Province not flush with cash, despite hot economy, Kennedy says

James McLeod
Send to a friend

Send this article to a friend.

Government facing $1.6-billion deficit in 2013 without budget cuts

Finance Minister Jerome Kennedy at the start of pre-budget consultations. — Photo by James McLeod/The Telegram

Finance Minister Jerome Kennedy opened pre-budget consultations this morning by telling people that a "red hot economy" does not mean the government is flush with cash.

He explained that the government gets very little money from income taxes, compared to other sources of revenue, and with the government off equalization, and the Atlantic Accord payments ending, there's less cash coming in.

If the government doesn't make cuts, it is facing a $1.6-billion deficit in 2013 and a similar shortfall in 2014.

Kennedy said he wants to hear from people at the consultations today, but the picture he painted at the start of the day made it clear that they don't have money to throw around.

"There will have to be decreases somewhere," he said.


For full story, see Saturday's Telegram.

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page



Recent comments

  • Willy Daniel
    February 15, 2013 - 21:16

    AB(D)C Anything but (Dunderdale) Conservatives

  • Foghorn Leghorn
    February 15, 2013 - 12:02

    @ Jay you are 100 percent correct there are many persons with accounting backgrounds who work within the Department of Finance. Whether or not any advice is ever suggested to the politicians, or if they ever listen that might be open for another debate.

  • phoney as a three dollar bill
    February 15, 2013 - 11:11

    they can't run a lemonade stand, let alone a province. get prepared future taxpayers for what awaits you.

  • Don II
    February 15, 2013 - 11:10

    There is undeniable evidence that excessive, wasteful, unproductive and unnecessary Government spending has been happening for years in Newfoundland and Labrador. It appears that in some cases the Dunderdale Government may have been misled and taken advantage of. If Premier Dunderdale and Minister Kennedy are truly serious about reducing and controlling Government spending in the future they should cut the wasteful spending of tax payer dollars in the Province by starting with the Town of Cupids. It appears that the Town of Cupids obtained a $1.5 Million Government Grant which was approved for municipal improvements but instead used a substantial amount of the Grant to build an unapproved commercial marina on Crown land which the Town of Cupids did not own in an area not zoned for commercial marina operation! Residents of Cupids complained about the questionable activities of the Town of Cupids to the Dunderdale Government and were informed by a Cabinet Minister that they could take legal action against the Town themselves. A resident of Cupids filed a complaint with the Provincial Ombudsman. It appears that investigation revealed that the Town of Cupids had built a commercial marina without Government approval and had constructed the marina on Crown land that the Town did not own. The Dunderdale Government was forced to order the Town of Cupids to cease operation of the unapproved commercial marina and to vacate the Crown land it did not have legal title to! The Mayor and a Councilor of the Town of Cupids recently resigned. It appears that the new Mayor of the Town of Cupids admitted last week that the Town has to defer payment of loan and bill payments. Despite the dire financial circumstances, the Town of Cupids continues spending a substantial amount of tax payer dollars in pursuit of the commercial marina plan. The Town of Cupids recently hired a land planning consultant to prepare a report to the Dunderdale Government seeking approval to change the Town Development Plan and zoning of the area to permit the operation of a commercial marina which the Town of Cupids has already built without Government approval! It appears that the Dunderdale Government is spending substantial amounts of tax payer dollars to acquire, operate and promote the Cupids Cove Plantation Provincial Historic Site in Cupids to commemorate the Cupids Cove Plantation. The Cupids Cove Plantation is a fictional place that never existed and which is never mentioned in the entire historical record of Newfoundland and Labrador! It appears that the Dunderdale Government has ignored the fact that historical documents, letters, maps and Crown Land Grants exist which show that John Guy landed at Cupers Cove near Salmon Cove (now Avondale) in 1610! It is this kind of lack of due diligence, poor administration and wasteful ribbon cutting project spending which has contributed to the dire financial situation which the Province is now facing. The Dunderdale Government appears oblivious and unconcerned about the fact that the Town of Cupids is spending tax payer money to acquire Crown land and expropriate privately owned waterfront lands in an attempt to operate an unapproved commercial marina which will require more spending of tax payer dollars to construct, insure, maintain and operate. It also appears that a feasibility study and an environmental impact study on the commercial marina project in Cupids were never done. The Town of Cupids is also actively pursuing the Dunderdale Government for approval of substantial tax payer funding to construct a new Town Hall. It appears that there is an established attitude that the Dunderale Government is flush with oil money and as for spending on useless and wasteful projects, the sky is the limit!

    • Eli
      February 15, 2013 - 13:14

      Dan II, all municipalities should be audited. Skulduggery abounds but when you look back over the line of incapable cabinet ministers it just won't happen.

  • a crook is a crook, no matter what colour they wear
    February 15, 2013 - 11:05

    not enough cash to help the poor, but their seems to always be enough cash to pay their(politicians ) fat wage, their wine/dining expence, travel, and how can we forget that pension. what a joke these clowns have become.

  • Dale Olfstadt
    February 15, 2013 - 10:29

    Jerome sir, you have about as much credibility as Tom Marshall had; zilch.

  • dan
    February 15, 2013 - 10:20

    Here here Brian! Time to rid the place of all of those VERY HIGH paid appointees! Imagine every dept having a Parliamentary Secretary make as much as the Minister, not to mention the bulging DMs and ADMs ranks! Have a look at the appointment since last spring alone! There is no money yet the highest paid jobs are filled almost daily. Rid this province of the PCs ABC in NL

  • gerry
    February 15, 2013 - 10:15

    something's wrong if the province ifinot in he black. It's atrcious with all the money in oil revenue...& it's naive, arrogance or just plain stupidity to say 'very little money comes from income tax'. I suppose if your'e a po-lie-tician making at least a 6 figure salary, perks & a waiting titamium pension, one can make such statements. But the middlle class, who pays 50% or more in federal, provinicial, municipal tax, HST, service fees, etc, etc, views such verbal diarrhea as absrub to say the least. Perhaps what we need to do is stop electing these lawyers, doctors, politician science, basket weaving, whatever degree holding wanna-bes and self-serving individuals. But after every type of election all I hear is the song, 'March In The Clowns....'

  • Fool me once
    February 15, 2013 - 09:48

    Has everyone forgotten this government's track record with revenue forecasts. They've been way off on almost everyone of them. Why then are we suppose to start believing them now? The one thing we can be sure of is that it will be no where near what Kennedy is saying today.

  • rose
    February 15, 2013 - 09:28

    Have province....what a joke....more like some have province. These people should try to live on $10.00 an hour. And have EI take 1/2 of it and work for $5.00.

  • darren
    February 15, 2013 - 09:15

    I guarantee you Kennedy's tune will change late 2014, just in time to prepare for the next election. Why do we have lawyers like Marshall and Kennedy running Finance anyway? Shouldn't someone with a CA or business background be doing this stuff?

    • Colleen
      February 15, 2013 - 09:52

      I totally agree. The Government should be run like any other business. Maybe they should hand their accounting over to a local CA firm. The wouldn't be in the red, if they based their income on $65.00 a barrell, they'd probably have broken even. As the saying goes "Don't count your chickens...."

    • Jay
      February 15, 2013 - 11:29

      Please don't pin your hopes on chartered accountants. There are lots of them already telling these jokers what to spin out. Just listen to some of the senseless bull coming from Marshall and Kennedy, which they think we can't see through. These are all distortions of fact being fed to them by CAs. Do not believe a word they say. By the way, we just saw a CA from the Auditor General's office in action. He took $150,000.00 to "write" a report which will never be read, and he was in charge of holding politicians accoountable. What a joke!!!

    • Eli
      February 15, 2013 - 13:18

      They love him in Carbonear. Unbelieveable! But that's Carbonear.

  • Jack
    February 15, 2013 - 09:14

    Due to oil wealth mismanagement, Newfoundland and Labrador has become Canada's version of Equitorial Guinea and Azerbaijan were people are not getting the benefits of the oil boom, and the only ones getting rewarded from this oil boom are politicians and government owned companies. While Kathy Dunderdale is far from being a Teodoro Obiang or Ilham Aliyev, Newfoundlanders and Labradorians should be concerned.

    • david
      February 15, 2013 - 09:43

      The politicians in Equatorial Guinea do quite well, with a similarly informed elecotorate...card-carrying, placard-waving zombies. "If you can amrk an X, you're my kind of people"!

    • Jack
      February 15, 2013 - 11:17

      David, the Obiang Family and Equitorial Guinea's top officials and politicians are doing well, but people are still be tortured, government corruption is rampant, and their people still live in destitute conditions.

    • david
      February 16, 2013 - 12:44

      Yes Jack. So you're saying we should be grateful for what we get then...? That our own brand of permanent destituiton and oppression, one instilled completely, perfectly voluntarily over decades, is "better" because it is non-violent? That is as close to a "point" of any kind that I can figure....

  • Jack
    February 15, 2013 - 09:10

    With Jerome Kennedy saying one thing, and Tom Marshall saying another, I don't trust both of them or other Torie cronies anymore. The reason is that in last year's provincial budget televised live on television, Tom Marshall said this province will have a budget surplus in 2014, and now Jerome Kennedy says we will have a record deficit, meaning both of them are liars as far as I'm concerned. Another reason Kennedy is lying is that based on the large deficit, this province will likely be relegated to a "have not" province, meaning we will be eligible for equalization payments, thus reducing the expected deficit. As for Jerome Kennedy, maybe if Newfoundland and Labrador Government lobbied hard to make the Atlantic Accord permanent, stopped using taxpayer money to subsidize Muskrat Falls, didn't screw up the Hebron project, and properly manage major projects like the Corner Brook Regional Hospital, this province will not be in a financial mess in the first place. On the CBC Newfoundland and Labrador website this morning, Jerome Kennedy openly admitted that the Dunderdale Government will lose votes in the 2015 provincial elections. Long live the Liberals and NDP, and no more right wingers like the Tories running this province.

  • brian
    February 15, 2013 - 09:04

    They should eliminate all Parlimentary Assistants pay from all MHA's collecting this extra pay , all Ministers have Deputy Ministers, Assistant Deputy Ministers, how much red tape do we need to run a department?? CUT THIS TITLE & PAY immediately!!!!!!!!

  • Doug Rowe
    February 15, 2013 - 09:02

    I'm thinking that N.A.P.E. will feel like grabbing a certain Finance Minister by the 'S.C.R.U.F.F. of the neck!!!!

  • Cold Future
    February 15, 2013 - 09:00

    And now folks you know why we had to rush through the Muskrat sanction. The cash sent over to Nalcor came from the tooth fairy. You know it has nothing to do with this mess. Nor does Hebron. This is the fault of Joey Smallwood, Clyde Wells and Brian Tobin. And there's only Dwight Ball and Lorraine Michael left to take the blame.

  • Happily Retired
    February 15, 2013 - 08:55

    Start with cutting the number of MHAs to 36, then decrease the number of departments, then the number of cabinet ministers. All the MHAs are doing is building their own little empires. It has to stop.

  • Scott Free
    February 15, 2013 - 08:40

    NO, NO,'ve got it all wrong! You're just not understanding the problem; the cuts across the board are necessary to allow for more political patronage appointments to Tory friends and supporters; they're not finished yet.

  • Edward Sawdon
    February 15, 2013 - 08:14

    Yes I warned people that the Dunderdale P.C. Government would finance the multibillion dollar Muskrat Falls project (with its expected cost overuns) on the backs of Persons with Disabilities, Hospital Patients, the Working Poor, students, low and fixed income Seniors, Public sector workers and other groups! Today, COD-NL is experiencing Provincial Funding Cuts so we must ask ourselves, "Who's Next?" We live in a Have Province with lots of Havenot people! How can the Dunderdale Government have a Poverty Reduction Strategy when Provincial Public Sector cutbacks (excluding Nalcor) will mean more Poverty? How in the world is the Dunderdale Government going to attract immigrants and prevent Newfoundlanders & Labradoreans from leaving when Premier Dunderdale, Jerome Kennedy, and others are planning widescale cutbacks in our educational, healthcare and social programs? Speaking about Healthcare, what ever happened to a new Corner Brook Hospital and a new Waterford Hospital ? Whats the point of having a provincial Disability Policy Office when you cut funding to a cross Disability Organization such as the Coalition of Persons with Disabilities - NL. Premier Dunderdale, Jerome Kennedy and their P.C. colleagues have to ask themselves where is their sense of Social Justice and Equality? Edward Sawdon St. John's, NL

    • Bob
      February 15, 2013 - 09:32

      Dear Edward, Last I checked the middle class were by far the majority tax payers in this province over and above all the groups on your little list and you didn't even give them a mention.

    • Edward Sawdon
      February 15, 2013 - 15:46

      Yes Bob I should have mentioned the middle class as I, like you are members of the Middle Class. But please bear in mind that a good number of us Middle Class people fall into other groups as well - Persons with Disabilities, most Public Sector Workers, students of kindergarten right up to Grade 12 and even College and Universities from middle class families, and those of us who face high housing costs especially in St. John's area and Labrador City. The Dunderdale, Kennedy, Marshall P.C. Government cutbacks are going to affect most of us Newfoundlanders and Labradoreans. The people who are not affected will be those whose self-vested interests lie with Nalcor and Muscrat Falls and the wealthy Conservative elite.

  • Eli
    February 15, 2013 - 08:12

    So with less money coming in why the hell did he and Dunderdale commit us to a $7-billion dollar debt for the next 35 years? The guy is just plain nuts and these so called pre budget consultations are just a tactic to stall negotiations with NAPE.