Labradorians gravely worried over budget impact
Labrador is already the most expensive place to live in the province and people there say the new provincial budget is going to make the situation even worse.
Vice-president of the Labrador North Chamber of Commerce, Geoff Goodyear, said he understands the need to get the provincial deficit under control, but that this budget might be too tough.
"There are some components to this budget where they might be trying to do a little bit too much a bit too quickly."
Goodyear said the budget is going to have some negative impacts on businesses.
"The dramatic increase in the gas tax, that's going to dramatically increase transportation costs in an area such as Labrador where transportation costs are already very, very high."
Food already expensive
Nunatsiavut President Sarah Leo says the budget hit people on Labrador's north coast harder than anyone else.
"You look at eliminating the air foodlift subsidy, the increase in ferry rates, the cost of medical travel, the elimination of the home heating rebate program: these are vital to quality of life and helping people in our region makes ends meet."
Leo said ending the air foodlift subsidy is especially hurtful.
"With the loss of the caribou, people have to rely more on what they buy. The air foodlift subsidy provides assistance for fresh produce to our region," she said.
"Milk was 100 percent subsidized. Even at 100 percent subsidized we are paying $6.99 for two litres of milk. You take any subsidy off you can see what it's going to do."
Goodyear echoes that sentiment. He said that when you take away food subsidies and transportation assistance packages, it makes a bad situation worse.
The province says that while it is eliminating the air foodlift subsidy, it will be replacing it with funds going directly to the Nunatsiavut Government, Innu Nation, and NunatuKavut Community Council.
The cancelled subsidy had been criticized in the past because the money went directly to retailers, raising questions about whether savings were being passed on to consumers.
The government says it will be releasing further information about how the new program will work.
Taxes questioned
Goodyear said another thing that jumped out at him from the budget was putting the HST on insurance premiums.
"For companies that do business outside the province, you have just made them far less competitive. Increasing [insurance costs] by 15 percent puts them at a disadvantage, and could create a situation where companies from outside Newfoundland and Labrador are more competitive than ones in our own province."
For example, said Goodyear, think of Air Labrador and Innu Mikun Airlines.
"Their operating costs have just jumped dramatically and that filters down to the consumer in an area where traveling is already very, very costly."
The government did this before with insurance premiums and it hurt businesses, said Goodyear, and they eventually dropped it.
"Now to see it come back again; I think we are taking a step backwards."
Sarah Leo says the increase in air travel costs won't just impact goods coming into Labrador.
"We have no choice but to get on a plane to seek medical assistance that the clinic here can't provide. Our costs are being doubled."
Leo said people who don't rely on subsidies and rebates may not realize how important they are.
"You look at the home heating rebate. There are so many families here who use that rebate to offset, to help, what they pay to heat their houses. Now, you are taking away a huge benefit to the family. It could mean an extra drum of oil."
"To the people of Nunatsiavut, these subsidies are things we rely on everyday. We are really struggling with what's in [the budget]."
Meanwhile, Goodyear said the budget comes at a time when there are already a lot of businesses in Labrador under significant stress.
"What this does is add another level of stress to organizations that are already struggling, and hopefully, they will all be able to survive"
Goodyear also worries about the "temporary deficit reduction levy" the government is imposing July 1.
Those making $25,000 will be subject to an extra charge of $300 per year, with the highest earners paying up to $900.
The province hopes to begin reducing that levy in 2018.
"History shows us that these things, once they get embedded, they are near impossible to get off the agenda. My concern is that these types of taxes go on and just increase the expense to individuals, which then has an effect on businesses," said Goodyear.
On the plus side, Goodyear said he is happy to see that there is still a significant amount of money in the budget for widening and paving the Trans-Labrador Highway.
"Every penny that is spent in Labrador is an investment, it is not an expense."
With files from Labrador Morning