Nfld. & Labrador

Under pressure to spend in election year: Marshall

Finance Minister Tom Marshall admits he's being lobbied to use a surplus as the PCs prepare for October's general election.

'Substantial surplus' expected as oil prices soar

Tom Marshall says other factors besides soaring oil prices will contribute to an expected surplus this year. (CBC)

Newfoundland and Labrador's finance minister says next week's budget will include a surplus, and admits he's being lobbied to spend as the governing Progressive Conservatives prepare for October's general election.

"There's always pressure on the finance minister to spend money. The finance minister is the one person at the table who has to say 'no,' " Tom Marshall told CBC News.

"In an election, it's pretty tough."

Marshall, who recently revealed  that the fiscal year that ended in March will also include a surplus, will not reveal what the expected surplus for 2011-12 will be until the budget is released next Tuesday.

Soaring oil prices are helping the provincial government's financial position although Marshall said other factors are at play, too.

"The value of mineral shipments went up 90 per cent this year and so, corporate income tax, oil production and the rebound in minerals help our economy a lot this year and will mean a substantial surplus," Marshall said in an interview with Here & Now's  Debbie Cooper.

Nonetheless, oil is a driving factor for the province's books. Last year, the government based its estimates on Brent oil trading at $83 per barrel. It was trading at more than $122 on Friday morning.

Marshall would not disclose what the government's priority for using the surplus will be. He said in recent years government has emphasized debt reduction, social services and infrastructure.

"We've come one heck of a long way," Marshall said, noting that Newfoundland and Labrador now enjoys one of the best credit ratings in the country.

"We're off equalization — who would have believed that?"