Newfoundland and Labrador: Budget 2023 - Huge Revenue Boost Unlocks New Spending, Sets Up Surpluses Later

Newfoundland and Labrador’s 2023 budget projected a return to deficit in the coming fiscal year after the surprise surplus in fiscal year 2022–23 (FY2023). It then expects to return to black ink through FY2028. With the benefit of slightly higher revenues throughout the forecast period, the province increased spending plans over the forecast. But restraint remains part of the plan to sustain balance, with total expenditures expected to decline by 1.3% from FY2025 to FY2028. Despite weakening crude values, capital investment activity is expected to rise by a solid 11% in calendar year 2023. This is among the reasons behind our view that the province will avoid the worst of the coming Canadian economic downturn.