Newfoundland and Labrador's fall fiscal update shows income and spending are up, oil production is down — and housing starts have plummeted.
The numbers in the provincial government's update — a check-in at the middle of the fiscal year on how budgetary projections measure up to reality — are largely positive, including a slight improvement in
the deficit.
Finance Minister Siobhan Coady touted declining inflation — at 3.5 per cent, tied for second-lowest in Canada — and increasing household spending — up 4.4 per cent, outpacing inflation — as positives, but
acknowledged residents are still struggling with high housing and food costs.
"It's difficult for a lot of people, and I'm not underestimating how challenging it is," she said. "That's why we've put $140 million in this year's budget toward supporting social housing, and you've seen some, you
know, fairly significant investments."
With a fiscal update delivered on Halloween, Coady didn't have any treats to hand out as happened last year, with the announcement of one-time cost-of-living relief cheques of up to $500. Last year's update
featured an unexpected surplus on the back of higher oil revenues, said Coady.
"Last year we had extra money from the oil and gas industry. This year we're not seeing that, therefore we are not able to provide the same cheque that we did last year," she said.
The projected budget shortfall is now $154 million instead of the $160 million forecast in the spring, thanks to a $204-million increase in revenue largely in forfeitures from oil companies abandoning offshore oil
prospects.
Government expenses are also up, to the tune of $198 million, mostly due to higher wages following new collective bargaining agreements and the effect of higher interest rates on debt servicing.
And the province's borrowing requirement is also up, by $700 million, and net debt is up nearly a billion dollars, from $16.2 billion in the budget to a forecast $17.1 billion.
