The Honourable Siobhan Coady, Deputy Premier and Minister of Finance, today announced that the Government of Newfoundland and Labrador is reducing debt and borrowing and making the first-ever contribution to the Future Fund as a result of a strong fiscal and economic outlook for 2022-2023. This is in addition to the recently announced one-time cost of living relief; bringing the total to $430 million in targeted short- and long-term investments since March 2022 to help residents with the currently high cost of living.

Government is projecting higher than forecast revenue by $1.33 billion for the fiscal year ending March 31, 2023, primarily due to offshore royalties, corporate income tax, personal income tax and sales tax.

The projected increase in revenues enables government to reduce the net debt to $16.04 billion, a reduction of $1.01 billion from the original Budget 2022 estimate of $17.05 billion.

Borrowing requirements are reduced from $2.7 billion to $1.8 billion for 2022-23.

Also announced today is government’s intention to contribute $157 million to the newly established Future Fund. $107 million is based on non-renewable resource royalties received in 2021-22, as specified in the regulations. An additional one-time payment of $50 million will be contributed to the Future Fund based on the 2022-23 projected increase in revenues.

The average price of oil for 2022-23 has been revised to US$102 from the Budget 2022 projection of US$86 dollars. The Canada to US exchange rate has been adjusted to 77.7 cents from the Budget 2022 forecast of 79.3 cents.

Newfoundland and Labrador’s economy has performed well thus far in 2022:

• The unemployment rate fell to 8.2 per cent in September, the lowest rate since consistent records began in 1976;
• Population marked the fifth consecutive quarter of growth for the province, and the largest quarterly gain in recent history; increasing by 5,520 persons from July 1, 2021 to July 1, 2022, the largest annual increase since 1976;
• Housing starts are up 44.4 per cent over the first three quarters of the year;
• Capital investment is forecast to increase 4.7 per cent in 2022;
• Real Gross Domestic Product, a measure of our economy, is forecast to grow by 0.9 per cent; and
• Tourism sector performance continues to benefit from a pandemic rebound and the Come Home 2022 campaign.

Looking forward, economic activity in Newfoundland and Labrador is expected to remain strong in the province, with opportunities in the oil and gas, mining, wind energy, groundfish, aquaculture, technology and film and video industries.

The 2022 Economic Update is available at www.gov.nl.ca/fin/budget/fall-updates/.

Government’s strategic plan to return to balanced budgets, lower the cost of borrowing, and decrease debt is focused on:

• Fixing the financing of the Muskrat Falls Project through rate mitigation and a $5.2 billion agreement with the federal government;
• Prudent fiscal governance, including expenditure control, transformational and modernization of government, strengthening the role of the Auditor General and balanced budget legislation; and,
• Responsible debt management, including effective treasury management, improved liquidity, optimizing investment performance and establishing a Future Fund.

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“We are fortunate this year to have a projected increase in revenues primarily due to increases in offshore royalties and tax revenues. This is enabling us to not only provide a one-time cost of living relief cheque to residents, but also to reduce our debt and borrowing requirements. We are also making our first contribution to the newly established Future Fund to start putting aside revenues to strengthen finances, pay down expensive debt and lower the cost of borrowing. While we are in a better fiscal situation this year, we must still continue on our path to achieve a stronger, more sustainable Newfoundland and Labrador, to hold the line on expenses where possible, and to invest strategically.”
Honourable Siobhan Coady
Deputy Premier, Minister of Finance

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Learn more
2022 Fiscal and Economic Update

Budget 2022

Future Fund Act to Receive Second Reading in House of Assembly

Provincial Government Provides Additional One-time Cost of Living Relief

Improved Outlook for Province’s Credit Rating

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Media contact
Victoria Barbour
Finance
709-729-4087, 327-6152
victoriabarbour@gov.nl.ca