The province has introduced an election-style budget touching on a variety of needs, but the shadow cast by U.S. President Donald Trump, and the fear of a global recession, looms large over what’s ahead.
There are no tax or fee increases in this year’s fiscal plan, which includes a 300 per cent increase in the Child Benefit, increases to income support benefit rates, and the indexation of the senior’s benefit to the consumer price index, which is expected to benefit some 50,000 Newfoundlanders and Labradorians aged 65 or older.
Money is set aside for infrastructure, health care and education, and a $200 million dollar contingency has been set aside to mitigate the impact of Trump’s tariffs on the local economy – the details of which have not yet been outlined.
$90 million has been earmarked over a three-year period to encourage new oil exploration in the province’s offshore beginning next year, and $70 million over the next eight years for deferred maintenance at Memorial University.
Money has also been set aside to establish an RCMP-RNC joint task force targeting drug and gun crime, and for six new Crown attorneys, 14 new deputy sheriffs, 32 new correctional officers, and 10 new front-line RNC officers on the northeast Avalon.
(VOCM News)
The new spending comes at a cost, the projected deficit for 2025-26 is $372 million with projected spending exceeding revenue by close to $1 billion. Net debt is expected to be $19.4 billion in the 2025-26 fiscal year. The province is borrowing $4.1 billion, most of which will be used for infrastructure.
While the deficit is down to $372 million from $1.5 billion in 2020-21, the province had previously projected to return to surplus this year, but the return to balance has been delayed by a year as the province focuses on affordability and tariff mitigation.
The budget is based on oil price projections of $US 73 a barrel, which may seem ambitious given tumbling world markets, and a dramatic drop in oil prices in recent days. Government acknowledges the price of oil is volatile, and projections are based on market prices as of March 11.
