A local chartered accountant says the province is pushing the limits of what it can borrow to keep things afloat.

Finance Minister Tom Osborne last week indicated that the province will have to borrow another $3-billion to address rising expenses and a big drop in revenue.

The province had structured its budget on oil fetching $65 USD per barrel. Those prices plummeted once the pandemic struck, but have since rallied—albeit only to about half of those original projections.

Larry Short says coupled with the loss in revenue is the damage done to the economy as a whole. The decline in oil exploration activity is also having an impact.

He says exploration was contributing another $200-million a year to the local economy. Even under the best of circumstances, the province was going in the hole $1-billion a year. Going forward, Short says, we’re going to see higher costs with lower revenue.

Short says a political solution must be found, but admits that’s going to be challenging. He calls cutting $1-billion from a $7- to $8-billion budget “pretty intense.”

He also cites the $200-million in Muskrat Falls rate mitigation, contingent on a similar contribution from Ottawa. He warns to try to cut $1-billion from the budget and still expect the economy to hum along is bordering on the unrealistic.