APEC’s new member-only publication ATLΛNTIC Fiscal Monitor provides independent insights on Atlantic provincial budgets and the federal budget.
Newfoundland and Labrador’s budget, released May 31, forecasts a $825 million deficit for 2021/2022. Revenues grow, boosted by a rebound in offshore oil royalties. Taxes are increasing on high income earners. Spending will increase almost 7% to fund investments in the offshore, tourism and other economic development initiatives.
Net debt will grow by more than $900 million to $17 billion this year, about 47% of GDP. The debt will continue to climb due to operating deficits and elevated capital spending. APEC projects net debt will reach at least $19 billion by 2025/2026.
The government expects to return to balance in 2026/2027 by reducing spending by 10% from this year’s levels.