The mining industry plays a central role in the province's economic growth and job creation.
newfoundland & labrador economy
The logic is simple—save resource revenue during good times to cover the shortfall during bad times.
Ottawa has added new subjective criteria to the regulatory process.
Newfoundland and Labrador's budget deficit stands at $825 million.
The reduced deficit relies largely on oil and gas royalties and transfers from Ottawa.
Capital is mobile and will flow to jurisdictions with sound regulatory regimes and competitive fiscal policies.
The province's spending is projected to increase by $542 million.
While the regulatory change is welcome news, significant reforms are still required to restore investor confidence.
In the last 37 fiscal years, the province has only posted seven budget surpluses.
This year’s deficit is projected at $1.8 billion, equivalent to 6.2 per cent of the provincial economy.