A $400 million drop in provincial tax revenue has pushed the forecast deficit to $806 million, according to the 2016-17 Mid-Year Financial Report released today by Finance Minister Kevin Doherty.
“Continued low oil and potash prices are having a greater impact on revenue than expected,” Doherty said. “It has now been two full years since the oil price started to drop in the fall of 2014, and we are seeing a much greater effect on corporate and personal income tax and the Provincial Sales Tax.
“To start moving the provincial budget back to balance, significant restraint measures are needed. Measures will be implemented now, with more to follow in next year’s budget.”
In total, $217 million of in-year restraint measures and savings being undertaken across government, including Crown corporations, are reflected in the mid-year forecast.
A hiring freeze has been implemented with only hiring for positions considered essential. The government is also committed to holding the line on labour costs across all sectors of the public service.