NL Continues to Face Challenging Fiscal Situation: AG #nlpoli
Auditor General Terry Paddon said that the deficit for 2016-17 has been reduced to almost half the deficit of the previous fiscal year, but it is still not sustainable.
The province will likely have significant deficits until 2022.
In his Report, Paddon expressed concerns regarding the Province’s deficit for 2016-17 and shared observations about the fiscal challenges facing the Province in the future.
“While the deficit of $1.1 billion recorded in 2016-17 represents a significant improvement over the deficit recorded in 2015-16, it is the second highest deficit ever recorded in Newfoundland and Labrador,” said Paddon. “The deficit for 2016-17 contributed to a substantial increase in the net debt of the Province - now at $13.6 billion - the highest in the history of the Province.”
Newfoundland and Labrador has an older population - almost 20% of the population is older than age 64 – and this is a contributing factor to higher demand, and cost, for public services. The Province’s geography is also a contributing factor to a higher cost of delivering services. A sparse population, spread out over a large land mass, creates challenges to providing efficient, economical public services.
Also, the Province’s forecast of expenses shows an expected decline by 2022-23. Holding expenses to the forecast levels will be challenging given current demands and the impact of expected future demands resulting from such things as demographic change and any potential measures to offset higher electricity rates.