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April 08, 2022NEWFOUNDLAND AND LABRADOR BUDGET 2022-23 The Province of Newfoundland and Labrador has tabled its 2022-23 Budget. Newfoundland and Labrador anticipates a deficit of $351 million in the 2022-23 fiscal year, following a $400 million deficit now estimated for the 2021-22 fiscal year. Newfoundland and Labrador's deficits are projected to decline in the following four fiscal years, returning to surplus ($82 million) in 2026-27.
The Newfoundland and Labrador Budget reports separately expenditures whose funding is delivered through cost-shared programs. However, these still contribute to provincial expenditures.
As in many other provinces, Newfoundland and Labrador's 2021-22 revenues were considerably higher ($145 million) than anticipated in the 2021-22 Budget. Expenditures were $281 million below amounts projected in the 2021-22 Budget. Rather than declining as expected in the 2021-22 fiscal plan, the Newfoundland and Labrador Budget expects revenues (+$407 million) and expenditures (+$358 million) to rise in 2022-23. Revenues are then projected to stabilize over subsequent fiscal years while expenditures fall to bring the budget back to surplus.
Newfoundland and Labrador's deficit peaked at $1.492 billion in 2020-21. Deficits for 2021-22 and 2022-23 are considerably narrower than expected in last year's fiscal plan. However, projected deficits beyond this fiscal year are largely the same as previously planned.
Measured as a share of GDP, the footprint of provincial government amounts to 23.5% of the provincial economy for 2021-22. This is projected to rise to 23.6% in 2022-23 and 24.0% in 2023-24. By 2026-27, the footprint of provincial government in the Newfoundland and Labrador economy is projected to then contract to 22.3% of GDP.
Newfoundland and Labrador's deficit amounts to 1.0% of GDP in 2021-22 and 0.9% of GDP in 2022-23. In subsequent fiscal years, the deficit shrinks as a share of GDP.
Newfoundland and Labrador's net debt is projected to rise from $16.513 billion (42.9% of projected 2021 nominal GDP) to $17.054 billion (42.7% of projected 2022 nominal GDP).
Newfoundland and Labrador's provincial government revenues amount to $17,354 per capita in 2022-23 while the deficit is $672 per capita. Total expenditures amount to $18,026 per capita (included funded expenditures).
Newfoundland and Labrador's real GDP is forecast to increase by 0.5% in 2022, on higher capital spending, rising exports as well as gains in mining and tourism, offset by falling oil production. The Newfoundland and Labrador economy continues to recover from the pandemic-related shock albeit at a slower pace than currently estimated for 2021. With a population rise of 0.4% expected this year, Newfoundland and Labrador's employment is projected to rise by 2.6% in 2022, driving household income up by 3.2% and retail sales up by 3.5% (with a lift from inflation expected for the first half of 2022).
Key Measures and Initiatives
The Newfoundland and Labrador Budget for 2022-23 focuses on three priorities: cost of living, supporting industry/business and supporting health/education.
Cost of Living
- Elimination of the retail sales tax on home insurance for one year
- 50% off the cost of registering passenger vehicles, light trucks and taxis for one year.
- No provincial tax or fee increases.
- Estimated $7 million for the Physical Activity Tax Credit, which provides families with a refundable tax credit of up to $2,000.
- Boosting the Pre-natal Infant Nutrition Supplement, formerly the Mother Baby Nutrition Supplement, to $150 per month for low income pregnant people and families with children under age one (up from $100 per month) along with a one-time payment of $150 during the month of the baby’s birth
- A 10% increase in the Income Supplement to $73 million
- A 10% increase for the Seniors' Benefit to $61 million (up to $1,444 annually)
- An additional $1.9 million for electric vehicle charging infrastructure
- $2,500 rebate for purchase or lease all-electric vehicles; $1,500 rebate for purchase or lease of plug-in hybrid vehicles
- $2 million more to help transition homes from oil heat to electricity (up to $5,000)
- Transit passes for low income seniors and youth-in-care in St. John’s, Mount Pearl and Paradise
Supporting Industry and Business
- Green technology tax credit of 20% for capital costs of green activities (equipment for energy conservation, clean energy generation, efficient use of fossil fuels)
- New 10% Manufacturing and Processing Investment Tax Credit will support the manufacturing, fishery, farming, and forestry sectors to invest in capital equipment
- New All Spend Film and Video Production Tax Credit worth 30% of total qualified production costs (maximum credit of $10 million annually per project)
- New $2.6 million film and production program at College of the North Atlantic
- $20 million in new funding for tourism, hospitality, arts and cultural industries
Supporting Health and Education
- $14 million to improve access to primary health care.
- $3 million to increase the number of seats in Memorial University’s Nursing Program by 25%
- $2.5 million to increase the number of seats in the personal care attendant, practical nursing, paramedicine and other health programs at the College of the North Atlantic
- $1.8 million to continue Health Hubs in Grand Falls-Windsor and Gander
- $3 million for a virtual emergency room in the central region
- $3.3 million more for the air ambulance program.
- $10 million investment supporting 39 positions in cancer care at the new regional hospital in Corner Brook
- $2.5 million for a new Alcohol Action Plan
- $2.5 million for a new Life Promotion Suicide Prevention Action Plan
- $3.1 million in additional funding for teaching services to meet the rising student population
- $4 million to maintain guidance counsellor and administrator positions added during the pandemic.
Newfoundland and Labrador Budget 2022-23
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