Newfoundland and Labrador budget increases the debt burden on taxpayers
ST. JOHN’S, NL: Canadian Taxpayers Federation Atlantic Director Paige MacPherson is calling on the Newfoundland and Labrador government to offer taxpayers a real plan for debt reduction following the province’s 2019-20 budget release.
The Newfoundland and Labrador government is projecting a $1.9 billion surplus this year due to an influx of federal funding, but the province is projecting a plunge back into deficit for the following two years.
“It’s good to see a balanced budget any time, but this one-year decrease is only a temporary, Band-Aid solution thanks to cash from the Atlantic Accord,” said MacPherson. “Paying down the credit card a little this year while planning to run it back up again isn’t a responsible plan."
Debt interest payments will rise to more than $1 billion this year.
“From 2016 to today, the government’s messaging has gone from crisis to calm, but the numbers show there are still big reasons to worry,” said MacPherson. “Debt interest payments have now exceeded $1 billion per year – more than the province spends on any social department other than health care.”
Provincial spending is increasing by about $153 million.
“The government is increasing spending and failing to acknowledge that its spending problem is contributing the mountain of debt that taxpayers will have to pay,” said MacPherson. “When you’re staring down the barrel of bankruptcy, you can’t continue sprinkling new spending goodies across the province.”
The provincial budget is counting on $3.9 billion in federal funding this year, up from $1.2 billion last year.
“By relying on cash from Ottawa and rosy revenue projections, the government is still increasing the burden on an over-taxed population,” said MacPherson. “It doesn’t matter whether the government is taking from taxpayers’ left pockets or their right, from Ottawa or the province. There is only one taxpayer, and she’s broke.”