Full-day kindergarten, student loans highlight budget

Glen Whiffen
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Venture capital, social programs also get attention while net debt grows

The elimination of provincial student loans and the introduction of full-day kindergarten make education the big winner in today’s provincial budget.


There are other goodies, as well, including $10 million going into venture capital funds to aid start-up businesses and expand opportunities for early stage businesses with high potential for growth, and money to continue the journeyperson mentorship program, support apprenticeship hiring and to aid displaced fish plant workers.

A second methadone maintenance treatment team will be added in the province this year at a cost of $383,700.

There will be an increase to income support and the seniors’ benefit.

And a usual target, tobacco, is not forgotten. The tax per cigarette will increase by three cents and the tax per gram on fine-cut tobacco will increase by six cents.

The downside is the provincial debt continues to grow, with net debt projected to increase by $807.6 million this year to $9.8 billion.

Finance Minister Charlene Johnson said a key component of the province’s debt relates to unfunded pension and other post-retirement liabilities. As of March 31, 2013, they accounted for 67 per cent of net debt, currently about 74 per cent, and percentage is expected to reach 85 per cent by 2016-17 if no action is taken.

Johnson delivered the about $8.2 billion budget, her first since taking on the finance portfolio, this afternoon in the province’s House of Assembly.

Johnson announced that, as a result of lower spending than budgeted, the deficit for 2013-14 — projected at mid-year to be $450.6 million — is now revised to $348.7 million.

The projected deficit for 2014-15 is $537.9 million.

The minister said the province is expected to return to a surplus in 2015-16.

In an attempt to reduce student debt, the provincial government will eliminate student loans to be replaced with non-repayable up-front grants through funding of $14.7 million for two years, with a projected investment of approximately $50.6 million over five years.

About 7,000 students annually are expected to receive up-front grant assistance. As of Aug. 1, the provincial student loan will be decreased by $20 per week of study, and the grant portion will be increased by $20.

Students would be eligible to receive a maximum of $40 per week of study in the form of a loan and $100 per week of study in a grant.

Effective Aug. 1, 2015, provincial student loans will be completely replaced with non-repayable grants.

In addition, $5.1 million will be available to continue the tuition freeze for students attending Memorial University and College of the North Atlantic.

Johnson said full-day kindergarten, that has been on the government’s radar for years, will come into effect September 2016.

“We will begin the process to implement a universal full-day Kindergarten program to enhance the early emotional, social and academic development of all children,” she said.

“To make this happen, we will embark on an intensive program to renovate and redevelop existing school infrastructure, were necessary. Additional resources, including teaching resources, will be put in place.”

That will include adding modular classrooms to some schools, renovations or extensions to schools, and to hire possible 140 new teachers.

Johnson told reporters social issues were raised many times in pre-budget consultations in the province.

She said $4.8 million will be spent to raise the basic rate for people receiving income support by five per cent beginning July 1 — with up to $32.3 million being spent over the following five years.

The seniors benefit will also see an increase in October from $971 to $1,036.

The Department of Child, Youth and Family Services will hire 20 new people including social work supervisors and social workers.

Premier Tom Marshall called today’s budget a fair social and economic plan for all residents of the province.

“It demonstrates a commitment to ensuring fairness, so that residents share fully and equally in the prosperity from our province’s unprecedented economic growth,” Marshall said.


Organizations: Memorial University and College of the North Atlantic, Department of Child, Youth and Family Services

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Recent comments

  • justagraduate
    April 01, 2014 - 15:21

    But what about those in this generation who have already completed studies within Newfoundland, and can't find work in their field of study and are unable to even start paying back their student loans? Why not help them too? I for one have a student loan and graduated last year, I'm still working a minimum wage job, and trust me it's not because I haven't tried beyond wits end to get a job in my field of study. I even check the job postings everyday. I'm in repayment assistance and unable to even make payments on my loan. At this rate, I don't know when I will be able to, it's discouraging as a young adult to feel that pressure. Maybe I should have taken a year off when I graduated high school to reap the benefits of paying half of what I now owe to the government.

  • Regular Joe
    March 28, 2014 - 14:57

    Here we go, lets just give everyone a free ride. Spend thousands of taxpayers $'s on some university degree that gives no benefit in the real world. If graduating students are so concerned with repaying debt pick a profession with a higher rate of return on the investment. What is wrong with learning to pay your own way in life and not expecting someone else to pick up the tab for your bad decisions. I am sick of paying half my wages out in taxes to make life easier for those without the drive to pull their own weight.

  • A. Fox
    March 27, 2014 - 19:38

    Up-front non-repayable grant assistance for a BA ?...come on. What a waste of taxpayers' money. Gee, I didn't know NL was so rich! I am not against higher education but what are we doing here ? Talk about entitlement!I can see giving incentives to students completing degrees or trades in areas where there is a demand for more Newfoundland graduates. The government's plan will become an expensive gravy train with many tax payers financing their own children's education as well as others. Studying hard for scholarships and borrowing money to attend university used to develop a student's responsibility and accountability. High achievers can now put the books away! You may as well take the free ride like the rest of them. Those grants can buy an awful lot of beer!

    • Eddy
      March 28, 2014 - 13:51

      There is widespread debt in the upcoming generation because of ridiculous tuition fees, forcing young adults to borrow $30,000 with little chance of landing a decent job after graduating. You're deluded if you think every students can just apply for grants and earn scholarships.

  • Silas Pritchard
    March 27, 2014 - 18:43

    I'm moving from BC to go to memorial. Does this mean I get tuiton freezes too? I assume this is just for residents.

    • Graeme
      March 28, 2014 - 14:38

      No, the tuition freeze is for all domestic students, so any Canadian (and permanent resident??) can avail of the freeze.

  • Need
    March 27, 2014 - 16:48

    Govt needs to explain the pension liability. I think they are trying to scare the public. Is the number what they owe as of today or over the next 20 years. What is included? How is it calculated?

  • Joe
    March 27, 2014 - 15:41

    We are running a deficit. Get those business taxes back up to 25%!!!

  • Marlene
    March 27, 2014 - 15:31

    Notice how all the big promises are scheduled to take effect when the PCs are not the government anymore? And if by some miracle they did manage to hang on to power, do you really think they would honour their promises? How phoney can you get - this budget is worthless.

  • Guy Incognito
    March 27, 2014 - 14:16

    As predicted, here comes the pre-election spending to make the public forget about how bad our government has been. The Tories are toast. Nothing they can do to change that now.....

  • Not So Bad!
    March 27, 2014 - 14:16

    What a great budget for the government and the public! There is something there for everyone (students, low-incomers, seniors, business owners...). The people who got it the worst were public servants, who were basically told, "Look, we can largely avoid the cuts proposed a year ago by Dunderdale, but in order to cover pensions liabilities, we need to either cut your benefits or you are going to have to pay higher into your own retirment pension plan." Now, if that's the worst, that's not so bad.

  • Jack
    March 27, 2014 - 13:59

    The major concern with the 2014-2015 budget is the considerable gap between the projected deficit and net debt, which not only doesn't add up, but also violates the laws of Generally Accepted Accounting Principles (GAAP). For example, while the projected budget deficit is $537.9 billion, the net debt will be $2 billion higher from the low of a few years back, a gap of over $1.461 billion. In real life, if a Chartered Professional Accountant had a big deficit or loss gap on their financial statements, he/she would be jailed by now, but not Premier Marshall or Charlene Johnson, and that's not right. The other problem with the budget is no money being allocated to completely pave Phase II and III of the Trans Labrador Highway, especially the Red Bay to Cartwright Junction and Cartwright Junction to Happy Valley - Goose Bay section. Third problem with the budget is lack of commitment to change the Municipalities Act to outlaw towns from charging the Poll Tax which discriminates against seniors, disabled persons, low income earners and students, and for a province that will host the 2016 Special Olympics Canada Winter Games in less than two years from now, this is grossly unacceptable. Two thumbs down for this budget, Charlene Johnson.