Minister releases province' s financial statements for 2004-05;
statements show province' s financial situation gradually improving

The Minister of Finance and President of Treasury Board, Loyola Sullivan, today released the province' s 2004-05 audited Public Accounts for the fiscal year ended March 31, 2005. The financial statements outline the province' s financial position and operating results of all organizations controlled by government.

The 2004-05 Public Accounts show a deficit of $489 million compared to $914 million for 2003-04. The deficit for 2004-05 was originally budgeted at $840 million. The province' s net debt at March 31, 2005 was $11.9 billion, compared to $11.5 billion the year before. The net debt per capita for 2004-05 was $22,982, while the projected net debt per capita for 2005-06 is $23,280.

Minister Sullivan said the deficit for the 2004-05 fiscal year, as reported in the Public Accounts, is significantly lower than both the original budget, as well as the previous fiscal year. "The audited financial statements for 2004-05 confirm that government has made strides in improving the province' s financial situation and this trend has continued as was highlighted in our recent mid-year fiscal update. This improvement is due to a number of factors, including sound fiscal management, a new Atlantic Accord agreement and improved offshore oil revenues," said Minister Sullivan.

The minister explained that while great progress has been made in bringing the annual deficits under control, government must continue to focus its attention on the province' s serious situation. "We are on the right path, but there is still a long road ahead of us before achieving a sustainable and sound fiscal footing," added the minister. "As our Public Accounts show, we still have the highest net debt per capita in the country and a massive $11.9 billion provincial debt, which continues to rise."

Minister Sullivan said government is committed to setting priorities that will help ensure its responsibilities to the people of the province are being met. "Our financial vigilance will remain so that future generations do not inherit the burden of past fiscal mismanagement," the minister concluded.

The Public Accounts (consolidated summary financial statements) are prepared in accordance with the standards established for governments by the Canadian Institute of Chartered Accountants. The financial statements, as well as the financial statements of the Consolidated Revenue Fund, were independently audited by the Auditor General who confirmed the financial results reported for 31 March 2005. The Public Accounts for 2004-05 will be posted on the provincial government' s Web site at //www.gov.nl.ca/ComptrollerGeneral/publications.htm

Media contact: Sonia Glover, Communications, (709) 729-6830, 685-6612

2005 11 29                     2:45 p.m.