Budget 2013 details job cuts, reduces projected deficit by $1 billion

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The provincial government’s $7.5 billion budget today confirmed anticipated news of hundreds of layoffs in the public sector, but also revised the projected deficit for 2013-14 from $1.6 billion down to $563.8 million.

The budget also announced that four current English-language school boards will see financial and administrative services amalgamated into one district office located in St. John’s.

There is also an increase to a number of fees on such items as tobacco, admission to historic sites and ferry rates. A 10 per cent reduction for online motor vehicle registration will be eliminated.

Premier Kathy Dunderdale will also reduce her cabinet by one minister to 15, and eliminate 10 executive officials from the public service (Executive officials are deputy ministers, assistant deputy ministers, executive directors, and their equivalents).

The government also announced a 10-year sustainability plan for the province. The plan sets out specific goals to ensure continued sound fiscal management over the long term with elimination of decificits and a return to a surplus budget in three years.

“We have worked hard to reduce this deficit of $1.6 billion and make government more efficient. Unfortunately this year, it has meant tough choices,” Finance Minister Jerome Kennedy said in his budget speech.

“Given that more than half of program spending is salaries, we cannot do it without layoffs”


Job cuts

The budget notes provincial government employees will be affected through cutting of vacant positions, attrition, voluntary retirements and straight job cuts.

In all, 485 jobs are set to be cut from the core public service - not including, for school boards and health boards.

Another 450 positions are going from changes in the health, school boards and other non-core entities such as the College of the North Atlantic.

A total 196 people have indicated they will avail of early retirement packages. Some of those positions will be filled, some will not. Kennedy told reporters he hopes that at least half of those positions will be eliminated.

About 142 positions are slated to be removed from Education. Reductions have been made in areas such as administration, learning resources support and district-based numeracy supports. This will result in the equivalent of 142 fewer positions assigned for the 2013-14 school year, with a further reduction of 18 positions as a direct result of enrolment decline.

And 250 funded vacant positions have been identified and will be eliminated.

Some of the employees directly affected by the cuts are already aware, while others will be advised of their status “as soon as possible,” according to information provided to reporters with the budget documents.

About 73 per cent of the affected core public service employees are unionized.

With the changes comes bumping - where senior job cuts can send employees to take on less-senior positions. In addition to procedures outlined in collective agreements around bumping, “a bumping tribunal will be established in collaboration with NAPE to oversee the bumping process.”

Meanwhile, the government's hiring freeze will continue, “until further notice.” However, Kennedy said it will be lifted in time for student employment.


Projected deficit

The decrease in the projected deficit is a result of a combination of increased revenue and expenditure reduction, according to budget documents.

Projected revenue has improved by $695.8 million from earlier projections:

• Oil royalties are projected to increase by $265.5 million;

• HST revenues increased by $152.6 million as a result of a change in the methodology used by the federal government;

• Mining tax increased by $148.4 million;

• Revenue from personal income tax, corporate income tax and other revenue is projected to increase by $129.3 million.

The decrease in the projected deficit is also a result of reduction in net expenditure of $301.4 million. This includes $410 million resulting from the core mandate review, offset by increased expenses associated with new or expanded programs, and costs associated with workforce adjustments.

The combined result of revenue increases and reduction measures has resulted in a reduction of debt servicing costs by $62 million.


School board consolidation

Budget 2013 makes provision for two provincial school boards in Newfoundland and Labrador as of September 2013 — one English-language board and one French-language board.

Four current English-language school boards will be amalgamated into one district office in St. John's. There will still be a regional presence in offices in Gander, Corner Brook and Happy Valley-Goose Bay. Many staff now located in satellite offices under the current board structure (Labrador City, Lower Cove, Stephenville, Grand Falls-Windsor, Burin, Clarenville, and Spaniard's Bay) will be deployed directly into schools.


Increase in fees and tobacco tax

According to budget documents, increases to various fees, the implementation of new fees and an increase to tobacco tax will result in increased revenue of approximately $19.3 million in 2013-14. All fees are effective April 1.

• A 10 per cent online discount for vehicle registration renewals will be eliminated resulting in revenue of $2.6 million.

• Provincial historic sites will increase admission fees at all locations throughout the province, and discontinue the practice of offering free admission one day a week.

• The tax per cigarette will increase by 1.5 cents effective 12:01 a.m. March 27. This will result in increased revenues of approximately $8 million.

• Ferry rates will increase by 10 per cent for all users of the service, resulting in revenue of approximately $490,000.


Reduction in cabinet

A review of departments' core mandates has resulted in a leaner group of executive officials across the public service, the budget states. Ten senior executive positions will be eliminated, with the total going from 121 to 111.

The size of the cabinet will be reduced by one department though the restructuring of the Intergovernmental and Aboriginal Affairs Secretariat, to be effective within this calendar year. The Intergovernmental Affairs Branch will be led by an assistant deputy minister, who will report through the clerk of the Executive Council. The premier will take on additional responsibilities as Minister Responsible for Intergovernmental Affairs.

The Aboriginal Affairs Branch will be merged with the Labrador Affairs Office to become the Labrador and Aboriginal Affairs Office.


Sustainability plan

The sustainability plan announced in today’s budget is based on projections around oil price and exchange rates, which the budget documents note are volatile.

The commitment is to reduce the province's net debt per capita to the all-province average within 10 years. The plan also builds on a foundation of debt reduction demonstrated by a decrease in net debt by approximately 28 per cent since 2004 and the recognition by credit rating agencies of government's responsible fiscal management.

In his budget speech, Finance Minister Jerome Kennedy said the 10-year plan will include:

• Year 1, a deficit reduction process;

• Year 2, will involve reviews of Memorial University, College of the North Atlantic, Regional Health Authorities and Unfunded Pension Liabilities.

• Year 3, a return to surplus.

• In years four to 10, a continued focus on innovation, economic diversification and debt reduction.







Organizations: College of the North Atlantic.A, Labrador and Aboriginal Affairs Office, Intergovernmental and Aboriginal Affairs Secretariat Intergovernmental Affairs Branch Executive Council Aboriginal Affairs Branch

Geographic location: Newfoundland and Labrador, St. John's, Gander Corner Brook Happy Valley Goose Bay Burin Clarenville

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Recent comments

  • yo mama
    March 29, 2013 - 09:39

    I love seeing unions get it in the rear....lazy sacks.

  • Don Robertson
    March 27, 2013 - 23:42

    A budget deficit greater than one billion dollars. Newfoundland better get its act together or there will be a masasive default like those in Cyprus are experiencing. School Boards have been at the public trough far too long and I commend the Minister of Education for cleaning house -- lets get the resources back in the classroom!! Empower principals and local school councils to operate schools and have superintendents/school inspectors ensure proper accounting and curricullum objectives are being implemented.

  • Stan Squires
    March 27, 2013 - 13:44

    I am originally from NFLD and im living in Vancouver at the present time.The cuts in services and jobs in NFLD is an insult to the working class there.All progressive people and unions should fight against these reactionary measures. There were two former Premiers of NFLD who had contempt for the working class.They were Joseph Smallwood and Richard Squires.Its to bad the working class in NFLD at the time never succeded in meeting out swift justice to these two low-life crooks.The present gov. is the same and needs to be dealth with in a firm manner by the working class of NFLD.

  • bb
    March 27, 2013 - 01:55

    How is it possible that they are 1000 million over budget??? How does that happen in Nfld? Gross mismanagement of tax dollars.Thats how.I would riot.Drive them off the island.Absolutely criminal.

  • Joe worker
    Joe worker
    March 27, 2013 - 01:48

    How is it possible that they are over budget by 1000 million dollars in Nfld??? Think about that. Its unbelievable. How can Nfld prosper and attract work when the public service is eroded in this fashion? Drive them right off the island they are political criminals. Send a message to Harper this election. Paint it red.

  • George
    March 27, 2013 - 01:44

    Unfortunatley this isn't a "BLUE", "RED" or "ORANGE" issue. It is how our politicians operate. It doesn't matter what party holds the power, they will all run the province to suit their own needs first. It is no secret that MHA salaries along with other government appointed top officials within our province are "slap you in the face" overly excessive. How many of these top dogs will have to suffer? None. As a matter of fact the 2012 review of MHA salaries, allowances, severence etc. concluded by saying as of Dec. 2013 all MHA's are eligble for a raise. I bet they get that raise! Their is 0 accountability for our elected officials today. There never has been. If there was we wouldn't find ourselves in this mess every 3-5 years. How nice it would be to be able to run these guys out of office after they balance the budget in 2015 and be confident that the new gov. will lead us like they should. What a joke. In other parts of the world right now revolutions are taking place by citizens who have had enough of the corruption in their countries, maybe we should try it? If on election day in 2015 not one person voted, what happens?

  • EDfromRED
    March 26, 2013 - 21:51

    I for one think we should trust the PC's and their budget, that hurts the poor and middle class and protects and coddles corporations and the rich. I'm sure they'll spread the wealth: demands for escort services and paid bootlickers are going to skyrocket.

  • Judith
    March 26, 2013 - 20:26

    Will all the PC voters please stand up! We know you're out there because you voted this Tory government in to power. Please stop voting the way your fathers did. Start to use your own minds and realize that our land has changed and so must our politics. Disgraceful to see yet again the working men and women of this great province having to pay for the sins of the government. And they say services won't suffer ....... Impossible!!!! Let us not suffer in silence. Speak up good people.

  • ruffroad
    March 26, 2013 - 16:03

    lol , this government wouldnt be in office , if the people of newfoundland didn,t vote them in . So put up with it, you all knew what you were getting when you voted them in, so suck it up But there is one thing I would like for this government to do , is stop the double dipping , if you are getting a pension now and working for government , they should be the first one,s to receive a lay-off , not the people trying to work long enough to receive a pension

  • Lori
    March 26, 2013 - 15:33

    Has anyone considered the total inequity of having two school boards - one for English language students and one for French language students? Someone should do a comparison of the two streams: English and French. Look at the numbers - the number of schools, the student population, the number of teachers required, the support staff, etc. They don't compare - the number of English students in this province FAR outweighs the number of French students. Having just two school boards is absurd!

  • Jay
    March 26, 2013 - 15:17

    Reducing the budget deficit by a billion dollars on budget day is dishonesty more than incompetence. Since the last election, this government has proven to be dishones on a consistent basist, and dishonesty is far more unacceptable than incompetence. We must assume they will continue to be dishonest when it suits their needs. Do we really want thesepeople governing?

  • TJ
    March 26, 2013 - 15:02

    It's time for the people of Newfoundland to stand up for their future. We voted these fools in, time to vote them out! As long as we sit back and say nothing this will continue to happen. I say pay government officials 75,000 a year, make them pay their own mortgage, car payments and holidays...then we'll see the surplus!

  • wavy
    March 26, 2013 - 14:51

    Between the 1200+ people who lost their jobs because of an incompetent provincial government and the recent draconian changes to the EI system, compliments of a maniacal and vengeful federal government, Newfoundlanders and Labradorians have been royally screwed over and sold down the river by Conservatives. Then Conservatives have the audacity to suggest the Opposition parties would be inept and irresponsible at running the economy- I can't imagine anyone fumbling numbers worse that this incompetent bunch! We've been fooled, lied to and blind-sided in the cheapest, most despicable and underhanded manner imaginable. Worse still, we have to endure several more years of this treatment before we can take back our province but I'm sure by that time there will be all kinds of pre-election goodies and last-minute spending rolled out to entice voters. We need to be smarter than that; show them we are nobody's fool. I hope people remember this day- people NEED to remember this day and more importantly, the reasons behind it and how we ended up here. That is, if there's anyone still left in the province come 2015 (even a one-way, already ridiculously-expensive ferry ticket out of here just got even more ridiculously expensive; one last kick in the face compliments of the NL provincial govt.)

  • Corporate Psycho
    March 26, 2013 - 14:45

    One good thing for the Premier is the fact that most of these people will probably have to leave the province for employment and won't be here to vote in 2015.

  • Mike
    March 26, 2013 - 14:36

    I certainly hope Jerome Kennedy is still a memeber of the bar beacause he will a job to fall back on for when he doesn't get re-elected

  • Don
    March 26, 2013 - 14:36

    Glad to see the "overstaffed" government civil servant positions are being eliminated.

  • What about all the retirees government hired back...are they still there while others go home?
    March 26, 2013 - 14:34

    What about all the retirees the government has hired back in the public services, (this includes all public service employees on the government payroll, e.g. Nalcor) some who have been hired back under a contract? Are they still working for the public service? Have you made peoples jobs redundant and continue to keep these retirees on payroll?

  • NEWF
    March 26, 2013 - 14:33

    We need Danny back....he ran this province like a business and these yard apes are going to send us back to the stone ages.....these ppl couldn't shove a sharp stick up a dogs arse!

  • david
    March 26, 2013 - 14:28

    We're pretty fortunate to get to observe --- first-hand and in real time --- quite likely the most transparent deceipt and manipualtion of an electorate in any democracy ever. It's really quite fascinating.

  • dan
    March 26, 2013 - 14:20

    Don't fall for this BS people, surplus in time for an election what a joke! People of NL prove to this country we are not stupid, vote out all PCs and send a clear message to all of Canada, we will not put up with corrupt politicians

    • Mike
      March 26, 2013 - 14:47

      But Dan, who can we vote for? The liberals haven't had anyone decent in over a decade.

    • jen
      March 26, 2013 - 19:21

      I've had people argue with me that this is a good plan. I can't comprehend. I make it my mission to get young people to vote next time around.

  • Please Be Open
    March 26, 2013 - 14:07

    The budget states, "In all, 485 jobs are set to be cut from the core public service - not including, for school boards and health boards." Who is included? What about Newfoundland Liquor Corporation? What about Newfoundland & Labrador Housing? What about Nalcor? Are they included in these job cuts? Tell us who the "Core Public Service" include. Tell us who is exempt and why. BE OPEN.

  • maxine
    March 26, 2013 - 13:51

    The cuts of civil servants will teeter down into the core of every community in this province. More young-and not so young- will be leaving the province. The private sector businesses will hire at the lowest wages possible ,which will leave more people in poverty , because they will hire minions from foreign countries who are desperate to get here, and work for little compensation. Why can't the government make those mining companies and Kruger pay bloody taxes for all they are taking from our province . No, they bloody give those companies money to keep going and pillaging our land. Shame on you this Godlike like-in their minds- government. After all we are your servants ,Right???. Don't expect us to bow down and congratulate you. Enough said as I am getting more upset by the minute as I write this, and I really don't want to be arrested for saying something else. Newfoundlanders remember not to vote this "arrogant and obnoxious" people in again.

  • darren
    March 26, 2013 - 13:50

    Budget surplus for 2015.....who saw that coming?

  • Dan
    March 26, 2013 - 13:50

    I'm REALLY looking forward to being able to say "don't like the door hit you on your way out."

  • tom
    March 26, 2013 - 13:24

    Cant wait to vote and dump these clowns. How the hell do you find a billion in 60 days? You dont. If this was private sector they would all be fired and come election time you will be fired. Idiots.

    • Wanda
      March 27, 2013 - 19:31

      Only crooks, cons, mobs, and governments can make such statements and get away with it..... imagine...they found $1 million in a few weeks...out with all of them I say.