Government facing $1.6-billion deficit in 2013 without budget cuts
© James McLeod/The Telegram
Finance Minister Jerome Kennedy at the start of pre-budget consultations.
Finance Minister Jerome Kennedy opened pre-budget consultations this morning by telling people that a "red hot economy" does not mean the government is flush with cash.
He explained that the government gets very little money from income taxes, compared to other sources of revenue, and with the government off equalization, and the Atlantic Accord payments ending, there's less cash coming in.
If the government doesn't make cuts, it is facing a $1.6-billion deficit in 2013 and a similar shortfall in 2014.
Kennedy said he wants to hear from people at the consultations today, but the picture he painted at the start of the day made it clear that they don't have money to throw around.
"There will have to be decreases somewhere," he said.