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Wednesday 20 April 2011

NL Budget: A Rural Analysis, Part 1

The NL provincial budget has been announced and the coming days will be filled with various analysis by politician and commentator alike. Here at The Rural Lens will be no different, only for the angle of the analysis. This is Part 1 of that analysis.

If you are a regular visitor then you will already have read about some of the areas that I feel we should be investing in rural NL such as rural infrastructure, especially water more water, and wastewater, solid waste, the fishery and of course municipal restructuring. I’ll work through the budget to asses how or if it addresses these, and other issues of importance to rural NL.

To begin we have to realize that despite the difficult conditions in some rural areas, the NL economy has been booming. This is largely due to oil revenues and will lead to a forecasted surplus of $59million in the 2011-12 fiscal year. While this is good news, there is another figure that we cannot ignore and that is the $8.2 billion in projected provincial debt. That’s billion with a B. We are paying down the debt, but one of the criticisms of this newly drafted budget is that we could, and should be paying it down much faster, as interest rates are forecasted to rise in the coming years.

In part 1 of the analysis we will examine some more general aspects that may not be as directly related to rural issues but are important to note just the same. The approach is to touch on certain sectors as they stand out in the budget. To read the complete 2011 budget you can find the main budget page here, where you can get the speech, the highlights and the estimates by department.

Tourism & Culture
The budget identifies a variety of tourism and cultural investments totaling $6.5 million, ranging from Arts and Culture Centers, the Colonial building, NL Arts council and a cultural economic development program. The one stand out investment is in the CBC program The Republic of Doyle for $3 million over the next 2 years, for a total of $7.5 million invested in the program. This has some tongues wagging as it is a significant investment. While it is a significant amount, I would argue it is worth it, and not just because I’ve been an extra on the show a few times, but because it is promoting NL in a positive way throughout the world.

Fire Services
The budget commits almost $5 million to the purchase of fire fighting vehicles and equipment. This is a significant investment that is both needed and welcomed! There is also the introduction of a firefighter tax credit that will provide a small benefit to a vital group of volunteers in NL.

$348 will be invested in the crown corporation with the majority intended for the Muskrat Falls development project. This project is beginning to concern me as the numbers and justification don’t seem to add up, but that is a post for another time….

Investments into MUN and CNA for $37 million over 2-3 years for upgrades to various laboratories and facilities, and $6.4 million to maintain the tuition freeze at booth institutions. Good news for post secondary students but no new ideas included around grants or free tuition programs.

The budget includes an investment of $140 million toward the NL Poverty Reduction Strategy, which brings the total investment up to $620 million since 2006. Poverty reduction is a noble cause but $620 million is a lot of money, are we really making any progress? Can we see a difference?

The budget identifies $12 million to continue the Residential Energy Efficiency program to help people make their homes more energy efficient. This is a great program that should be considerably expanded.

There’s a note that $14 million is budgeted for waste management over the coming year. The current Gas Tax Agreement allocates about $10 million for waste management so I guess we’re putting in an extra $4 million? This process needs to be examined to see if the investment is really going to benefit the people of NL.

Energy Rebate
The budget includes a home heating energy rebate of 8% for all residents of NL. This amount is the equivalent of the provincial portion of the HST and will cost government $38 million and will take effect a few weeks prior to the election in the fall. This rebate is a mistake. As a taxpayer I don’t mind paying reasonable taxes as long as the money is going to valuable services and this rebate will make such a small cut in heating bills that the vast majority of people won’t even notice. It would be approximately equal to $75 per person for the year. I say take my $75 and invest it in healthcare so that the next time I need to go to the emergency room, I don’t have to wait for 4 hours. That’s easily worth $75.

So far the largest criticism would be that there are no new approaches identified here. It's all the same old stuff. Where are the cutting edge ideas and new approaches that might actually get some results?

Stay tuned for NL Budget: A Rural Analysis, Part 2 where things start to go astray...

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