N.L. faces credit risk if deficit isn’t con­trolled: Ball

The Guardian (Charlottetown) - - CANADA -

New­found­land and Labrador’s premier says his prov­ince is fac­ing the risk of a credit down­grade if his govern­ment doesn’t make hard choices to con­trol a bal­loon­ing bud­get deficit.

Dwight Ball an­nounced Tues­day he’ll hold pre-bud­get con­sul­ta­tions to dis­cuss the prov­ince’s pro­jected $1.96 bil­lion deficit for 2015-16, which is 79 per cent higher than the orig­i­nal bud­get pre­dic­tion. The prov­ince also says it’s ex­pect­ing less than half the $1.2 bil­lion in roy­al­ties from oil and gas orig­i­nally pro­jected due to fall­ing prices and pro­duc­tion.

Ball said dur­ing a news con­fer­ence in St. John’s that if the deficit isn’t re­duced, debt ser­vic­ing costs could grow due to down­graded credit rat­ings.

“In an­tic­i­pa­tion of the deficit ... credit agen­cies want us to make sure we have a se­ri­ous fis­cal plan in place. We want to pro­tect our rat­ing be­cause we all know the cost of bor­row­ing will in­crease if the credit rat­ing were changed. Given where we are fi­nan­cially in the prov­ince right now, this is the risk we see fac­ing us.”

Ball was ac­com­pa­nied by Fi­nance Min­is­ter Cathy Ben­nett and Siob­han Coady, the min­is­ter re­spon­si­ble for pub­lic en­gage­ment, dur­ing the an­nounce­ment of the plan for 15 months of pub­lic con­sul­ta­tions which be­gin next Mon­day.

The premier and the min­is­ters said full de­tails of the govern­ment’s deficit re­duc­tion plan will only come in the next bud­get, which won’t ap­pear un­til the fed­eral Lib­eral govern­ment presents its fis­cal plan.

He re­peated a cam­paign com­mit­ment that at­tri­tion will be the “pre­ferred means” of re­duc­ing pub­lic sec­tor pay­roll costs, rather than lay­offs or early re­tire­ment pack­ages. The new govern­ment has al­ready said it is re­strict­ing all hir­ing to crit­i­cal op­er­a­tions, sus­pend­ing all nondis­cre­tionary spend­ing, re­strict­ing the use of con­sul­tants and dis­con­tin­u­ing all non-es­sen­tial travel.

NDP leader Earle McCurdy said the months of con­sul­ta­tion are too long a time pe­riod to work out a plan on how to deal with the prov­ince’s fi­nan­cial sit­u­a­tion.

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