ST. JOHN’S, N.L. – Newfoundland and Labrador’s new Liberal government will deliver its first throne speech today as it tries to navigate a sea of red ink.
The province recently had its credit rating downgraded as low oil prices drive up an unprecedented deficit that could top $2 billion.
It relies on offshore oil for about one-third of government revenues, and was hit hard as prices dropped by more than half over the last 20 months.
Today, Brent crude is trading for about US$41 a barrel, down from $115 in mid-2014.
Premier Dwight Ball promised during the fall election campaign to avoid an HST hike and public-sector job cuts.
But political scientist Kelly Blidook of Memorial University of Newfoundland says the government must raise cash and cut spending to avoid fiscal “disaster.”