$1.27-billion surplus

Dave Bartlett
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Unions told to take offer while they can; 'They can call me a grinch,' Kennedy

The province's projected surplus for this year has more than doubled. In April's budget, then-finance minister Tom Marshall predicted the province would end the fiscal year with an extra $544 million.

But when Finance Minister Jerome Kennedy gave his economic update Tuesday, that number had ballooned to $1.27 billion - more than double the prediction - and it could still go higher.

Finance Minister Jerome Kennedy discusses the province's fiscal update at a news conference Tuesday at Confederation Building in St. John's. - Photo by Joe Gibbons/The Telegram

The province's projected surplus for this year has more than doubled. In April's budget, then-finance minister Tom Marshall predicted the province would end the fiscal year with an extra $544 million.

But when Finance Minister Jerome Kennedy gave his economic update Tuesday, that number had ballooned to $1.27 billion - more than double the prediction - and it could still go higher.

Deficit still possible

However, Kennedy cautioned that the volatile price of oil and other natural resource-based commodities could still see the province run a deficit as early as next year.

"The measures recommended to stimulate the economy are the very things that our government has been doing far in advance of this economic downturn," said Kennedy.

He said the province is spending on infrastructure - $500 million this fiscal year - and $1 billion more over the next two years.

That spending, along with new resource projects such as the Hebron offshore project and the Vale Inco hydromet facility in Long Harbour, is creating jobs.

Kennedy expects those projects to create 10,750 jobs next year and an additional 350 the following year.

He also said the government has put $342 million back into the pockets of taxpayers.

Kennedy said the province now has the lowest tax rates in Atlantic Canada.

Reducing the debt is also high on Kennedy's priorities.

The surplus will be put directly on the debt, reducing it to an expected $9.2 billion by the end of March.

Kennedy said if the province does have to borrow money to cover a deficit in coming years, at least its credit rating would be better and its total debt will be lower.

"We are now saving over $200 million each and every year in our borrowing costs. Money that we were paying to lenders is now being invested in Newfoundlanders and Labradorians," said Kennedy. "We are still paying out almost three quarters of a billion dollars to service the debt, which is too much."

But no matter how good the news was, Kennedy warned public-sector unions that the province's offer of a 20 per cent wage increase over four years may soon be withdrawn.

Kennedy said he wrote a letter to the unions Friday telling them that.

"The unions have been informed that unless a deal is reached by the end of this year that we cannot guarantee that the 20 per cent will be on the table after that date. So much depends on the price of oil and the state of the economy," he said.

"While we cannot guarantee the 20 per cent wage offer will be on the table after Dec. 31, we will guarantee an eight per cent raise in Year 1 for our public employees. However, that is contingent on the acceptance of a four-year agreement."

When pressed by reporters Kennedy said, "This is the most generous wage package that exists in the country right now."

"We're attempting to bring this to a head, to obtain some economic certainty as we go into our budget process," he continued.

One reported commented that the nurses union will call him a grinch.

"They can call me a grinch," replied Kennedy without hesitation.

dbartlett@thetelegram.com

Geographic location: Hebron, Long Harbour, Atlantic Canada

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Recent comments

  • Smiley
    July 02, 2010 - 13:33

    Does everyone now understand why Williams put Kennedy in this position.
    'Pull the strings and watch the puppet go'

  • Carlson
    July 02, 2010 - 13:33

    I guess all you negative people would like to see them divide the 1.27 billion among all Newfoundlanders. Some people act so stupid. The Williams' government has done a great job and is finally turning this province around. As for people who can't afford Christmas...I bet they don't work, but can afford smokes, beer, and gambling.

  • Graham
    July 02, 2010 - 13:32

    When will Williams, Wiseman and Kennedy admit ITS NOT ABOUT THE MONEY its about the QUALITY OF HEALTH CARE. In typical Williams fashion they throw money at a problem and hope it goes away. I live in Clarenville and we have a lovely Seniors residence next to the Hospital but because of SHORTAGES OF STAFF its sitting there not being run at full capacity. ITS CALLED A NURSING SHORTAGE Jerome. Its called a CRISIS Ross. Its called disfunctional Danny. The best all three of you can come up with is a threath to the nurses TAKE IT OR LOOSE IT. No wonder Danny surrounds himself with idiots like Kennedy and Wiseman. They see hear and do only what Danny lets them see hear and do. The Williams Circus continues.

  • George
    July 02, 2010 - 13:30

    What have this government done? Nothing. Williams have just sat back and let the money roll in from previous deals.

  • Show me
    July 02, 2010 - 13:30

    Would really like to see the data on where this investment is. Must be in the personal portfolios of the members of the house since the average person has not seen anything. More lay-offs, plants being closed, credit protection actions on local companies. Yup, lots of investment Jerry.

    How's about all the unemployed callng you the Grinch as well. Nothing to show to the population save for a paper with digits on it. Anyone can do that, real concrete action was needed a long time ago. Your planning comes too late now for many. Hope that lots of this surplus will be fed into social programs to keep people fed this winter rather then on your travel and expense account.

  • Timboy
    July 02, 2010 - 13:25

    Jerome looked like a schoolboy stumbling on his words reading this yesterday. He's miles out of his league on this portfolio. Looked unconvincing as a finance minister (ala Flaherty) to be honest. What to do? $500 million on the debt and the rest for many very rainy days ahead given that we still have one of the highest unemployment rates in the country and much more layoffs to come for 09 / 10

  • Timboy
    July 02, 2010 - 13:23

    Way to go b'ys on comments so far and Carlson from Cupids: Let's see the grin on your face when Danny shows you the bill for his Have party in March he's gonna bill the taxpayer for! Then we'll be all HAD !

  • Mark
    July 02, 2010 - 13:22

    Hey Carlson from Cupids - here's a question for ya: Where does all this money come from? Voisey's Bay? Hibernia? White Rose? Terra Nova? IOC? Surely not those giveaways from those past governments led by traitors.
    Surely all this wealth comes from brilliant investments in mink and emu farms, boot factories and lube shops.

    Right?

  • AB
    July 02, 2010 - 13:19

    I agree with Busy Bayman from Carbonear. Look at the rest of the world. Im in Fort Mac right now and there is a lot of talk of layoffs and slowing down. So it will hit NL, or is at least a good assumption to think it will. Hope for the best and prepare for the worst.

  • Bert
    July 02, 2010 - 13:17

    Danny and Jerome you people has got to go!!! You both are ruining everything, If you hadn't come along the teachers pension fund would not have the money put back in that the liberals had taken out. Roger would have Hydro privatised. The out-migration would still be high. We would not have gotten the 2.2 billion that you negotiated, which George from Bay Roberts said you did nothing and just got the praise from past Govt.s. The poll today in the telegram says 66% agree with your govt.'s agenda and 21% disagree. Yes Danny you have got to go, things are too bad here since you came in. Next our unemployment rate will start going down. I'm afraid to wake up in the morning and see what more bad news you have for us. Partial ownership in future oil deals, bad!!! What will we ever do!!!

  • W
    July 02, 2010 - 13:14

    Bert from GFW:

    Outmigration got WORSE in the first four years of the Danny Williams regime, not better. In the last three months of the former government, there was net-inmigration, for the first time since 1992. Throughout 2004 through 2007, net outmigration got steadily worse, to the point that at the depths of it, the province was losing the population of Wabush every quarter.

    The recent turnaround, if past patterns are any clue, may have more to do with the looming North American recession than with any of Danny Williams-Government's own policies. When the North American economy slows down there are less attractive reasons for people to leave, and more attractive reasons for people who have lost their jobs in Ontario, the West, or the Maritimes, to return home to throw themselves on the hospitality of family and friends.

    There is also, in the latest spate of in-migration, a strong suggestion in the statistics of it being driven by retirements. The career-age population brackets, according to the government's own statistics, are NOT growing. They are still shrinking.

    It's about time for the public and media to stop swallowing the provincial government spin about demographics, and to start seriously kicking the tires.

  • Mr
    July 02, 2010 - 13:12

    Show me the money - if they published the numbers would you even read them or are just looking for an excuse to complain?

    How about next time you just randomly tap your keyboard, your contribution would probably make more sense...

  • Bob
    July 02, 2010 - 13:11

    Show me the money from St. John's...You haven't a clue my poor soul..Do you know the war is over??

  • Tim
    July 02, 2010 - 13:09

    Busy Bayman wrote - I don't want to be the one in 3-5 years time (or sooner) to be living on kraft dinner and bread every day to survive.

    Did you not get the memo? Lots of families in the province are in that boat right now. What about them? Should this surplus not be used to help your fellow residents with employment NOW, or would that be too much of doing the right thing?

    Worry about the big boys club while crushing the poor never has worked anywhere. Sooner or later you and I will pay for it with an increase in crime or taxes to play catch-up for leaving out a majority of the population. Something needs to be done now, and not more meetings and dinners at $500.00 a plate either. Real development now, a real path forward today not next month or year.

    Happy Holidays to those that can afford it. The rest the doors to the soup kitchens will open soon.

  • Busy Bayman
    July 02, 2010 - 13:09

    I guess most people complain wether we're in the green or in the red budget wise. I think the current Williams government is doing a wonderful job, and I'm sure that the majority of people in this province agrees. I'm alot more satisfied knowing that we have 1.27B to the good than nearly 1B under. Just because we don't see some concrete action with regards to job loss and the like is no fault of the governments. One lesson in your life would be 'take what you can get' because when it's not on the table anymore you'll be sorry. Look at the mill workers in GF! They got greedy and wouldn't accept the offer, now they're living on the pokey and have lots of disgust with the owner/operator and the government. And the same will go for the nurses, take it or leave it. My guess is they'll leave it. Sure, go on strike but you know once it becomes an issue to the publics health then you'll get mandated back to work. I'm sure I'd love to get 20% increase in pay over 4 years. Unions make people too much accustomed to getting everything they want. Time for a reality check. Williams gov is hard on the big oil companies to get what he wanted and the same goes for the workforce that make up this province. It's the governments duty to do what is right for our future and if that means save money for the long run then so be it. If we waste it all now because some greedy people hear we have millions in surplus, then don't make everyone pay for it. I don't want to be the one in 3-5 years time (or sooner) to be living on kraft dinner and bread every day to survive. Time for a reality check people, read the papers or watch the news, the world is in sharp decline and recession.

  • Show me
    July 02, 2010 - 13:09

    If they fail to publish the numbers and show the people where this is going and what has been done, what good is talking about it. Seems like a few people will back the Williams government to the end no matter what. I guess they have been able to retain employment and benefit from the money that will be spent on them. Screw the rest that will go without now and be without a job next year.

    Maybe Danny should raise taxes on business owners since they think this is such a good thing, and give it to the poor for a change. Na, just get out of the province so that the rich get richer is a better answer I see.

    When the wells run dry as the fishery did what and who will you have if not the poor slobs to bash down a little further?

  • Smiley
    July 01, 2010 - 20:22

    Does everyone now understand why Williams put Kennedy in this position.
    'Pull the strings and watch the puppet go'

  • Carlson
    July 01, 2010 - 20:21

    I guess all you negative people would like to see them divide the 1.27 billion among all Newfoundlanders. Some people act so stupid. The Williams' government has done a great job and is finally turning this province around. As for people who can't afford Christmas...I bet they don't work, but can afford smokes, beer, and gambling.

  • Graham
    July 01, 2010 - 20:21

    When will Williams, Wiseman and Kennedy admit ITS NOT ABOUT THE MONEY its about the QUALITY OF HEALTH CARE. In typical Williams fashion they throw money at a problem and hope it goes away. I live in Clarenville and we have a lovely Seniors residence next to the Hospital but because of SHORTAGES OF STAFF its sitting there not being run at full capacity. ITS CALLED A NURSING SHORTAGE Jerome. Its called a CRISIS Ross. Its called disfunctional Danny. The best all three of you can come up with is a threath to the nurses TAKE IT OR LOOSE IT. No wonder Danny surrounds himself with idiots like Kennedy and Wiseman. They see hear and do only what Danny lets them see hear and do. The Williams Circus continues.

  • George
    July 01, 2010 - 20:18

    What have this government done? Nothing. Williams have just sat back and let the money roll in from previous deals.

  • Show me
    July 01, 2010 - 20:18

    Would really like to see the data on where this investment is. Must be in the personal portfolios of the members of the house since the average person has not seen anything. More lay-offs, plants being closed, credit protection actions on local companies. Yup, lots of investment Jerry.

    How's about all the unemployed callng you the Grinch as well. Nothing to show to the population save for a paper with digits on it. Anyone can do that, real concrete action was needed a long time ago. Your planning comes too late now for many. Hope that lots of this surplus will be fed into social programs to keep people fed this winter rather then on your travel and expense account.

  • Timboy
    July 01, 2010 - 20:11

    Jerome looked like a schoolboy stumbling on his words reading this yesterday. He's miles out of his league on this portfolio. Looked unconvincing as a finance minister (ala Flaherty) to be honest. What to do? $500 million on the debt and the rest for many very rainy days ahead given that we still have one of the highest unemployment rates in the country and much more layoffs to come for 09 / 10

  • Timboy
    July 01, 2010 - 20:08

    Way to go b'ys on comments so far and Carlson from Cupids: Let's see the grin on your face when Danny shows you the bill for his Have party in March he's gonna bill the taxpayer for! Then we'll be all HAD !

  • Mark
    July 01, 2010 - 20:06

    Hey Carlson from Cupids - here's a question for ya: Where does all this money come from? Voisey's Bay? Hibernia? White Rose? Terra Nova? IOC? Surely not those giveaways from those past governments led by traitors.
    Surely all this wealth comes from brilliant investments in mink and emu farms, boot factories and lube shops.

    Right?

  • AB
    July 01, 2010 - 20:01

    I agree with Busy Bayman from Carbonear. Look at the rest of the world. Im in Fort Mac right now and there is a lot of talk of layoffs and slowing down. So it will hit NL, or is at least a good assumption to think it will. Hope for the best and prepare for the worst.

  • Bert
    July 01, 2010 - 19:57

    Danny and Jerome you people has got to go!!! You both are ruining everything, If you hadn't come along the teachers pension fund would not have the money put back in that the liberals had taken out. Roger would have Hydro privatised. The out-migration would still be high. We would not have gotten the 2.2 billion that you negotiated, which George from Bay Roberts said you did nothing and just got the praise from past Govt.s. The poll today in the telegram says 66% agree with your govt.'s agenda and 21% disagree. Yes Danny you have got to go, things are too bad here since you came in. Next our unemployment rate will start going down. I'm afraid to wake up in the morning and see what more bad news you have for us. Partial ownership in future oil deals, bad!!! What will we ever do!!!

  • W
    July 01, 2010 - 19:53

    Bert from GFW:

    Outmigration got WORSE in the first four years of the Danny Williams regime, not better. In the last three months of the former government, there was net-inmigration, for the first time since 1992. Throughout 2004 through 2007, net outmigration got steadily worse, to the point that at the depths of it, the province was losing the population of Wabush every quarter.

    The recent turnaround, if past patterns are any clue, may have more to do with the looming North American recession than with any of Danny Williams-Government's own policies. When the North American economy slows down there are less attractive reasons for people to leave, and more attractive reasons for people who have lost their jobs in Ontario, the West, or the Maritimes, to return home to throw themselves on the hospitality of family and friends.

    There is also, in the latest spate of in-migration, a strong suggestion in the statistics of it being driven by retirements. The career-age population brackets, according to the government's own statistics, are NOT growing. They are still shrinking.

    It's about time for the public and media to stop swallowing the provincial government spin about demographics, and to start seriously kicking the tires.

  • Mr
    July 01, 2010 - 19:50

    Show me the money - if they published the numbers would you even read them or are just looking for an excuse to complain?

    How about next time you just randomly tap your keyboard, your contribution would probably make more sense...

  • Bob
    July 01, 2010 - 19:48

    Show me the money from St. John's...You haven't a clue my poor soul..Do you know the war is over??

  • Tim
    July 01, 2010 - 19:44

    Busy Bayman wrote - I don't want to be the one in 3-5 years time (or sooner) to be living on kraft dinner and bread every day to survive.

    Did you not get the memo? Lots of families in the province are in that boat right now. What about them? Should this surplus not be used to help your fellow residents with employment NOW, or would that be too much of doing the right thing?

    Worry about the big boys club while crushing the poor never has worked anywhere. Sooner or later you and I will pay for it with an increase in crime or taxes to play catch-up for leaving out a majority of the population. Something needs to be done now, and not more meetings and dinners at $500.00 a plate either. Real development now, a real path forward today not next month or year.

    Happy Holidays to those that can afford it. The rest the doors to the soup kitchens will open soon.

  • Busy Bayman
    July 01, 2010 - 19:44

    I guess most people complain wether we're in the green or in the red budget wise. I think the current Williams government is doing a wonderful job, and I'm sure that the majority of people in this province agrees. I'm alot more satisfied knowing that we have 1.27B to the good than nearly 1B under. Just because we don't see some concrete action with regards to job loss and the like is no fault of the governments. One lesson in your life would be 'take what you can get' because when it's not on the table anymore you'll be sorry. Look at the mill workers in GF! They got greedy and wouldn't accept the offer, now they're living on the pokey and have lots of disgust with the owner/operator and the government. And the same will go for the nurses, take it or leave it. My guess is they'll leave it. Sure, go on strike but you know once it becomes an issue to the publics health then you'll get mandated back to work. I'm sure I'd love to get 20% increase in pay over 4 years. Unions make people too much accustomed to getting everything they want. Time for a reality check. Williams gov is hard on the big oil companies to get what he wanted and the same goes for the workforce that make up this province. It's the governments duty to do what is right for our future and if that means save money for the long run then so be it. If we waste it all now because some greedy people hear we have millions in surplus, then don't make everyone pay for it. I don't want to be the one in 3-5 years time (or sooner) to be living on kraft dinner and bread every day to survive. Time for a reality check people, read the papers or watch the news, the world is in sharp decline and recession.

  • Show me
    July 01, 2010 - 19:44

    If they fail to publish the numbers and show the people where this is going and what has been done, what good is talking about it. Seems like a few people will back the Williams government to the end no matter what. I guess they have been able to retain employment and benefit from the money that will be spent on them. Screw the rest that will go without now and be without a job next year.

    Maybe Danny should raise taxes on business owners since they think this is such a good thing, and give it to the poor for a change. Na, just get out of the province so that the rich get richer is a better answer I see.

    When the wells run dry as the fishery did what and who will you have if not the poor slobs to bash down a little further?