Office of the Auditor General
November 5, 2014

Auditor General raises concerns about the sustainability of Provincial deficit

In his commentary on the consolidated summary financial statements of the Province of Newfoundland and Labrador, delivered to the Speaker of the House of Assembly today in St. John’s, Auditor General Terry Paddon highlights that the Provincial deficit of $389 million for the year ended March 31, 2014 has doubled from the prior year. This means that expenses have grown beyond the amount of revenue available to pay for those expenses.

“The Province has reported significant deficits in the last two years,” said Mr. Paddon. “An additional deficit is projected for 2014-15 which, combined with weakening global oil prices, may impact the Province’s ability to return to surplus by 2015-16.”

Mr. Paddon also notes that Provincial expenses have grown by 58 per cent over the last decade, and per capita expenses in Newfoundland and Labrador for 2013-14 were $14,900. This is 45 per cent higher than the average of all other provinces in Canada.

The net debt of the Province has grown by $737 million in 2013-14 and is forecast to increase again in 2014-15. The amount of debt borne by each Newfoundlander and Labradorian now stands at $17,300. Net debt per capita has increased from $15,800 from the prior year.

“Government will have to look at all options available to return to surplus to ensure that programs and services provided to all Newfoundlanders and Labradorians are sustainable for the long term,” concluded the Auditor General.

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

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

2014 11 05                                                                        11:35 a.m.