Sweeter shade of red, like N.L. adjusts the deficit projection

The financial situation in Newfoundland and Labrador has improved since last spring, although the revised deficit remains at $ 547 million, Finance Minister Tom Osborne said Tuesday.

Eight months ago, the government was expecting a deficit of $ 683 million for this fiscal year.

Sending to reporters, Osborne said the government had "not yet made it" [but] it's clearly in sight. "

The ruling Liberals are one year ahead of the scheduled election. Nevertheless, Osborne spoke to the former Conservative government for being uncomfortable, particularly because of the Muskrat Falls hydroelectric development.

Osborne said the government's "biggest challenge" remains Muskrat Falls, and said that about 30% of the province's debt is now attributed to the hydroelectric megaproject.

Osborne presented details of the annual fall financial update to the Confederation Building, including updated data on the goals set by the Liberal government in its budget.

The government expects that it is about to regain a budget surplus in 2022-2023.

Role of the price of oil

The price of oil continues to be an influential factor in the government's cash flow.

When the budget was tabled at the end of March, the government expected Brent crude to trade at an average price of US $ 63 per barrel.

Since then, Brent – a North Sea crude that is a benchmark for the Newfoundland and Labrador industry because of its similarity to the oil produced here – is trading well above this level. bar, exceeding US $ 86 earlier this month.

In a Tuesday briefing, the finance ministry said every additional dollar paid on the price of oil resulted in provincial revenues of $ 19.9 million.

The government was also betting on the Canadian dollar at 79 cents US. Overall, the loonie traded slightly lower than that. The government is currently setting the dollar at 77 cents.

Finance officials pointed out that every time the dollar fell by one dollar, the provincial treasury had improved by $ 19.5 million.

Unemployment down

The province's unemployment rate has declined slightly, from 14.8% to 14.5% since the budget.

Osborne said that job growth has been strong in recent months.

He added that the government expects the unemployment rate to continue to decline in 2019.

At the same time, the participation rate for employment jumped 1.2% from the spring budget, rising from 57.8% to 59% of the population currently earning an income.

Status quo, says Hutchings

Opposition House Leader Keith Hutchings, however, was not impressed.

"There is no real improvement here," Hutchings said, noting that the tax update maintained the status quo and provided additional revenue.

Hutchings said he was worried about the increase in spending in recent years and that the government's goal of restoring surpluses could not be compromised by current practice.

"Moody's even says that it was unlikely that a government decides, in the fourth year, to do what it needs to do in terms of spending," said Hutchings, referring to the US rating agency.

"There is therefore no self-confidence that the goals will be achieved, call it what it is," he said.

Hutchings is critical of the heavy dependence of provincial liberals on oil revenues. Something, he said, has often criticized his party in the past.

"There is no economic diversification here, they talked about it, there is no evidence of that," he said.

"The [auditor general] mentioned a few years ago that the seven year plan they presented is not conceivable, you can not do it. So I do not know what it is all about today. "

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