N.L. net debt plunges to $7.9 billion

Rob Antle
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Regular surpluses chip away at total

The bad news is that every man, woman and child in the province now owes $15,500 on Newfoundland and Labrador's provincial debt.

The good news is that amount is down sharply from four years ago.

Then, the number was $23,000.

Record oil prices at peak production levels have dumped unexpected billions into the provincial treasury, helping the Williams administration reduce the province's net debt to $7.9 billion from nearly $12 billion.

Newfoundland and Labrador Finance Minister Jerome Kennedy receives applause while reading the 2009 budget speech. At left is Health Minister Ross Wiseman. - Photo by Keith Gosse/The Telegram

The bad news is that every man, woman and child in the province now owes $15,500 on Newfoundland and Labrador's provincial debt.

The good news is that amount is down sharply from four years ago.

Then, the number was $23,000.

Record oil prices at peak production levels have dumped unexpected billions into the provincial treasury, helping the Williams administration reduce the province's net debt to $7.9 billion from nearly $12 billion.

"In hindsight, we can affirm that our resolve to decrease debt has served us well," Finance Minister Jerome Kennedy said in Thursday's budget speech.

"We understand that if we didn't reduce debt in the good times, it would be more difficult to meet financial challenges in times of economic uncertainty. Our prudent financial management enables us to navigate the economic storm that is upon us."

The province's net debt hasn't been this low since 1999.

That $7.9-billion amount could rise this year, however.

The province is projecting a budget deficit of $750 million for 2009-10.

This year's projected deficit follows four consecutive years of oil-fuelled surpluses. Kennedy said the province expects to return to surplus territory within two years, by 2011.

In the past, the province's auditor general has highlighted the problems associated with high debt levels.

Auditor General John Noseworthy said in February that the national average net debt is approximately $10,000 per capita. Even with the past year's massive surplus, Newfoundland and Labrador is well above that level, at $15,500.

Kennedy acknowledged in the budget speech that the debt is still high by national standards, but said the government's "commitment to fiscal prudence" has moved the number in the right direction.

rantle@thetelegram.com

Geographic location: Newfoundland and Labrador

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Recent comments

  • Unions
    July 02, 2010 - 13:30

    Or on paying that Gang called the Nurses Union more money.

  • Paul
    July 02, 2010 - 13:21

    Keep knocking the debt. The various gov't unions and anyone who complains about lack of money for schools, hospitals and more sick leave should realize that interest on debt affects everyone and chews up money that could be used elsewhere. With the short term oil profits the focus should be on eliminating that debt asap and then trying to stay in a balanced budget as much as possible. Good job on the gov't for making that an obvious priority.

  • Doug
    July 02, 2010 - 13:20

    When you read numbers like this - 7.9$ billion (billion!!), it really shows how ignorant and downright stupid various union leaders and officials are. Not so long ago when the original version of the Atlantic Accord was signed and some extra bucks were going to be coming in, NAPE, the teachers, nurses, etc. were all doing back-flips figuring that the province must be flush with cash so could hand it all over to them. It never occurred to any of them that the province had a massive debt racked up over the years - at least partially due to union demands.

  • Jon
    July 02, 2010 - 13:17

    What do the Danny-bashers have to say to this? I guess they'd rather waste tax money on debt interest payments.

  • Unions
    July 01, 2010 - 20:19

    Or on paying that Gang called the Nurses Union more money.

  • Paul
    July 01, 2010 - 20:04

    Keep knocking the debt. The various gov't unions and anyone who complains about lack of money for schools, hospitals and more sick leave should realize that interest on debt affects everyone and chews up money that could be used elsewhere. With the short term oil profits the focus should be on eliminating that debt asap and then trying to stay in a balanced budget as much as possible. Good job on the gov't for making that an obvious priority.

  • Doug
    July 01, 2010 - 20:03

    When you read numbers like this - 7.9$ billion (billion!!), it really shows how ignorant and downright stupid various union leaders and officials are. Not so long ago when the original version of the Atlantic Accord was signed and some extra bucks were going to be coming in, NAPE, the teachers, nurses, etc. were all doing back-flips figuring that the province must be flush with cash so could hand it all over to them. It never occurred to any of them that the province had a massive debt racked up over the years - at least partially due to union demands.

  • Jon
    July 01, 2010 - 19:58

    What do the Danny-bashers have to say to this? I guess they'd rather waste tax money on debt interest payments.