Ross Wiseman says tax, fee increases unavoidable

In yet another indication of thetough fiscalsituation faced byNewfoundland and Labrador, Finance Minister Ross Wiseman acknowledged Friday that tax increases are unavoidable as his department prepares a budget for 2015-16.

• Job losses coming in next budget, Ross Wiseman warns

In anOn Point with DavidCochrane interview, Wisemancontinued to emphasize that all options are being considered in order to cope with a dramatic and unexpected plunge in revenuestriggered by a serious slump in commodities, especially oil and gas.

Wiseman has previously stated that there will be job losses in the civil service and increased borrowing.

He is now more definitive about the prospect of tax and fee increases.

"It's impossible for us to deal with the issue at hand without pushing all three of those levers: borrowing, increased taxation and fees, and a reduction in expenditures. We have to spread it over those three,"Wisemansaid.

The province is preparing for five more years of deficits, to go along with a $900-million shortfall forecastedfor this fiscal year.

A more conservative approach

The province formulated this year's budget on an assumption that oil would average $105 US per barrel, but the price started to drop in mid-summerand brieflywent below $50 in January.

Analysts are now saying that it may take another five years before oil tops $80, forcing the government to take a much more conservative approach to budgeting.

Wiseman said it would be economically disastrous to try and balance the budget in the short-term.

The plan is to slowly bring expenditures and revenues back into balance over a five-year period with a combination of cost-cutting measures, including job reductions, increases taxes and fees, and borrowing.

It's impossible for us to deal with the issue at hand without pushing all three of those levers: borrowing, increased taxation and fees, and a reduction in expenditures. We have to spread it over those three.- RossWiseman

Wiseman would not offer any specifics in either area, except to say the decisions will be well-informed and sustainable over the long-term.

The government has once again engaged economist Wade Locke to carry out a review of the province's tax structure. He has previously suggested that the government increase the Harmonized Sales Tax.

Wiseman said, "We are looking at that," but added the government is also reviewing the personal income tax structure and the fees it charges for various services.

"Today, to start zeroing in on one particular type of taxation or one fee structure is kind of premature at this point. It's just enough to say, though, that we're looking at all our fee structures, we're looking at all forms of taxation, both corporate, personal and HST. We're looking at all of those avenues."

As for job reductions, Wiseman said the government is reviewing the number of retirements coming up in the next five years, and "how we might be able to make staffing adjustments through attrition."

He said the government must also be cautious about going to the lending markets because "what we borrow has to be serviced at some point."

So what about a salary roll-back for politicians, a reduction in the size of cabinet and the number of parliamentary secretaries?

"Everything we do is up for consideration and is part of the evaluation," he said.