6 ways Dwight Ball will fight the deficit immediately

Newfoundland and Labrador Premier Dwight Ball shared an update on the province's fiscal situation on Tuesday that painted a grim picture for the fiscal future. 

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"The fiscal update shows us the status quo is not feasible and we must make changes," he said.

Premier Ball outlined six measures that government will undertake immediately to reduce the impact on the province's bottom line. 

Comprehensive review of Muskrat Falls

Prior to the fiscal update, the province announced it had hired auditing company EY--formerly known as Ernst and Young--to conduct a comprehensive independent review of the Muskrat Falls hydroelectric project to assess the costs, schedules and associated risks.  

On Monday, Ball said that review will "open the books" on the project and allow the province to take corrective action if required.

More than $5 billion has already been spent on the Muskrat Falls project. The comprehensive review is expected to cost between $750,000 and $1 million. 

Restricted hiring

During Tuesday's fiscal update, Ball said that the province will not adopt a strict hiring freeze, however, all departments and agencies, boards and commissions (ABCs) will be required to assess all ongoing recruitment and staffing actions.

He said that departments and ABCs will be directed to defer all new hires that will not impact critical operations.

"These are not layoffs," Ball said. 

Discretionary spending suspended

Ball said that departments and ABCs must refrain from discretionary spending, even if the money is available within their existing budget.

Reallocation of savings

He said that no savings from departments and ABCs can be reallocated for new funding initiatives not included in the previous budget.

He also warned using any savings near the end of the fiscal year would be of particular concern.

Exceptional circumstances could be reviewed by a treasury board, however.

Restricted use of consultants

Departments and ABCs will review existing consulting contracts to determine if there is an ability to defer or terminate the contracted work and instead use internal staff resources.

Ball said internal staff prepared all the information for Tuesday's fiscal update, whereas a contractor might have done the work in the past.

Non-essential travel discontinued 

All travel will be discontinued with the exception of non-discretionary work-related travel or travel related to federal or provincial and territorial meetings.

Ball said rather than travel, departments and ABCs are encouraged to utilize technology to engage with employees, colleagues and key stakeholders who may operate in another region.

Travel will be restricted to events and activities which relate to development in critical areas where skill or knowledge gaps exist or if required by employees to meet legal requirements, such as occupational health and safety training.

Just a start

Ball said that these immediate measures are just a start to re-establish a baseline and engage with the public service, and government and the public will have to work together to do much more. 

"Our next steps will include developing a strong, multi-year fiscal strategy, working with financial advisors and rating agencies, engaging with our key stakeholders and starting a tax review so we can simplify the system," he said.

Ball said multi-year funding targets will also be put in place, with line-by-line reviews of departments and ABCs.

Tuesday's announcement includes the previously announced attrition plan to downsize the civil service, providing about $300 million in savings over the next five years.

The premier said his government is standing by its campaign commitment of no layoffs and is instead looking for efficiencies and cost savings within the system.