will not try to 
minimize this concern. At least some segments of the fishery, some plants and some 
communities are facing lean and unsettled times. This troubles me and the other Members of 
this Hon. House, not only because we have the responsibilities of Government, but also 
because we have family and friends in these communities, and because we share the strong 
attachment our people have to their home and to their Province.

But there will be a fishery next year. Plants will open and people will be employed. The same 
is true for the year after that, and for as many years to come as any of us can realistically. This 
Government will continue to support and encourage that fishery, and remains resolutely 
committed to the fishing industries being one of the cornerstones of our economy.

In this regard, funding is approved to operate four new Marine Service Centres. Funding to 
the Fisheries Loan Board (or incentives and assistance will be maintained. Cost-shared 
spending under the Canada/Newfoundland Inshore Fisheries Development Subsidary 
Agreement will increase by 25 percent to $3.7 million.

The fisheries component of the Labrador Subsidiary Agreement will provide $7 million of 
support to the industry over a five year period. Current and capital expenditures of $1.5 
million have been ear-mar-ked for- this fiscal year-. Details of the fisheries component of the 
Agreement will be announced in the near- future. Government is confident that this initiative 
will have extremely positive implications for the Coastal Labrador Fishery.

For the first time, Mr. Speaker, provision has been made in the Budget to facilitate the 
distribution of surplus fish landings during the glut season, and to distribute fish to processing 
plants in Labrador-. An amount of $300,000 has been allotted.

DR. KITCHEN:
While we are deter-mined to maintain our- financial Support for the industry, the shortage of 
fish stocks and consequent reduction in quotas will require an additional response.

This Government already has acted by implementing the Adjustment program for- fish Plant 
Workers which will provide $9 million to ensure that workers in the processing plants in 
Trepassey, Grand Bank and Gaultois will have an adequate notice of termination.

The magnitude of the supply crisis for some communities, however-, goes beyond what the 
Province of Newfoundland can be expected to bear- alone. Nor should we have to bear- this 
alone because the supply crisis is not of our making. The jurisdiction and responsibility to 
manage the stock lies with the Federal Government. They have to accept the reality that their 
quota reductions have led to direct consequences that threaten the existence of communities in 
this Province and throughout Atlantic Canada. It is not the fishermen, plant workers or fish 
companies who control the state of the stocks, yet it is they who suffer- from the 
mismanagement of the resource. The responsibility of the Federal Government to act is clear-. 
One- industry communities cannot be expected in the short time given to absorb the shock of 
drastic quota r-educations.

Last week's Throne Speech clearly outlined this Government's position with respect to the 
supply problem in the fisheries. We have already indicated to the Government of Canada that 
the Province is prepared, within its financial capability, to share the cost of a comprehensive 
fisheries revitalization and economic diversification program. A broadly based economic 
response program must be implemented to address the social and economic consequences of 
the Lock rebuilding process. This Government will continue to press for federal action.

Mr. Speaker, this Budget reflects Government's continued commitment to the health care 
system. The budgetary allocation to health will increase by $74 million, a growth rate of 10 
per cent over the 1989-90 fiscal year.

In the recent Throne Speech, the Government outlined its concern about the considerable 
pressure that has been exerted on the health system in recent year's and indicated that 
planning is now underway to develop a framework for a comprehensive new community 
Health Care program.

Government is concerned about beds being closed in medical facilities throughout the 
Province, due to insufficient funding. Mr. Speaker, in this Budget, we have made funding 
available to these institutions to enable them to open eighty-eight of those beds.

This year, additional funding will be provided to the General Hospital to enhance critical care 
services, with particular emphasis on cardiac surgery. I am pleased to announce that the 
General Hospital will receive funding to open fifteen additional beds, including four beds in 
the newly redeveloped critical care area. A total of forty additional beds are being opened at 
hospitals in Gander, Grand Falls and Corner Brook.

Government also recognizes the pressures on the Province's nursing homes, particularly in 
view of the changing demographics of our society. To assist in meeting the ever increasing 
demand for chronic care in nursing homes, funding will be provided to enable the Agnes Pratt 
Home to open thirteen additional beds. Also, funding will be provided to open twenty 
additional beds at the Dr. Hugh Twomey Health Centre in Botwood.

Mr. Speaker, Government continues its commitment to increase the number of nursing 
positions in the health care system. In my last Budget, 1 announced the establishment of a 
minimum of forty-five new nursing and resident care positions in the health system. 1 am 
pleased to announce today that another thirty three nursing positions will be approved for' the 
health system by October 1. As well, effective April 1 funding will be provided for thirty-two 
additional residential care staff [or the Province's nursing homes. All of these nursing and 
other positions are in addition to those required to open the eighty- eight beds referred to 
previously.

Additional funding is provided to assist in integrating children with disabilities into the 
regular school system and to met their' special health care needs.

This year, in cooperation with Health and Welfare Canada, the Department of Health will 
commence a five- year initiative to address cardiovascular disease through public education 
and prevention. Also,	funding will be provided to expand our initiatives in public education 
with respect to AIDS prevention.

The Government recognizes the importance of the services provided by the Newfoundland 
Cancer Treatment and Research Foundation. I am very pleased to announce a joint venture 
with the Cancer Foundation under which Government will provide $5.4 million of the 
projected $6.9 million cost of new facilities, adjacent to the Health Sciences Center.

In 1990-91, $1.9 million of the Government's commitment would be provided to enable this 
project to get underway.

As a further step in rationalizing health care services on the Burin Peninsula, I am pleased to 
announce that funds are being provided for the planning of a new community health centre for 
Grand Bank and for a new 40 bed nursing home in st. Lawrence.

Planning funds will be provided for the redevelopment of James Paton Memorial Hospital in 
Gander, for the redevelopment of Brookfield Hospital, for new community health centres and 
long term care facilities at Burgeo and Port Saunders, and for the redevelopment of the 
Interfaith Senior citizens Home in Corner Brook. The Government will also be taking 
preliminary steps to assess the manner in which the need for nursing home facilities in the 
Port aux Basques area can best be addressed. Also, funding is allocated for the completion of 
the Roddickton Community Health Centre.

Mr. Speaker, in total $22.8 million will be allocated in this Budget to support capital 
improvements in the health care system.

Mr. Speaker, education is a key component of this Government's long term economic 
strategy. We are committed to improving the quality and accessibility of educational 
opportunities throughout the Province. The measures announced today will enhance the 
efficiency and equity of our education programs.

Funding has been provided to increase the per pupil operating grants to school boards by /, per 
cent. The School Tax Equalization Grant will be maintained at $10 million this year, up from 
$4.5 million in 1988. The budget (or building and equipping schools will be $27 million, 
including $1 million for making school buildings more accessible to people with disabilities. 
As well, there will be a $200,000 increase in scholarship funding for secondary school 
students.

Mr. Speaker, I am pleased to announce that we are making an additional $1.7 million 
available for student aid, which represents an 11 per cent increase in funding over last year.

Government's recent White Paper on post-secondary education presents proposals to improve 
greatly the equality, excellence and efficiency of the post- secondary education system in this 
Province. Consistent with the high priority placed on education, capital funding is provided 
for the planning of both the Central Newfoundland Campus and the expansion of the Grenfell 
College in Corner Brook.

The $10 million capital budget for Memorial University includes provision for an extension to 
the Arts and Administration Building, improvements to the Schools of Pharmacy and 
Nursing, as we 11 as for the construction of a facility for small animal care.

Funding of $1.7 million is allocated 'to commence the construction of an $8 million extension 
to the Fisher Institute in Corner Brook. Planning funds have been provided for a Centre for 
Engineering Technology in st. John's. The capital budget for the Marine Institute will exceed 
$10 mill ion. These include funds for the establishment of a Simulator Training Centre and an 
Offshore Survival Centre, both to be financed primarily from the Offshore Development 
Fund. Mr. Speaker, I am pleased to announce that this year Education's total capital budget 
will be $60 million.

The Department of Education will work with the education community to develop and 
implement specific measures to improve efficiency and cost-effectiveness.

Mr. Speaker, the Department of Education has launched a major initiative to prepare high 
school students to meet the modern challenges of mathematics, science and technology, by 
using savings achieved this past year to purchase computers and other instructional materials. 
This $2 million initiative, $1.5 million of which was for computers, will result in a significant 
improvement in the quality of high school education in the Province.

Government Pension Plan 
Mr. Speaker, in the 1989 Budget Speech, I expressed Government's concern with the financial 
condition of the four pension plans covering public servants, teachers, uniformed services 
personnel and MHAs. Because of this concern, Government appointed a Commission of 
Enquiry On Pensions to review the plans. The final Report of the Commission should be 
ready for Government's consideration in the very near future. I am confident that this Report 
will be an essential ingredient in Government's formulation of appropriate measures to resolve 
the financial difficulties being experienced by the pension plans. With the financial position 
of Government's pension plans in mind, Government has decided to make an immediate 
special payment of $21 million into the Pension Fund in 1989-90. This payment, made during 
a time when the Province's economy is feeling the effects of problems in the fishery and a 
general slowdown in other areas, should give a clear indication to all employees of 
Government's commitment to doing its share towards putting the pension plans on a sound 
financial basis.

Mr. Speaker, in view of the fact that the Commission of Equity Report is not yet available, 
Government has decided to defer for the time being any decision regarding increases to 
pensioners. This subject will be addressed in the near future 3ftcr reference to the 
Commission's Report and in the context of possible indexation of Government's pension 
plans.

Mr. Speaker, Government views with alarm the dramatically increasing incidence of child 
abuse referrals in this Province. Child abuse is not a new phenomenon and neither is it unique 
to this Province. A large segment of our society now appears ready to report openly and to 
discuss this complex and unacceptable problem. Accordingly, I am pleased to announce that 
funding has been provided in the Budget for 50 new front-line positions in child welfare 
services.

Government is committed to improving the quality and quantity of services to those who need 
assistance of various kinds. To this end, I am pleased to announce that allowances paid to 
social assistance recipients will increase by four per cent, effective May 1. Allowances for 
foster parents will also increase by four per cent while the clothing allowance for foster 
children will increase by 20 per cent.

Mr. Speaker, $8.3 million has been provided to accelerate construction of the new young 
offender’s facility at Whitbourne.

Mr. Speaker, one of the great success stories of this Province is the outstanding community 
service provided by an organization called the HUB, which provides jobs, recreation, and 
personal services to physically disabled persons. We are aware of the extremely crowded 
conditions under which they presently operate. I am, therefore, very proud to announce that to 
assist them to provide additional opportunities Lo those among us who are physically 
disabled, this Government is enabling the HUB to extend their building by providing a capital 
grant of $1 million.

The Department of Social Services is one of the most decentralized departments in 
Government with 53 offices located throughout the Province. We have approved the 
development of a major computer system to facilitate and further enhance the delivery of 
social services and programs to all regions of the Province.

Mr. Speaker, both the Royal Newfoundland Constabulary and the Royal Canadian Mounted 
Po lice are faced with increased workloads, including cases involving child abuse. 
Government is committing sufficient funds for the deployment of up to five per cent more 
police officers across the Province. This will be accomplished through the hiring of additional 
officers and the more effective re-deployment of existing officers now performing civilian 
work. This measure, combined with the allocation of additional resources for front-line social 
work positions, represents a major step in the prevention of the abuse of children, and will 
provide additional resources to assist the police forces in all areas of their work.

Mr. Speaker, Government will continue to provide several programs to help women, students, 
older workers and youth take advantage of job opportunities. We will adhere to the objective 
of creating meaningful, long term employment for all of our labour force.

The Graduate Employment Program to help post-secondary education graduates obtain job 
related experience will continue. The Provincial Government will participate in the joint 
Federal-Provincial Program for Older Worker Adjustment.

Provincial funding will continue for the Canada-Newfoundland Employment strategy 
Program, with major emphasis being placed on enabling people in the 16 to 24 age group to 
make the transition from school to work. Funding is provided through this program for the 
ongoing development of a provincial Career .and Labour Market Resource Centre. A 
computer network will ensure that career and labour market information is easily accessible in 
all areas of the Province.

This Government is firmly committed to improving the economic and social well-being of 
women. The Budget is providing $6.3 million to support pay equity in the health sector. 
Operating funding of $100,000 is provided for a new transition house in Gander. Eligibility 
criteria have been modified to enable more sing1e--parent families to obtain subsidized day 
care. Changes in the student aid program will provide for single parents and married students 
additional funding estimated to reach $500,000. There is more money for programs to assist 
women obtain employment, including $500,000 for the Women in Successful Employment 
Program, a program of flexible learning, counseling and other self-development assistance. 
There will be a continued funding of $300,000 for the Newfoundland and	Labrador Advisory 
Council on the Status of Women and for the Interagency Committee on Violence Against 
Women. These and other initiatives, Mr. Speaker, demonstrate this Government's continued 
commitment Lo women's issues.

Mr. Speaker, this Government will continue its efforts to improve the Province's road system 
through an extensive construction program. We have provided $80.5 million for further road 
upgrading, primarily of the Trans Canada Highway, under the ERDA agreement and the 
Newfoundland Transportation Initiative. Expenditures under the Provincial Road and Bridge 
Program will total $30 million this coming year. Under the Comprehensive Labrador 
Subsidiary Agreement, we are providing $3 million for the Charles River Bridge at Lodge. 
Bay Labrador.

This Government is Providing improved fancy services to the island communities of the 
Province. We are entering the second year of a three year plan to reduce marine services rates 
to equivalent road transportation costs. Construction will begin on a new ferry with ice 
breaking capabilities for the Fogo Island service. The vessel will b() built at the Marystown 
Shipyard at a cost of $24 million, $4 million of which will be spent this coming year. Also, 
$12.5 million is allocated for the operation of the Provincial ferry system.

Mr. Speaker, Government will support the expenditure of $55 million this year on water, 
sewer and .paving projects in communities throughout the Province. Details have already 
been announced to facilitate early tendering and construction.

Government has approved a capital budget of $98.7 million for the Newfoundland and 
Labrador Housing Corporation. These funds will be used to deliver over 300 new social 
housing units throughout the Province, and to upgrade approximately 2000 homes through the 
RRAP program.

Newfoundland and Labrador Hydro expects to spend $97 million on capital projects' to 
improve electrical generation and transmission facilities.

Mr. Speaker, this Budget has been prepared within an environment of adversity. The fishery is 
beset with serious problems. The economy is slowing in other areas, though it is not without 
its bright spots. The Federal Government's high interest rate policy is restraining business in 
parts of the country, like Newfoundland, where restraint is not needed. The recent Federal 
Budget has reduced EPF transfers for health and post-secondary education services, at a time 
when the need for those services is great. And, we will feel the impact of the GST in this 
Budget year, an impact which we know will be considerable in many different ways.

Despite this difficult environment, the Government has taken important initiatives towards 
achieving its objectives in economic development, health care and education. We have shown 
our sincere commitment to solving the problems of our pens ion plans by making a sizeable 
special payment into the Pension Fund. We have restrained Government's operating 
expenditures both by general cuts across departments and by specific measures to eliminate 
wasteful and unproductive expenditures. And where we have raised additional revenues, we 
have done so without regressive tax measures.

In summary, Mr. Speaker, the fiscal and economic plan contained in this Budget is based 
upon a prudent and realistic assessment of what we can achieve over the coming year. We are 
refocusing both the substance and the delivery mechanisms of Government's programs to 
meet the needs of the people of this Province.

Mr. Speaker, a major transformation of the Province's economy cannot be achieved overnight. 
This Budget clearly demonstrates, however, that the groundwork has been set for creating a 
stronger economy and a meaningful and productive lifestyle for Newfoundlanders and 
Labradorians in all regions of the Province.

Thank you, Mr. Speaker.