The provincial deficit is down substantially but not because government is spending less. A few years ago it was over $2 billion but it’s pegged this year to be $351 million. Newfoundland and Labrador expects to be back to surplus in about four years.

Larry Short, senior investment advisor at Short Financial, a branch of IA Private Wealth in St. John’s, would have liked to see some kind of effort to reduce spending such as by offering retirement packages to older workers. Instead, government got the deficit down by banking on larger revenue.

We are going to borrow an extra billion dollars this year and our long-term debt is over $17 billion.

Short says we have to be mindful that a boom is always followed by a recession and before that recession, interest rates usually go up.

He says about $2.5 billion comes due this year and that has to be re-financed at a higher interest rate than we would have gotten three years ago.

Still, the smaller the deficit, the better.

It’s progress he says, but he wonders what the plan is and whether we can depend on this management process in the future not only in boom times but in a recession.