How do they run things? Budget Lead-Up #nlpoli

Finance minister Charlene Johnson will read the new provincial budget speech on Thursday.

In keeping with the provincial Conservative tradition, though, they’ve been announcing bits and pieces of the budget already.  On Monday, for example, justice minister Darin King announced that the new budget would contain money for 20 new sheriff’s officer to provide court security and new lawyers and staff for the legal aid division. 

Both news releases specifically indicated that the money was from Budget 2014, that is, money that isn’t supposed to be announced until Thursday.  Reporters asked King if the finance minister would have money for these announcements.

If the next two years are bad… #nlpoli

[Stick to your Lane Update:  See bottom]

No surprise that on the day after natural resources minister Jerome Kennedy talked about looming deficits of pre-1934 proportions that the ruling Conservatives did two things.

First, backbencher Paul Lane reinterpreted Kennedy’s comments on VOCM Open Line with Randy Simms.  There will only be big deficits, says Lane, if we don’t do anything about it. 

Second, Jerome Kennedy didn’t tell the people at his first pre-budget “consultation” anything of what he planned to do over the next few years. 

September oil royalties 60% below budget forecast average

High prices and better royalty rates on Hibernia didn’t offset oil production declines in September for the Newfoundland and Labrador offshore.

According to figures released to Bond Papers by Natural Resources Canada, Newfoundland and Labrador’s oil royalties for September were $40, 290, 252.18. 

That’s only 40% of the $105 million monthly average needed to meet projections in the spring budget. The provincial government  forecast oil royalties of $1.262 billion for Fiscal 2009, or about $105 million per month.

As reported in November,  figures obtained from Natural Resources Canada showed provincial oil royalties were down almost 60% [on average] so far in 2009 compared to 2008 and were running [on average] 15% below provincial budget forecasts released in March of 2009. [In September alone, revenues dropped to 40% of the average needed to meet 2009 budget projections]

Oil production is down about 29% from last year. September oil production from Hibernia, Terra Nova and White Rose totalled 6,164, 839 barrels of light crude according to the offshore regulatory board.  October production was slightly more than 6.9 million barrels, about the same as May 2009 and continuing the trend thus far for the new year.

If those trends continue for the rest of the fiscal year, oil royalties for 2009 will come in at less than $1.0 billion. Without cuts to spending or increased revenue from other sources, the provincial government will have a hard time not to exceed its record forecast deficit of $1.3 billion on a cash basis.

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[Words and a sentence added for clarity]