February 14, 2007
For immediate release
Third Quarter Update – Fiscal Year 2006/2007 - Province Achieves Second Surplus
Minister Murphy said, “The 2006 Budget projected a deficit of $12.5 million for the 2006-2007 fiscal year. I am pleased to report that the Province is now forecasting a surplus of $1.3 million this year. The improvement is attributed to good fiscal management, a fast-growing economy and job growth.”
“The projected surplus for 2006-2007 is in addition to the surplus that was reported in the audited Public Accounts for 2005-2006,” said Murphy.
Estimates of own-source revenues increased by $14.9 million and federal revenues increased by $7.3 million compared to budget figures.
The Province’s own-source revenue showed growth in Corporate Taxes of $11.2 million, Personal Income Taxes of $5.7 million and Sales Taxes of $4 million. Improved own-source revenues are a reflection of the Province’s strong economy that is highlighted by continued employment growth, increased personal incomes, retail spending and robust primary and non-residential construction sectors. Revenue increases were partially offset by decreases in Tobacco Tax of $2.3 million and Corporate Capital Taxes of $1.1 million.
As indicated in the Second Quarter Update, increased federal revenue is attributed to improved Equalization and federal trust funds that were established to support provincial post secondary education, housing and public transit programs.
Total expenditures are up $5.9 million, which amounts to one half of one per cent of total expenditures. These costs are primarily attributed to increased spending of $3 million in the Department of Health resulting from the recent announcement of changes in the long-term nursing care funding and out-of-province hospital care. Agriculture, Fisheries and Aquaculture show increased expenditures of $1 million, and economic development expenditures are up by $5.7 million, mostly offset by increases in corporate taxes.
“The Interest Charges on Debt are down $2.5 million causing our interest bite to fall just below 10% of total expenditures. This is a definite improvement which means that more dollars can now be spent on programs instead of debt-servicing costs,” said Murphy.
Minister Murphy said he is encouraged to see that the financial position has improved since the Second Quarter Update. At that time, he indicated the Province would continue to ratchet the budget deficit number down during the second half of the fiscal year.
“We, as a Government, are pleased to present back-to-back surpluses. With the strong leadership of our Premier and these positive results, I am confident that the fiscal discipline we have achieved will continue,” concluded Murphy.