ST. JOHN'S, N.L. — An unexpected windfall in oil riches has brought some much-needed economic relief to cash-strapped Newfoundland and Labrador.
The province reported a $547-million deficit on Tuesday, compared to the $683-million deficit projected in last spring's budget.
The difference — $136 million — is "all oil," according to Finance Minister Tom Osborne, citing rising oil prices.
The last three years have been the most economically difficult in the province since the Great Depression, he said, but he was confident his financial plan will get the province back on track.
"While we have not yet turned the corner, it is clearly in sight," Osborne said after unveiling the fall fiscal update.
The government is adjusting the projected price of oil to US$74 per barrel, US$11 higher than the US$63 per barrel projected in the spring budget -- a number Osborne still considers "abundantly prudent."
The province announced its deepest-ever offshore oil site at Bay du Nord this summer, which Premier Dwight Ball called a "new frontier" for the industry.
Osborne suggested possible future projects in the offshore oil sector could yield more financial boosts down the road.
He was confident that Newfoundland and Labrador's relatively clean offshore oil will remain profitable compared to products from Alberta's oilsands.
And he touted plans to diversify the economy through different capital projects in the mining, aquaculture and tourism sectors so reliance on oil doesn't burn a hole in the government's pockets.
NDP Leader Gerry Rogers said rising oil prices are giving the governing Liberals a boost, but there has been little progress in areas that affect residents' daily lives.
"They've been lucky in the right place at the right time," said Rogers.
In Osborne's fiscal update, the projected spending for the year remained on target at around $8.4-billion.
The update noted that the province's net debt now sits at $15.4-billion, with a $157-million decrease from the 2018 budget.
The province's financial borrowing requirements are also down about $200 million.
Osborne pointed to the over-budget Muskrat Falls hydro megaproject as the province's largest economic liability -- responsible for more than 30 per cent of the province's direct debt, according to Osborne.
The minister blamed the project, now the subject of a public inquiry, as a burden left by the former Tory government.
He also pointed to the much-maligned 2016 tax plan by former finance minister Cathy Bennett as a difficult policy that helped put a dent in managing the province's debts.
"I didn't like what had to be done, but it had to be done to get us back on track," Osborne said.
Richard Alexander of the Newfoundland and Labrador Employers Council said he is not confident the government will meet its promise of balancing the budget by 2022. The council released an opinion poll Tuesday suggesting only eight per cent of the population surveyed believes the government will meet the target.
"I think people are very, very concerned about the debt burden that's happening in this province. Their plan is risky and relies very heavily on taxation, it relies on the increasing price of oil," Alexander said.
"We need some action to be able to ... provide that confidence to the public and to businesses that things are going to get better."
Holly McKenzie-Sutter, The Canadian Press