For the first time since 2011/2012, the provincial government is reporting a surplus.
Government held its fall fiscal update this morning.
In the spring budget, the projected deficit was $ 351 million; now that figure has morphed into a surplus of $479 million.
The Department of Finance owes the turnaround to higher-than-expected revenues of $1.3 billion.
The biggest contributing factors to that are offshore revenues of $400 million, corporate income tax revenues of $400 million, and personal income tax revenues of $300 million.
The province’s net debt has decreased by over $1 billion as well, from over $17 billion in the fall to just over $16 billion now.
Other positive indicators include population growth of 1.1 per cent and a decrease in the unemployment rate to 10.9 per cent—the lowest seen since the 1970s.
Overall, they say the NL economy is performing well, noting future major oil development, production, and employment are expected to rebound, and the impact of announcements related to wind and hydrogen development.
As for global challenges, they say inflation is higher due to supply chain issues though that has been slowing in recent months. As well, they say the outlook for the global economy hinges on inflation and the impacts of the war in Ukraine.
Finance Minister Siobhan Coady says the improved economic forecast is allowing government to contribute $107 million to the newly-established Future Fund from the royalties received through non-renewable resources.
An additional one-time payment of $50 million will be put into the Future Fund for a total of $157 million.
She says the Future Fund is part of the province’s financial plan to pay down expensive debt and lower the cost of borrowing. She explained to reporters this morning how the Future Fund will be used to pay down debt.
She explained that the province’s debt is in bonds, and those bonds must mature before they can be paid down. So the money to pay down the debt is being held in the Future Fund and building interest while they wait for the bond to mature.