Newfoundland’s deficit more than $100 million lower than expected: Marshall

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Finance Minister Tom Marshall had some good news to deliver in his fall economic update: the province's deficit is more than $100 million lower than expected.

Minister of Finance Tom Marshall spoke to the media today regarding the 2013-14 fall economic update at Confederation Building. — Photo by Rhonda Hayward/The Telegram

Despite higher prices and a beneficial currency rate, oil revenues are expected to be down due to lower than forecast production in the offshore, but the government is now expecting to spend $270 million less than it originally budgeted, through a combination of delayed infrastructure projects and small program savings across government.

Marshall said that he still wants to stick to the 10-year Sustainability Plan unveiled last spring on budget day, but at the same time, he signalled that he's ready to back down on budget cuts planned for Memorial University, the College of the North Atlantic and the province's four health authorities.

Year 1 of the sustainability plan called for a “core mandate reivew” of the government, and it resulted in nearly a thousand people being laid off.

Year 2 of the plan was supposed to involve similar reviews to the university, college and health authorities.

“I think we can take a longer term approach,” Marshall said. “We would expect government agencies to be efficient, but we don't expect that there's going to be cuts of the magnitude that you saw at budget time this year.”

The big concern right now, Marshall said, is the pensions. The net debt of the province is just over $9 billion, and more than two thirds of that – $6.5 billion – is unfunded pension liabilities and post-retirement benefits.

Marshall said he's already been having some conversations with the province's union about the problem, and that they're looking at options, but personally, he doesn't want to convert public sector pensions to a defined contribution system.

“I'm not a proponent of the view that we should go to a defined contribution plan; I don't think they work,” Marshall said.

“We've said all along that this is a governess that really doesn't do a very good job budgeting,” Ball said. “We find out today they really don't do a very good job even spending what they budgeted in last year's budget.”

New Democrat Leader Lorraine Michael was also underwhelmed by the announcement. She said she wasn't surprised by Marshall signalling that he'll be taking a softer approach to Memorial University and the health care system, after the political beating they've taken for the cuts from the budget this past spring.

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(Earlier story)

Finance Minister Tom Marshall had some good news this morning in his update on the state of the province's finances —  the deficit is $113 million lower than expected.

The new forecast deficit is $450 million.

When the provincial government presented its budget last spring, they had a deficit of $563 million, but oil has been a little bit higher than expected, and the Canada-U.S. currency exchange has been working in the province's favour.

Transfer payments from the federal government have also gone up.

The mid-year fiscal update typically sets the tone for the winter pre-budget consultations, and the process of pulling together the budget.

Last spring, the government was sending signals that cost cutting would continue, with the province's health authorities and Memorial University firmly in the crosshairs.

Marshall said that he's still trying to stick to the plan, which calls for major government cuts and a return to surplus in the 2015 budget year.

Revised government numbers indicate that the province's net debt is now at just over $9 billion, a reduction of around $400 million.

Geographic location: Newfoundland, Canada, U.S.

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Recent comments

  • Bruce LEE
    December 02, 2013 - 21:21

    Ok Tom and Kat, so you screwed up your numbers and likely screwed up the layoffs at the sheriffs office. Why don't you try hiring back the people who's lives and families YOU RUINED!! The outfit runs Short Staffed EVERYDAY while WildLife and Conservation has had a GIANT infusion of funds over the last SIX MONTHS!! Someone has to drag the High Sheriff out of the Bell Tower and get some answers from him!! the Fool has been silent for 5 months now, not even a sheriff has seen him, what a Joke!

  • concerned
    December 02, 2013 - 20:27

    a decade of squandered opportunity

  • pensioner
    December 02, 2013 - 18:46

    Well, people are saying it's all lies again. This game is a rerun, remember when Jerome got the numbers mixed up. The deficit seem s to have become an excuse not to do anything positive for the average person. Its all so the rich get richer and the rest get poorer. Why don't they just pay up their portion of pension? The workers had to pay their portions. After all, they mismanaged it, they know that just as we know it. They constantly want workers to work for less than the cost of living increases and then retire to even less. Not much to look forward to, is it! Are those politicians taking less and why aren't they concerned about what their pensions cost this province? We are tired of your same old same old games, nothing for the people but then come election time there's lots of funding to get votes. Could that be behind the latest deficit decrease announcement? Four years should the limit on any party being in power. Can you remember a time when any party did good being elected for a second term? I can't!

  • Pensioner
    December 02, 2013 - 18:36

    Well, people are saying it's all lies again. This game is a rerun, remember when Jerome got the numbers mixed up. The deficit seem s to have become an excuse not to do anything positive for the average person. Its all so the rich get richer and the rest get poorer. Why don't they just pay up their portion of pension? The workers had to pay their portions. After all, they mismanaged it, they know that just as we know it. They constantly want workers to work for less than the cost of living increases and then retire to even less. Not much to look forward to, is it! Are those politicians taking less and why aren't they concerned about what their pensions cost this province? We are tired of your same old same old games, nothing for the people but then come election time there's lots of funding to get votes. Could that be behind the latest deficit decrease announcement? Four years should the limit on any party being in power. Can you remember a time when any party did good being elected for a second term? I can't!

  • Terry
    December 02, 2013 - 18:02

    People, there's nothing to spend, there's still a deficit. Still more bills than cash!

  • Jayne
    December 02, 2013 - 17:43

    Wow! I believe the "blue team" must have hired a new spin doctor for what ails them. And they pulled off this announcement with straight faces. I would be impressed if I wasn't so sickened.

  • Jayne
    December 02, 2013 - 16:49

    Wow! I believe the "blue team" must have hired a new spin doctor for what ails them. And they pulled off this announcement with straight faces. I would be impressed if I wasn't so sickened.

  • david
    December 02, 2013 - 15:25

    So...."more lower". Spin this BS any harder and you'll break a rib.

  • anna
    December 02, 2013 - 13:47

    Maybe they could put some more money into the ER at the Health Science complex . Yesterday, we spent 9 hours with a family member who was in intense pain. When I remarked that this place was like a zoo, the nurse looked at me and said, no there place is like an Afghanistan war zone.

  • anna
    December 02, 2013 - 13:43

    Maybe they could put some more money into the ER at the Health Science complex . Yesterday, we spent 9 hours with a family member who was in intense pain. When I remarked that this place was like a zoo, the nurse looked at me and said, no there place is like an Afghanistan war zone.

  • thomas
    December 02, 2013 - 12:21

    That's a nice chunk of money. A lot of good social programs could be in injected with that. opps forgot - that is almost the exact amount for the Kruger bail out.

  • social activist
    December 02, 2013 - 11:40

    I hope the government offers retirement incentives to public workers this spring to reduce the overall impact of their 2nd yr of a 2 yr attrition program and layoffs. Munn and the hospitals are in for staff reductions this spring and its only the calm before the storm . Hopefully they will get some more workers to retire with extra 12 weeks severance like last spring. It will save younger workers from layoffs and achieve savings at the same time.

  • Cyril Rogers
    December 02, 2013 - 11:03

    Cancel the Muskrat Falls project and you would not be running a current account deficit. This incompetent administration is on the verge of finalizing a deal that grows more corrupt by the day but they blindly stay the course. There is something to be said for persistence but not when you are not only destroying yourself but others as well. The oil revenues are not going to improve dramatically in the near term, if ever, ...... they need to get over their delusions and wake up to a completely different set of realities........ 4 years removed from the initial announcement about building the Muskrat Falls project.

  • Lilly
    December 02, 2013 - 11:02

    I guess all them people didn't have to lose their jobs after all....

  • david
    December 02, 2013 - 11:01

    Stop listening toi this garbage for one second.... We HAVE a deficit. Not to mention an enormous provincial debt. In case you can't get your mind focused on this information, here's a clue: when would you believe would be a good time to start paying down the old credit card instead of just running it up even more on an increased credit limit?

    • Jane
      December 02, 2013 - 12:21

      Deficit it was the provincial PCs that caused this deficit, they took our tax money, oil royalties and squandered it. They are responsible for the debt. Now we all pay for this incompetence and also having to put up with financial forecasts of dire deficits only to have them state in December its not as bad as projected. Give us a break, political games that's all it us. Oh by the way Kathy Dunderdale popularity is down in the polls right now and the ruling PCS face the electorate in 21 months. What do you expect Tom Marshall to say the deficit is growing. Sick of this type of politics. Personally, I place all the deficit business on the premiers shoulders and if they balanced the deficit tomorrow I would still not Vote for the PC party. Their time is over..... By the way think about Muskrat falls and you may understand why we are in deficit. Say no to the PC party they caused this. David stop picking up for the PCs... You know they are responsible.

    • Dolf
      December 02, 2013 - 14:17

      Jane, We've gone thru this scenario ever since the PC's came to power. About time they hired somebody in Finance who knows his/her sums.

    • Dolf
      December 02, 2013 - 14:21

      Jane, We've gone thru this scenario ever since the PC's came to power. About time they hired somebody in Finance who knows his/her sums.

    • david
      December 02, 2013 - 14:28

      Are you lost? You seem lost.