Deficit more than $700 million: Marshall

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Tom Marshall, Minister of Finance and President of Treasury Board, provided the 2012-13 fall financial update for the province in St. John's today. — Photo by James McLeod/The Telegram

The provincial government is deep in the red this year, due to lower than forecast oil prices, and lost Atlantic Accord payments from the federal government.

Finance Minister Tom Marshall delivered his mid-year fiscal update this morning and revealed that the province's deficit this year is projected to be $725.8 million.

In April, the government said it would be running a $258 million deficit, but that was based on an oil forecast of $124 per barrel. Oil has consistently traded lower than that all year.

Marshall said the update is a "story of two economies." Essentially, he said, the province's economy is strong, but problems in the world economy are dragging down oil prices and causing issues.

Not only were oil prices lower, but mineral resource royalties were also down substantially.

Marshall said the government is slowly reducing spending, and they're trying to shrink the size of the civil service.

The government is also reviewing all programs and services to find places to cut.

"Future expenditures have to be in line with our forecasted revenues," Marshall said.

He specifically said that public servants who are now in the midst of collective bargaining should not expect big pay increases.

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Recent comments

  • gord
    December 14, 2012 - 19:55

    This administration is absolutely terrible at timing and public relations. It was this time last year when the Dunderdale announced tough times and for the unions not to expect anything similar to the last contract. Poor fiscal management by the province will be challenged this time.

  • manitoban
    December 13, 2012 - 16:50

    the newfoundland/labrador government must be taking lessons from the manitoba ndp government. each province are running a deficit. here in manitoba its over a billion and growing. these politicians wouldn't run a lemonade stand let alone a province. and now the taxpayer are asked once again to tighten their belts while the politicians will collect that fat wage which they don't deserve, free expence claims, travel the world, wine/dine on our dime, and how can we forget that pension they will collect for little or no work. ABSOLUTELY DISGUSTING !