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Newfoundland and Labrador's debt keeps going up

The level of debt carried by residents of the province has grown.
The level of debt carried by residents of the province has grown. - 123RF Stock Photo

Province’s residents now owe $27,898 each

In order to solve the debt problem in Newfoundland and Labrador, each resident would have to cough up a paltry $27,898 — a $2,110 increase from 2018.

The number comes as part of the Public Accounts, released last Thursday by the provincial government.

The per-capita debt burden is almost double that of residents in the Maritimes, who see a per-capita burden of just over $15,000 between the three other Atlantic Provinces.

For the first time, more than half of that per-capita debt number comes from the amount of borrowing the provincial government undertook in the 2017-18 budget. The total net debt for Newfoundland and Labrador – a province of roughly 528,000 people – is now at $14.7 billion.

The per-capita debt burden is almost double that of residents in the Maritimes, who see a per-capita burden of just over $15,000 between the three other Atlantic Provinces.

The per-capita debt has been growing steadily since 2014, when each person in the province owed $9,614.

Debt as a percentage of the province’s gross domestic figures is now 45.2 per cent. The increase is just a 0.6 per cent increase over the previous year, but it represents a 38.6 per cent increase since 2014.

The report, filed by the Department of Finance, notes “government has increased its demands on the provincial economy.”

The province updated its 2017-18 deficit numbers. The 2017-18 provincial budget originally forecasted a deficit of $812 million. The final numbers, updated with the Public Accounts report, show a deficit of $910 million — close to $100 million higher than originally forecast.

Oil revenue is up, but general revenue is down

The report says the difference is due in part to revenues being $53 million lower than forecasted. Expenses were $74 million higher than forecasted in the 2017 budget.

The increased expenses are largely attributed to $103 million more in salaries and employee benefits, particularly due to higher MUN retirement costs and severance payments to NAPE members as part of the most recent collective agreement.

Oil and gas revenues also came in higher than originally forecasted. The 2017 budget estimated $881.7 million in oil revenues, but actually received $943 million, a $62-million increase. The higher oil royalty revenue was largely attributed to higher production and higher oil prices.

The 2018 budget projects a deficit of $683 million, while the average price of oil is projected at US$63 a barrel for the year.

So far, the lowest oil price in 2018 came in February, when it was US$63. The highest price was seen at the end of September, at US$75 per barrel.

The Department of Fnance has yet to announce a date for the mid-year fiscal update.

david.maher@thetelegram.com

Twitter: DavidMaherNL

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