N.L. tables stay-the-course budget with projected $372M deficit and record spending

Newfoundland and Labrador has tabled a 2025-26 provincial budget that responds to uncertainty from the United States with record spending and record borrowing, while delaying its return to a balanced budget by another year.

The province anticipates a $372-million deficit this coming year to address affordability issues and tariff concerns — a figure that could rise further if the province utilizes an additional $200 million in contingency funds set aside to address Trump-related turmoil.

Finance Minister Siobhan Coady says government could have forced a balanced budget, but decided to prioritize affordability instead.

"It was not the year for us to force going back to balance this year," Coady told reporters. "Every year it is a balance of where we are with the economy."

For the fourth year in a row, there are no new taxes or increases to taxes and fees. The budget continues previous affordability measures, like a cut in the gas tax, but has not introduced many new ones, just months before voters go to the polls.

There is a moderate increase to the seniors benefit, tied to the cost of inflation, which will see an average jump of $46 this year, for 50,000 seniors aged 65 or older.

"There's not a lot of election goodies in this budget," Coady told reporters.

Projected revenues for 2025-26 are $10.7 billion, while projected expenses are a record $11 billion.

Net debt is also at a record level, approaching $20 billion. The province also expects to borrow $4.1 billion for infrastructure and increased liquidity. This money will come from bonds issued in capital markets.

According to Coady, strengthening the province's liquidity ensures cash is available to meet obligations.

Coady said the provincial economy is currently in good shape with gross domestic product, employment, retail sales, and household income reaching historic highs in 2024, but the budget projects decreases in 2025 with employment expected to go down while unemployment increases.

"We're in a decent position," she said.

The budget suggests employment and household income will start to increase again from 2027 to 2029 when Voisey's Bay underground, Churchill Falls, Bay Du Nord, and wind hydrogen projects are expected to enter production.

In her budget speech delivered to the legislature Wednesday afternoon, Coady outlined some of the ways the province has served Newfoundlanders and Labradorians over the last number of years, from its pandemic response to the Churchill Falls agreement to repatriating the remains of Newfoundland's Unknown Solider.

"We must continue to build on this considerable momentum," Coady told the legislature.

With an ongoing trade war between Canada and the United States, Coady is looking ahead, adding that the province "stands in a historic moment."

"In the global economic chaos caused by tariffs and changing alliances, we will be calm, strategic, steadfast, and determined," Coady said. "Always remember that superb sailors are made by turbulent seas."

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