The logic is simple—save resource revenue during good times to cover the shortfall during bad times.
newfoundland & labrador budget
According to the provincial budget, debt will rise from $16.5 billion last year to $17.1 billion this year.
Despite the most difficult fiscal position in Canada, the province increased program spending in nine of the last 10 years.
When the province's resource revenues declined by roughly 22 per cent, the government did not commensurately reduce program spending.
Newfoundland and Labrador's budget deficit stands at $825 million.
The reduced deficit relies largely on oil and gas royalties and transfers from Ottawa.
Government salaries and benefits comprise approximately 42 per cent of the province's spending.
At $2,055 per person, the province's government debt burden is the highest in Canada.