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LETTER: N.L.'s Budget balancing act

Finance Minister Tom Osborne and Natural Resources Minister Siobhan Coady speak to reporters about the Newfoundland and Labrador’s carbon tax plan outside the House of Assembly in St. John’s Tuesday.
Finance Minister Tom Osborne and Natural Resources Minister Siobhan Coady speak to reporters outside the House of Assembly in St. John’s. - Joe Gibbons file photo

Finance Minister Tom Osborne has recently reminded the province, as he gave his fiscal update, that we are still on track for a balanced budget by 2022/23.

In September, during the byelection in Windsor Lake, Premier Dwight Ball informed us that neither the taxpayers nor the ratepayers would be paying for Muskrat Falls.

In order for Osborne to have concluded for some time now that a balanced budget was a possibility by 2022/23 (and that it is still a reality) he would have noted as he continued to recalibrate his calculations that no additional revenue would be provided by the taxpayer/ratepayer for Muskrat Falls. That loss of annual revenue (to help balance the budget) will be in the hundreds of millions of dollars.

Here' why:

1. NL Hydro has told the Public Utilities Board that “Hydro would be required to pay the actual costs billed to it in accordance with the Muskrat Falls Power Purchase Agreement & Transmission Funding Agreement.”

2. This from NL Hydro: “It is estimated that each one cent per kwh in rate mitigation provided to customers will require approximately $70 million per year in funding. Therefore, rate mitigation to limit residential customer rates to 18 cents per kwh will require funding in the range of $280 million to $350 million per year.”

3. From The Telegram editorial page in September: “But remember: we’re not talking about 18 cents any more. We're talking about 13 cents ... that means finding $700 million a year somewhere.”

A question for Osborne: Why did he not inform the public (long before the premier did in September) that his calculations for a balanced budget included the fact that neither the tax/rate payers would be paying for Muskrat Falls? He could have saved everyone a lot of needless worry.

To know that up to $700 million is covered off annually in projections for a balanced budget and that this was not only factored in the forecasting for some time now but also known by the finance minister long before Premier Ball made his announcement (in the middle of a byelection) is a little hard to believe.

It is more likely the case that Osborne only became aware in September (as the byelection goodie was being dangled) that no revenue was coming from the tax/rate payers.

So the question to ask now is: how are we still on track to balance the books?

Bern Kenny

Corner Brook

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