Finance Minister Tom Marshall said he expects that he’ll need to go to the bond market to pay for government operations for the first time in a decade, starting in the coming budget year.
Finance Minister Tom Marshall. — Telegram file photo
Even so, he sounded generally upbeat about the province’s economic situation, even though the provincial government’s bank account is nearly empty, and in the coming year the government will need to borrow money to keep things going.
“We haven’t done that for quite some time. We’ve been very, very lucky. Very fortunate,” he said.
Marshall was speaking following the release of the province’s audited public accounts for the 2012-13 budget year. The public accounts are the final, definitive numbers on how much the government took in and spent in the 2012 budget year.
The deficit in that year was a bit smaller than the government originally forecast — $195 million instead of the $248 million originally estimated on budget day back in 2012. But speaking to The Telegram, Marshall also looked ahead to the 2014 budget, which he’s pulling together now in anticipation of the spring session of the House of Assembly.
Pre-budget consultations will start in the next month or so, although Marshall warned that after doing so many budgets already, he’s heard a lot of it before.
“I pretty well know what people are going to say because I’ve been there in the past and I know what the major issues are, but there’s always somebody new that shows up with a fresh perspective,” he said. “Mainly, what we get are people who are there to lobby me for their pet project. There’s an awful lot of that.”
In last year’s budget, then finance minister Jerome Kennedy made deep cuts across the board and laid off nearly 1,000 civil servants in order to get a handle of a big budget deficit.
The province’s 10-year sustainability plan calls for further cuts in the coming budget, but Marshall said he’s not making any firm decisions until he gets an updated sense of the province’s financial situation.
One spot of concern, he said, is the Hibernia oil platform, which is currently operating at diminished capacity because of an oil leak.
Instead of pumping about 145,000 barrels per day, Marshall said, it is pumping closer to 45,000 barrels, and that drop could hurt the province’s royalty revenues.
“That’s going to have a big impact on our numbers this year,” he said. “If the oil is in the ground, it’ll come out next year. It just won’t come out this year. It’ll just help next year and hurt this year.”
On the other hand, he said things are looking very good in the local economy; with the Canadian dollar sinking against the U.S. Greenback, everything from fish to forestry exports are benefiting.
And with higher employment and more capital investment, Marshall said the province's economy is ticking along well.
“Because they have this income and because for four years in a row we lowered income taxes, people have got high disposable income, and they’re spending. So all our numbers are great,” he said.
“I’m generally pleased with the state of the economy, especially given the fragility of what’s going on out there in the world economy.”