November 6, 2018
Improving Revenues and a Reduced Deficit: Provincial Government Releases 2018 Fiscal and Economic Update
The Honourable Tom Osborne, Minister of Finance and President of Treasury Board, today released the province’s annual Fiscal and Economic Update, which provides a snapshot of the province’s fiscal situation at the midway point of the fiscal year ending March 31, 2019.
The province’s projected deficit has been revised to $547 million, an improvement of $136 million from the original Budget 2018 forecast.
- The improved deficit is primarily the result of better than anticipated revenue, which has increased by $130 million from the original budget forecast.
- The price of oil has been higher than the Budget 2018 projection of US $63 per barrel, and has been revised to $74 per barrel.
- The US to Canada exchange fell to US$0.77 from the US$0.79 at Budget.
- Expenses have held relatively steady at $8.35 billion as projected in Budget 2018, with a slight decrease of $5.7 million.
Economic indicators show an economy that is improving, with several economic indicators showing more positive results than expected at budget time:
- The unemployment rate has declined from 2017 and is expected to decline further in 2019.
- While retail sales have tapered off in recent years, indicators project renewed growth between 2018 and 2022.
- Household income is expected to trend upward in line with wage gains in the economy.
- Capital investment it is expected to rebound next year as West White Rose and Voisey’s Bay underground mines ramp up development. Capital investment in 2019 is projected at close to $11 billion, which is comparable to investment of $11.5 billion in 2013 as the province entered the height of mega project development.
“The balanced approach we established with The Way Forward is working, and economic indicators are showing that our economy is improving. We have reduced the overall annual deficit by nearly $2 billion since the situation we faced in December 2016. We have done this while maintaining public access to services and promoting economic development. We will continue to act as responsible stewards for the public purse, improving our fiscal situation while building for our future.”
Honourable Tom Osborne
Minister of Finance and President of Treasury Board
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2018 11 06 12:10 p.m.