N.L. reports rising debt, deficit; minister says federal help needed

N.L. reports rising debt, deficit; minister says federal help needed
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ST. JOHN’S, N.L. — Newfoundland and Labrador’s financial picture looks increasingly bleak, and the province’s finance minister warns that help from Ottawa will be necessary to get through the challenging period ahead.

The province is reporting a net debt of $14.2 billion and a deficit of more than $1.1 billion.

That’s without accounting for cash from the federal-provincial agreement known as the Atlantic Accord, which will direct funds from Ottawa’s shares in the Hibernia offshore oil field to the province over decades.

Figures covering the fiscal year ending on March 31 account for a drastic drop in oil prices, offshore oil production shutdowns, pandemic-related closures and a January snowstorm that required extensive shutdowns in several municipalities.

Newfoundland and Labrador’s finances were in rough shape before the pandemic, and Finance Minister Tom Osborne says current challenges have made the Liberal government’s goal to balance the budget by 2023 impossible.

Osborne says financial assistance from Ottawa will be necessary, whether through the equalization program or other another fiscal stabilization program to help provinces through the pandemic.

This report by The Canadian Press was first published June 4, 2020.

The Canadian Press

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