Newfoundland and Labrador is obliged to turn unexpected gains in oil and tax revenues against its lingering debt, the province's finance minister said Wednesday.
"It would be a travesty if we don't use this windfall we have, this oil — which will be gone one day — if we don't use that to get rid of this massive debt that our people and our governments have accumulated," Tom Marshall said in an interview.
Marshall revealed Tuesday that the government is expecting to finish the current fiscal year in March with a surplus of $12.3 million, far better than the $194-million deficit pegged in last spring's budget.
Marshall acknowledged that the government is being pressured to use the surplus and better-than-expected revenues to address numerous concerns, from pay for physicians to social services to tax relief, but said his own priority remains lowering the public debt, which he said is less than $9 billion.
"If future generations look back at us and say, My God, they had a big massive debt, they had this oil, they spent it all on themselves — it would be terrible if we did that," Marshall said.
Debt reduction had been a greater priority for the government several years ago, and the province was able to lower the accumulated debt from $12 billion to almost $8 billion.
The global recession, however, triggered a stimulus package and a greater use of public funds for capital spending.
'We have to be vigilant'
Marshall said the government must continue with its plan to attack the debt, particularly because there are no guarantees that revenues from oil — a non-renewable resource — will stay as high as they have been.
"We have to be vigilant. We're so reliant on oil [for] our revenues, and it's volatile."
Derek Sullivan, who chairs the St. John's Board of Trade, said while the government's revenues have increased, so has its spending.
"We need to sound a note of caution as well and make sure that we're not growing at a rate that we can't sustain, and that we're making the right investments and paying down the debt," Sullivan told CBC News.
Robert Kavcic, a Bank of Montreal economist, said the financial future of Newfoundland and Labrador appears to be rosy, at least for the medium term.
"It looks like growth in Newfoundland is going to be among the top performers for at least a couple of years going forward, certainly outperforming central [Canada] and the rest of Atlantic Canada," he said.
But NDP Leader Lorraine Michael said the government could use its surplus to address some immediate social concerns, including a long-running strike of 15 support workers on the Burin Peninsula.
"Use it to benefit us in the present," she said.