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December 2, 2013

Supporting Long-Term Prosperity Through Responsible Decisions

Projected Deficit Revised Downward to $450.6 Million in Fall Update

Today the Provincial Government released the province’s 2013-14 Fall Update. As a result of lower than anticipated expenditures since Budget 2013, the projected deficit has been revised to $450.6 million, an improvement of $113.2 million over the budget projection of $563.8 million.

“While our projected deficit has improved since budget, we must continue to be responsible in managing the province’s finances in the coming year, as outlined in our 10-Year Sustainability Plan. Our government remains focused on the province’s long-term prosperity by encouraging job creation, strong communities, a vibrant economy and natural resource development that provide maximum benefit to Newfoundlanders and Labradorians.”
- The Honourable Tom Marshall, Minister of Finance and President of Treasury Board

Overall net expenses are now expected to be $270.1 million lower than projected at budget primarily as a result of delays in infrastructure and program spending, and a projected increase in related revenues. The overall reduction is offset by the $62.5 million approved to implement signed and pending collective agreements, for net savings of $207.6 million.

Projected revenues are now expected to be $94.4 million lower than the budget forecast, mainly due to downward revisions in offshore royalties. While the average price of oil for 2013-14 is estimated to be $107US per barrel, higher than the average budgeted price of $105US per barrel, oil production was lower than expected due to a longer than predicted shutdown of the Terra Nova project (75 days compared to 24 days as projected at budget). Corporate Income Tax is lower than projected, primarily as a result of lower offshore activities and there are also declines in mining tax primarily due to lower nickel prices. Offsetting the declines are increases in the Canada Social Transfer and Canada Health Transfer as a result of federal re-estimates of population. Also, higher personal income for prior years is reflected in higher Personal Income Tax revenue.

“Our economy has seen significant growth since 2003 and that growth is continuing this year. Newfoundland and Labrador is leading all provinces in Gross Domestic Product (GDP) and capital investment growth. Retail sales have been stronger than anticipated, driven by new car sales which are on track for posting the highest number ever recorded in the province. Employment is expected to reach record levels this year and the unemployment rate is expected to decline to the lowest rate since 1973.”
- Minister Marshall

In releasing the Fall Update, the Provincial Government also provided the actual unaudited deficit for 2012-13. At Budget 2013, the deficit for Budget 2012 was projected at $430.9 million. The unaudited actual deficit for 2012-13 is anticipated to be $198.8 million. Public Accounts will be released later this month, which will include the final number as reflected in the audited financial statements.

The Provincial Government is continuing to work towards a return to surplus in 2015-16.

Through sound fiscal management and responsible decisions, the Government of Newfoundland and Labrador is strengthening the business environment, encouraging the development of innovative industries, and diversifying the economy.


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2013-2014 Fall Update

Media contact:
Tansy Mundon
Director of Communications
Department of Finance
709-729-6830, 693-1865

2013 12 02                                     11:50 a.m.

Last Updated:
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