The province drew down the remainder of its 2005 Atlantic Accord advance in the just-ending fiscal year, driving the province's surplus for 2008-09 to a whopping $2.4 billion.
Unprecedented oil revenues were responsible for the rest of the massive surplus, which was nearly five times higher than originally expected.
Even without the Accord decision, Newfoundland and Labrador's surplus would have been two-and-a-half times initial projections.
The move to draw down the entire remaining value of the 2005 Accord is largely an accounting exercise.
It is not new money. Instead, the 2005 payment is now fully reflected in the province's financial statements.
The Williams administration received a $2 billion upfront advance payment from Ottawa as part of the enhanced Accord deal signed four years ago.
The province applied that payment to long-neglected unfunded liabilities in its pension plans.
But accounting rules saw the province only book portions of that $2 billion amount into its financial statements over the past few years.
Technically, the province had not earned all of the money yet, even though it received the full advance.
The calculations on how much Accord money to book each year were based on the workings of the federal equalization program.
The 2005 Accord only applies in years when the province is considered "have not."
As of 2008-09, however, Newfoundland and Labrador is off equalization.
Department of Finance officials said the province is expected to remain in "have" status until the 2005 Accord's expiration in three years' time.
That means the 2005 Accord no longer applies.
So the government decided to put the remaining $1.1 billion in 2005 Accord payments onto the books for the just-ending year.
That drove the province's surplus to $2.4 billion from $1.3 billion for 2008-09.
Newfoundland and Labrador continues to receive cash payments each year from the original 1985 Atlantic Accord.
rantle@thetelegram.com
Province books all cash from '05 Accord
The Hibernia platform. - Telegram file photo
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Published on
March 27, 2009
- Published on July 1, 2010
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Rob Antle
Accounting change tops up record surplus for year ending
The province drew down the remainder of its 2005 Atlantic Accord advance in the just-ending fiscal year, driving the province's surplus for 2008-09 to a whopping $2.4 billion.
Unprecedented oil revenues were responsible for the rest of the massive surplus, which was nearly five times higher than originally expected.
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