Newfoundland and Labrador Budget 2023: The province that was promised

You don’t often see governments make good on long-term, transformational promises. Five years ago, Newfoundland and Labrador was on the rocks. The budget had a deficit of close to a billion dollars, with industry cash injections and government spending cuts underpinning a pragmatic strategy by the Liberals to overcome what they called the province’s “economic, social, and fiscal challenges.” Their promise? A stable economic future by 2023 and a government surplus for added measure.

With last year’s revised revenues generating a surplus of $784 million, there is no denying that the Liberals have kept their promise to Newfoundlanders and Labradorians. Heading into 2023, unemployment is at its lowest since 1976, population growth is at its highest since 1976, household income is up 8.2%, and debt to GDP is down from 44.2% to 37% as the province’s economic outlook remains strong in the short-term. Voters clearly agree that things are looking up for Canada’s easternmost province as they reward Premier Furey with the highest approval ratings among the country’s ten premiers.

But even as the good times roll, the Furey government is refusing to rest on its laurels. This year’s record $9.8 billion budget entitled “Your Health. Our Priority.” gives the impression of an election year budget two years ahead of time. Record investments in healthcare and highways, the fostering of a provincial Future Fund, and a slate of tax breaks and affordability measures to offset the bite of inflation speak to a government that has no plans of settling for good enough. As the Finance Minister, Siobhan Coady, proudly declared in her budget address, “Look towards the horizon, the sun is coming up” on Newfoundland and Labrador.

Getting down to the numbers, of the $3.9 billion allotted to healthcare (an 11% increase over 2022), $23 million is going to recruitment and retention, $21 million to new family care teams, $15 million to a unified health information system, and $9 million to the amalgamation of the province’s 60 ambulance services into one centralized dispatch service.

Better health outcomes aren’t confined to the system. A doubling of the Physical Activity Tax Credit, a $4,000 refundable tax credit for a family’s physical activity membership costs, will go a long way to improving personal and preventative health outcomes. This is the kind of holistic health thinking that may remind the public that Premier Furey is also an orthopedic surgeon.

Residents and businesses will be happy to hear that there are no personal or corporate tax increases in this budget, nor are previous tax incentives being eliminated. The fuel and diesel tax suspension of 8.05 cents per litre is here to stay while the Health and Post-Secondary Education tax threshold is rising to $2 million, providing tax relief to over 1,000 businesses. Combined with tax credits for green technology and manufacturing, and a stated commitment to promoting green hydrogen and wind energy, the Furey government is broadcasting to the world that the province is open to business and to competing in cutting edge industries.

Bolstered by promising unemployment and household income numbers, the federally backed Workforce Development Fund, established in 2018, will continue to increase employment in the province. More than $140 million will go towards helping secure jobs for underrepresented groups.

It’s not all clear skies in Newfoundland and Labrador, though, even after a successful five-year trajectory. The fog is still rolling in as some community, housing, and healthcare advocates express mixed feelings about Budget 2023. Even with $70 million earmarked for the development of 850 affordable rental units over the next three years, advocates are saying the social policy behind these initiatives are lacking. And while household income is outstripping inflation, not everyone is celebrating a pay bump; CUPE made their objections known, criticizing the budget for not doing enough to ensure competitive pay for certain public sector workers.

Over the last five years, the Liberals have certainly followed through on their promise to build up our future. And now that the future is here, what comes next? The Furey government is promising more growth, more opportunities, and more innovation, keeping its foot on the untaxed gas pedal to consolidate the province’s hard-fought comeback and multiply its future opportunities. But with fears of a global economic “hard landing” on the horizon, Minister Coady’s sunny morning forecast may be subject to a weather update before the day is up.