Business excited about fiscal statement

Everton McLean
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Finance

Local business leaders say the fiscal update by the provincial government Tuesday shows the Williams administration is sticking to sound economic principles as it moves towards less profitable years.

On Tuesday, Finance Minister Jerome Kennedy announced the province is projecting a $1.27-billion surplus for 2008-09, well above the $544-million forecast in the last budget.

Local business leaders say the fiscal update by the provincial government Tuesday shows the Williams administration is sticking to sound economic principles as it moves towards less profitable years.

On Tuesday, Finance Minister Jerome Kennedy announced the province is projecting a $1.27-billion surplus for 2008-09, well above the $544-million forecast in the last budget.

As well, Kennedy said the provincial government will continue to increase infrastructure spending, create employment, lower taxes, and reduce debt to lower interest costs as it braces for the looming global recession and possible lower oil prices, which could affect the province's bottom line.

St. John's Board of Trade President Donna Stone applauded the message from government.

"The board supports the province's restraint in the face of a significant surplus, and its view to ensuring the long-term health of our province's financial situation," she said in a release.

She said the government's initiatives will help "create the right conditions for investment and for small businesses, which are the heart of the economy, to prosper and grow."

She also said the board is encouraged that the province is looking to partner with the federal government on Atlantic Gateway, the creation of a green energy transmission corridor, and affordable housing.

Meanwhile, Bradley George of the Canadian Federation of Independent Business (CFIB) said the federation liked initiatives announced in the fiscal update.

"We were pretty pleased," George said. "There had been some concern about where the government will go with this and we are pleased to hear the government will hold the line with tax reduction."

He said CFIB members feel tax reductions will help stimulate the provincial economy during the global downturn.

Also, George said, the financial statement and the large surplus will likely boost consumer and business confidence in the province, a key to keeping the economy going strong even when oil prices are low and resources aren't paying royalties to the province.

Meanwhile, Municipalities New-foundland and Labrador president Graham Letto says the billion-dollar surplus is good news for municipalities struggling to provide clean drinking water and safe roads.

He said in a news release municipalities are expecting the province's surplus will be reflected in funding available for their services to residents.

"Clearly this government's fiscal plan is working," said Letto. "Now it is time to reinvest in the infrastructure that will encourage economic development and create jobs."

Letto said municipalities have billions of dollars in infrastructure work to do, and that work will create jobs in rural communities.

However, in order to invest infrastructure money properly, Letto called for the province to help develop regional and local development plans.

emclean@thetelegram.com

Organizations: Canadian Federation of Independent Business

Geographic location: Atlantic Gateway

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