Saying Islanders shouldn't have to shoulder the burden of tax hikes, Finance Minister Mitch Murphy announced $46 million worth of spending cuts. While it didn't include job cuts, the province will trim $20 million in program from government departments.

The Department of Development and Technology will take the largest hit, losing $8 million worth of development grants.

The Department of Health will lose $8.5 million; Education will lose $4 million and Community and Cultural Affairs will lose $3.7 million.

Deputy ministers will also complete a program review that could see another $9 million in savings by the end of this fiscal year, most coming from job cuts and retirement.

Murphy says the province will honour its contracts with public sector employees and respect the collective bargaining process when dealing with cuts. Union leaders have already met with Premier Pat Binns, he said.

"We've decided we want to work with public sector unions and work through this," said Murphy, who says there are no public sector wage freezes of layoff planned.

Contracts with doctors, teachers and several public sector workers are due to expire this year.