A financial rating agency says further structural measures are required if Newfoundland and Labrador is to meet its projections on the deficit.

Four years ago, the province had a deficit of $2.2-billion and while it has come down, DBRS Ltd. says without the Atlantic Accord agreement last spring, the deficit would have been $577-million.

The debt-to-GDP ratio is forecast to rise to about 56 per cent this year, which would be the highest debt burden of any province, before gradually declining thereafter.

DBRS has maintained the province’s credit ratings, saying that government’s efforts have significantly reduced annual budget deficits and slowed the pace of debt growth. However, the outlook remains challenging.

The agency notes that their outlook is subject to downside risks including commodity prices and the full costs of Muskrat Falls.

Minister Osborne Responds

Finance Minister Tom Osborne admits achieving a forecast surplus of $1.9-billion in 2019-2020 as a result of the Atlantic Accord is more challenging. He also acknowledged that government spending is still an issue.

Osborne told reporters this afternoon that the province’s credit ratings are “considerably better” than they were in the 1990s and the 2000s, but says the province still needs to deliver services.

He maintains the province is in better shape than it was back then.

He says he is not willing to sacrifice a hospital that people need to reach surplus – but with 94 potential oil wells in the offshore, and 1 in 6 of those expected to produce oil, the outlook is positive. @VOCMNEWS #nlpoli pic.twitter.com/Hya6V1IY0k

— Ben Murphy VOCM (@BenMurphyVOCM) September 26, 2019