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Newfoundland and Labrador’s Fiscal Problems Rooted in Higher-than-average Spending

In this Graphic Intelligence we examine Newfoundland and Labrador’s average program spending relative to other provinces, and find that since the 1990s it has been consistently ahead of even Alberta.

Newfoundland and Labrador’s program spending per capita was not always well above the all-province average as shown in the figure. In the early 1990s, it was at the national average. Starting in the mid-1990s, the province allowed its program spending to grow much faster than did other provinces. In the 2000s, program spending in Newfoundland and Labrador was on average 20.5 percent higher than the provincial average. Newfoundland and Labrador budgets between 2008 and 2011 included projected annual spending increases in excess of 12 percent on average, which materialized slower than budgeted (Robson and Omran 2020). Nonetheless as a result, for the nine years to 2018/19, the gap with spending in other provinces reached 32.3 percent on average. For the last 15 years, spending in Newfoundland and Labrador has in fact exceeded that of Alberta, the richest province in the country.

For more information on the sources of Newfoundland and Labrador’s fiscal troubles and a roadmap forward for the province, read “The Rock in a Hard Place: The Difficult Fiscal Challenges Facing Newfoundland and Labrador” by Don Drummond and Louis Lévesque