Newspaper article The Canadian Press

Newfoundland and Labrador in 'Terrible' Economic State, Premier Laments

Newspaper article The Canadian Press

Newfoundland and Labrador in 'Terrible' Economic State, Premier Laments

Article excerpt

Newfoundland and Labrador in 'terrible' state

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ST. JOHN'S, N.L. - Newfoundland and Labrador's premier made clear Tuesday his province's precipitous drop from national economic leader to fiscal basket case, as his Liberal government set a grim course with its first throne speech.

"It's terrible," Premier Dwight Ball said.

"There's no one even close to us when you look at other provinces," he told reporters outside the legislature. "We've never seen this ever before in our history."

Fixing the mess, and an "unprecedented" $2-billion deficit, will start with a budget in April or May, Ball said. He signalled that everything from tax hikes to job losses and spending cuts are on the table.

Ball also raised the E word -- as in equalization. It was a proud day as Newfoundland and Labrador, powered by oil and mining earnings, became a "have" province for the first time in 2008. It stopped receiving equalization payments that Ball now says would come in handy. The complexities of related requirements, however, mean little help is available so far, he told reporters.

"We're at Ottawa's door for all the programs that are in place."

The throne speech talks of "decisive actions" in the short, medium and long term to correct course. About one-third of provincial revenues come from offshore oil earnings. The treasury has been drained since Brent crude prices dove from US$115 a barrel in mid-2014 to hover between US$30 and US$40 in recent months.

The speech read Tuesday by Lt.-Gov. Frank Fagan says a new approach is needed to avoid successive deficits of around $2 billion.

"The choices ahead of us will not be easy," he read. "Everyone will have to accept some level of sacrifice in the months and years ahead if we are to provide critical services, while restoring accountability and stability to government finances."

The alternative is to borrow ever increasing amounts with higher interest, says the speech. …

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