Nfld. & Labrador

N.L. facing 'string of deficits,' Conference Board of Canada says

A new report from the Conference Board of Canada says the province will run deficits for the next four years as a result of low oil and mineral prices.
The provincial government is expected to face four years of defects, according to the Conference Board of Canada. (Submitted by Tim Morrill)

Newfoundland and Labrador will run deficits for the next four years, according to a new report released by the Conference Board of Canada.

The board said due to falling oil and mineral prices, the province's economy shrank by nearly three per cent last year. 

While the Davis government has raised taxes and closely controlled spending in its April budget, the Conference Board predicts that oil prices are unlikely to improve and  tax increases will not be enough to bring the province out of the red. 

Government has planned to restrain spending at an annual growth rate of 1.2 per cent per year until 2018-19, according to a news release issued by the board.

The board also said program spending per person in the province is the highest in Canada. 

The Conference Board suggests government will have to control spending on health care, which currently consumes 43 per cent of the province's revenues, in order to meet targets of a balanced budget.

Positive economic growth is expected again in 2017, the report said, as several major mining projects wind down and oil and mineral prices recover. 

The province should be able to balance the books in 2018-19, one year earlier than government expected, according to the report's findings. 

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