The Canadian Taxpayers Federation is calling on the Wakeham government to pass a law dedicating every dollar of Churchill Falls revenue to paying down Newfoundland and Labrador’s debt.

“Politicians blew the last oil boom and taxpayers are still paying that bill, so the government can’t fritter away the Churchill Falls revenue too,” said Devin Drover, CTF Atlantic Director and General Counsel. “Premier Tony Wakeham needs to pass a law so every dollar of Churchill Falls revenue goes to paying down the debt until the debt is gone.”

The new Churchill Falls agreement with Quebec is worth $273 billion to Newfoundland and Labrador over its life, according to the provincial government. Finance Minister Craig Pardy says the deal will deliver about  $10 billion by 2041. The agreement passed the House of Assembly last week, but negotiators are still working on the binding agreements.

During the last oil boom, government spending grew from $4.97 billion in 2004-05 to $8.97 billion in 2020-21, an 80 per cent increase. When oil prices crashed, the boom money vanished, but the spending and the debt grew.

Pardy has indicated that revenue from the Churchill Falls agreement can address the province’s growing debt.

“Increased revenue is debt you never issue and debt you never issue is interest this province never pays,” Pardy said during debate on the agreement. “That is the quietest benefit of this agreement and it may also be the most durable one.”

Newfoundland and Labrador currently carries a net debt of $20.8 billion, the heaviest debt burden of any province in Canada. Debt interest costs will cost taxpayers nearly $1.2 billion this year. That’s more than $3 million every day.

“Pardy is right and taxpayers need him to make it stick, because a good line in the legislature won’t stop this money from leaking into day-to-day spending,” Drover said. “Newfoundland and Labrador lost the first Churchill Falls deal and the only way to lose the second one is to waste it.”