Full-day kindergarten, student loans highlight budget

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

Published on March 27, 2014

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.