Finance
November 5, 2014

Sound Fiscal Management Supports Shared Prosperity

Minister Responds to Auditor General’s Release of Report on Audited Financial Statements

The Auditor General today released his 2014 Report on the Audit of the Financial Statements for the Province for the fiscal year ended March 31, 2014. The financial statements released by the Provincial Government received an unqualified audit opinion from the Auditor General and confirmed that the deficit for the 2013-14 fiscal year was $388.6 million, a decrease of $175.2 million from the original forecasted deficit of $563.8 million.

“We are living and working in a time of impressive economic growth and prosperity, a time that provides us with an opportunity to sustain that prosperity for future generations. We are working to secure a sound financial foundation, which we will continue to build upon, while ensuring the long-term sustainability of our programs and services. We will continue on our proven course of effective fiscal management and invest strategically to ensure all Newfoundlanders and Labradorians benefit from the historic economic and social gains we have made in the past 10 years.”
- The Honourable Ross Wiseman, Minister of Finance and President of Treasury Board

The Auditor General outlined the financial position of the province in his report and the strength of the provincial economy, noting that in 2013-14 net debt as a percentage of the Gross Domestic Product was lower than the average of all other provinces, and 28.4 per cent of total revenues came from oil. He noted that Newfoundland and Labrador has the highest per capita expenses in Canada – 45 per cent higher than average – with contributing factors including a small population that is widely disbursed.

The Auditor General also noted the net unfunded liability related to employee future benefits (pensions and other post-retirement benefits) is greater than it was in 2005 despite more than $3.6 billion in special payments. He acknowledged that while he has not assessed details on the recent negotiated changes to the Public Service Pension Plan, he anticipates the changes could have a significant impact on the unfunded liability and the province’s net debt.

“We always place great value on the feedback and suggestions provided by the Auditor General. In the wake of recent events such as the decline of global oil prices, which put a strain on our finances, we will, as the Auditor General suggests, explore options available to ensure programs and services are sustainable in the long term and allow us to eventually return to a budget surplus.”
- Minister Wiseman

QUICK FACTS

• The Auditor General today released his report on the Audit of the Financial Statements for the Province for the fiscal year ended March 31, 2014.
• The financial statements released last week by the Provincial Government received an unqualified audit opinion from the Auditor General and confirmed that the deficit for the 2013-14 fiscal year was $388.6 million, a decrease of $175.2 million from the original forecasted deficit of $563.8 million.
• In 2013-14 net debt as a percentage of the Gross Domestic Product was lower than the average of all other provinces, and 28.4 per cent of total revenues came from oil.

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Media contact:

John Tompkins Director of Communications Department of Finance 709-729-6830, 728-7762 jtompkins@gov.nl.ca

2014 11 05                                             3:40 p.m.