ST. JOHN'S, N.L. — A $1.92-billion surplus for budget 2019 in Newfoundland and Labrador sounds exciting, but the surplus has more to do with the Atlantic Accord than it does changes in how the province is managed.
The Liberal government’s final budget before the 2019 general election boasts a $1.92-billion surplus.
Discounting the money to be received from the Atlantic Accord in the future, the surplus becomes a deficit of approximately $570 million.
The massive surplus is more of an accounting function than a direct reflection of the province’s finances. Officials with the Department of Finance said the $2.5 billion in guaranteed revenue from the Atlantic Accord must be accounted for in the first year it is received because there are no restrictions on how the money can be spent by the provincial government.
The 2019 budget accounts for $134 million in this fiscal year, with the remaining Atlantic Accord money flowing until 2056.
Government spending increased again for the 2019 budget to $8.42 billion, up from $8.27 in last year’s budget.
Revenues increased to $7.89 billion, with the $134 million in Atlantic Accord money factored in and future dollars left out of that calculation.
The document does not include tax and fee increases this year, but also misses large-scale decreases in taxation. The elimination of the remaining 10 per cent of taxes on auto insurance introduced in the 2016 budget is the marquee tax decrease touted by the government.
Offshore oil and gas revenues are projected to remain essentially the same as in the previous budget document. The actual take from offshore oil and gas in the last budget was $1.06 billion, and is projected to increase to $1.09 billion in 2019-20, with a base estimate of $65 per barrel for oil.
The Atlantic Accord figures also present some differing pictures of the provincial debt numbers.
The full $2.5-billion figure counts toward the total net debt of the province, reducing it from $15.4 billion last year to $13.7 billion, but total debt for the province increased again from $21.1 billion to $22.4 billion in the 2019-20 budget document.
That means debt servicing has already increased as an expense of the province, up from $1.1 billion in 2018-19 to $1.39 billion in this year’s budget.
The government will spend $836 million on K-12 education in 2019-20.
Twitter: @DavidMaherNL
