Today, the Honourable Siobhan Coady, Deputy Premier and Minister of Finance, released Budget 2025: Smarter. Stronger. Better.
For the fourth consecutive budget, the Provincial Government is ensuring no increases and continued decreases in taxes and fees, while investing in education for teaching services and technology for the classroom, access to health care and support for seniors.
Similar to the approach taken in other provinces, Budget 2025 also allows for a contingency of $200 million to provide the flexibility to address economic and worker impacts due to the uncertainty of U.S. tariffs, associated counter tariffs and any other unforeseen events that may occur.
Fiscal Overview
- Projected deficit of $372 million for 2025-26, which represents three per cent of revenues.
- Balanced budgets are projected for each year in the multi-year forecast starting in 2026-27. The return to balance is delayed by a year to ensure a focus on affordability and addressing tariffs.
- Projected revenues for 2025-26 are $10.7 billion.
- Projected expenses for 2025-26 are $11.0 billion.
- Of the $11.0 billion in expenses, $677 million is 100 per cent federally funded.
- Net debt is expected to be $19.4 billion in the 2025-26 fiscal year.
- The projected borrowing requirement for 2025-26 is $4.1 billion and will be used mainly for infrastructure which is an investment in the province’s development, and increased liquidity.
- For fiscal year 2025-26, oil price projections are $US73 per barrel, while the Canada-United States exchange rate is forecast at 0.697 cents. These projections are informed by 11 Brent oil price forecasts and eight exchange rate forecasts.
- Oil royalties in 2025-26 are expected to represent 15 per cent of overall revenues compared to 32 per cent in 2011-12.
Economic Outlook
- Various tariffs have been placed on Canadian goods entering the United States and China. The impacts of these tariffs have been broadly captured in the economic forecast.
- In 2025, Newfoundland and Labrador is expected to lead real GDP growth among all Canadian provinces with a forecasted increase of 4.4 per cent, primarily due to increased oil and mineral production.
- Capital investment is forecast to accelerate in the medium term, driven by construction activity associated with wind-hydrogen projects, the Bay du Nord deepwater oil project, and Upper Churchill-related construction activity.
- Retail sales are forecast to increase by 2.0 per cent in 2025.
- Population is forecast to rise by 0.2 per cent in 2025, with net natural losses being more than offset by international and interprovincial in-migration.
- Total employment is forecast to decline by 1.2 per cent in 2025, primarily due to the effects of United States tariffs on the Canadian and local economy.
- The unemployment rate is expected to be 10.8 per cent.
- The rate of consumer inflation is expected to increase to 2.5 per cent, mainly due to Canadian counter-tariffs on the United States driving up consumer prices.
Financial Health of the Province
- Decreased the provincial deficit from $1.5 billion in 2020-21 to $372 million estimated in 2025-26.
- Contributing $108 million to the Newfoundland and Labrador Future Fund, bringing the total contributions to $467 million. Cumulative Future Fund contributions to 2029-30 are forecast to be $1.3 billion. This investment will be used for debt repayment and future opportunities.
- During 2024-25, placed first transactions in the European capital market, building upon the launch of the European borrowing program at the London Stock Exchange.
- Strengthened liquidity, so that cash reserves are available to meet obligations.
- Signed an historic Memorandum of Understanding with Québec to terminate and replace the 1969 Upper Churchill Contract, develop Gull Island and expand capacity of the Churchill Falls plant. This will result in more than $225 billion in total revenue to the provincial treasury over the life of the agreements.
More details on Budget 2025 investments and economic projections are available online at gov.nl.ca/Budget2025.
Quote
“As this is my sixth budget, I reflect on how far we have come as a province. We are leading in economic growth among Canadian provinces. We are modernizing provincial services here at home and seeking out new global markets for our products and services – all towards a stronger, smarter, self-sufficient, sustainable province.”
Honourable Siobhan Coady
Deputy Premier and Minister of Finance
-30-
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gov.nl.ca/Budget2025
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2025 04 09
2:05 pm
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