Volume I - Finance - Government of Newfoundland and Labrador

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26 UNDERSTANDING THE FINANCIAL HEALTH OF THE PROVINCE OF NEWFOUNDLAND AND LABRADOR 24 Percentage 16 15.8 14.9 12.4 15.4 13.2 8 0 2006 2007 2008 2009 2010 b) Federal Transfers as a Percentage of Provincial Revenues • This ratio measures the extent to which the Province increases its own revenues from within the Province as compared to the extent it receives funds from the Federal Government. • As indicated in the following graph, with the exception of 2009, federal transfers as a percentage of provincial revenues have been declining since 2006. The increase in 2009 was primarily due to recognition of the remaining unearned balance of the Atlantic Accord 2005. While this trend indicates that the Province is becoming more self-reliant, the fiscal policy decisions of the Federal Government continue to have an impact on the Province’s financial position. • The 2010 ratio of federal transfers as a percentage of revenue generated from provincial sources has decreased to 26.9% which is less than the five-year average of 39.9%. This indicates the Province’s historically heavy dependance on funding from the Federal Government is gradually being reduced. 60 50 51.1 46.1 42.1 Percentage 40 30 20 33.4 26.9 10 0 2006 2007 2008 2009 2010
UNDERSTANDING THE FINANCIAL HEALTH OF THE PROVINCE OF NEWFOUNDLAND AND LABRADOR 27 c) Offshore Royalties as a Percentage of Provincial Revenues • This ratio measures the Province’s offshore royalty revenues in relation to total provincial revenues. It reveals the degree to which the Province relies on revenues from offshore royalties as a source of funding. • As indicated in the following graph, offshore royalties as a percentage of provincial revenues have increased significantly since 2006 even with a decrease of 3.3% between 2006 and 2007. This indicates that the Province continues to rely more on offshore royalties for revenues. • For the past five years, the average ratio of offshore royalties to provincial revenues is 26.5%. In 2010, the ratio is 36.9%, significantly greater than the five year average. While this ratio is consistent with 2009, overall the Province is increasingly more dependent on revenues from offshore royalties; a revenue source which is subject to the volatility of market factors such as the price of oil. 40 32.8 36.9 36.9 32 Percentage 24 16 14.5 11.2 8 0 2006 2007 2008 2009 2010 FINANCIAL PERFORMANCE As presented in this report, the Province reported a deficit after four consecutive consolidated surpluses. The deficit was however, substantially lower than originally budgeted. The recent surpluses along with investments in the Province’s economy and improved oil prices have better positioned the Province to weather the global recession and minimize its impacts on the Province’s financial situation. The Province continues to face challenges to reduce the level of debt and while additional stimulus spending is necessary, the government must strive to maintain sustainable levels of spending.
Page 1 and 2: Province of Newfoundland and Labrad
Page 5 and 6: i Table of Contents Page No. INTROD
Page 7 and 8: 1 INTRODUCTION Volume I of the Publ
Page 9 and 10: UNDERSTANDING THE FINANCIAL HEALTH
Page 31: UNDERSTANDING THE FINANCIAL HEALTH
Page 37 and 38: Government of Newfoundland and Labr
Page 39 and 40: OFFICE OF THE AUDITOR GENERAL St. J
Page 41 and 42: SUMMARY FINANCIAL STATEMENTS PROVIN
Page 47 and 48: SUMMARY FINANCIAL STATEMENTS 41 NOT
Page 61 and 62: SUMMARY FINANCIAL STATEMENTS 55 LOA
Page 71 and 72: SUMMARY FINANCIAL STATEMENTS 65 TAN
Page 81: SUMMARY FINANCIAL STATEMENTS 75 GOV

Volume I - Finance - Government of Newfoundland and Labrador

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