Province’s Fiscal Situation Remains Challenging #nlpoli

Auditor General, Julia Mullaley, delivered her report to the House of Assembly on the audit of the financial statements of the Province of Newfoundland and Labrador for the year ended March 31, 2019.

Financial indicators continue to show that the Province is not living within its means. While the deficit for 2018-19 of $0.55 billion is an improvement over the deficits reported in recent years, it is still a large deficit.

The Province has recently revised the forecasted surplus for 2019-20 downward to $1.56 billion. This surplus includes recognition of $2.5 billion in revenue from the renewed Atlantic Accord agreement for which the related cash flows will be received over the period 2019-20 to 2055-56. In absence of this agreement, the Province would have projected a deficit for 2019-20 of over $0.9 billion.

Consecutive deficits over the last seven years have contributed to a substantial increase in the net debt of the Province – now at $15.4 billion or $29,250 on a per capita basis – the highest in the history of the Province.

At March 31, 2019, the Province’s net debt as a percentage of its GDP is 46.3 percent, which is significantly higher than the average of all other provinces.

Net debt is expected to increase again to at least $15.0 billion by 2022-23.