AG cautions province to be fiscally prudent

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Says Muskrat Falls needs close monitoring

Provincial Auditor General Terry Paddon warned in a report today that, among other things, the province’s net debt is increasing, obligations related to employee future benefits increased in 2013 and per capita expenses in Newfoundland and Labrador remain the highest of any province in Canada.

The report advises the provincial government to continue to closely monitor the sustainability of program spending, the unfunded pension liability and the liability for group health and life insurance retirement benefits.

Paddon also urges the province to keep a close watch on the Muskrat Falls hydroelectric project to ensure that cost overruns are minimized.

The document, Report to the House of Assembly on the Audit of the Consolidated Summary Financial Statements of the Province of Newfoundland and Labrador for the Year Ended March 31, 2013, includes these highlights:

• The province recorded a deficit of $195 million for the year ended March 31, 2013 with a deficit of $451 million forecast for 2013-14.

• The province remains heavily reliant on the offshore oil sector for a substantial portion of provincial revenues.

• Provincial net debt increased by $511 million to $8.3 billion at March 31, 2013. The forecast deficit of $451 million for 2013-14 will push net debt even higher by March 31, 2014.

• Provincial obligations for employee future benefits (pensions and group health and life insurance) increased by over $400 million during the year. The combined liability was $5.6 billion at March 31, 2013.

• While expenses decreased by $137 million from the previous year, per capita expenses in Newfoundland and Labrador remain the highest of any province in Canada and are 40 per cent higher than the average of all other provinces for the year ended March 31, 2013.

• Changing demographics in Newfoundland and Labrador will significantly affect the services required, their delivery and associated costs.

• The province has committed $1.9 billion in equity financing for the Muskrat Falls project as well as any contingent equity required to cover cost overruns. More details to come on The Telegram website and in The Weekend Telegram. The AG’s report can be viewed online at www.ag.gov.nl.ca/ag/reports.htm

More detail check out these two stories. CLICK HERE and CLICK HERE.

 

Organizations: House of Assembly on the Audit of the Consolidated Summary Financial Statements, Province of Newfoundland and Labrador, The Telegram

Geographic location: Newfoundland and Labrador, Canada

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  • Where
    January 17, 2014 - 11:04

    Now where have I heard this before???