Auditor General Releases Report on the Audit of the Consolidated Summary Financial
Statements of the Province for the Year Ended March 31, 2013

Terry Paddon, Auditor General of Newfoundland and Labrador, today presented his Report to the House of Assembly on the Audit of the Consolidated Summary Financial Statements of the Province of Newfoundland and Labrador for the Year Ended March 31, 2013 to the Speaker of the House of Assembly.

The Report highlights a number of areas concerning the financial condition of the Province:

• The Province recorded a deficit of $195 million for the year ended March 31, 2013 with a deficit of $451 million now forecast for 2013-14.
• The Province remains heavily reliant on the offshore oil sector for a substantial portion of provincial revenues.
• Provincial Net Debt increased by $511 million to $8.3 billion at March 31, 2013. The forecast deficit of $451 million for 2013-14 will push Net Debt even higher by March 31, 2014.
• Provincial obligations related to employee future benefits (Pensions and Group Health and Life Insurance) increased by over $400 million during the year. The combined liability was $5.6 billion at March 31, 2013.
• While expenses decreased by $137 million from the previous year, per capita expenses in Newfoundland and Labrador remain the highest of any province in Canada and are 40 per cent higher than the average of all other provinces for the year ended March 31, 2013.
• Changing demographics in Newfoundland and Labrador will have a significant impact on the nature of services required, how they are delivered and their associated cost.
• The Province has committed to provide $1.9 billion in equity financing for the Muskrat Falls project and has also committed to fund any contingent equity required to cover cost overruns on the project.

Government will have to continue to closely monitor the sustainability of program expenditures, the unfunded pension liability and the liability for group health and life insurance retirement benefits. In addition, close monitoring of the Muskrat Falls project will be required to ensure any contingent equity requirements resulting from cost overruns are minimized.

The Auditor General’s Report is available on the Office of the Auditor General website at www.ag.gov.nl.ca/ag/reports.htm

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Media contact:
Terry Paddon
Auditor General
709-729-2700

2014 01 17                           11:20 a.m.