The COVID-19 pandemic has contributed to a massive deficit for the 2020-21 fiscal year: $2.1 billion, up from $796 million first projected.
Finance Minister Tom Osborne delivered the fiscal update Friday. Osborne says the 2020-21 budget will be delivered in September, but a more specific date is not yet available.
Revenues are down by $631 million, with $560 million attributed to decreases in oil royalties. Expenses increased by $720 million, with $261 million attributed to increases in the health care sector.
The net debt of Newfoundland and Labrador is projected to hit $16.7 billion in 2020-21, up from a projected $14.6 billion. Instead of borrowing $1.2 billion, the province will now have to borrow $3.2 billion to get through fiscal 2020-21.
As a result of the numbers, the Department of Finance is projecting a higher rate of outmigration than originally thought. The department is anticipating 3,700 people will find a new home, largely due to decreased economic opportunities in the province.
The unemployment rate in Newfoundland and Labrador will increase from 13.5 per cent to 14 per cent in the next fiscal year. The department expects an 11,400 decrease in the number of people employed, down from 225,200 to 213,800.
The net debt of Newfoundland and Labrador is projected to hit $16.7 billion in 2020-21, up from a projected $14.6 billion. Instead of borrowing $1.2 billion, the province will now have to borrow $3.2 billion to get through fiscal 2020-21.
The price of oil was originally projected at USD $68 per barrel for 2020-21. The projection tumbled to USD $34 per barrel for 2020-21 in the fiscal update.
The department notes that every USD $1 increase or decrease in the price of oil means an $18-million difference for provincial coffers.
Compared to other provinces, Newfoundland and Labrador has been hit particularly hard compared to other Atlantic Canadian Provinces.
Newfoundland and Labrador added $1.4 billion to the deficit, while Prince Edward Island added $200 million and New Brunswick added $300 million to their deficits. Saskatchewan and Manitoba will add $2.5 billlion and $2.6 billion to their deficits as a result of COVID-19.
Osborne notes the figures presented Friday could change by the time the budget is delivered in September.
More to come
