Tax hikes not the fix for N.L. 'spending problem', says finance minister

Newfoundland and Labrador's finance minister admits "government has a spending problem" but fast fixes aren't in the cards.

"The problem wasn't created overnight, it's not going to be fixed overnight," says Tom Osborne.

We don't want to dig any deeper into the pockets of taxpayers in the province.- Tom Osborne

His comments come one day after the province's auditor general released his report on the financial statements of the province for the year ended March 31, 2017.

It painted a not-so-sunny fiscal picture, noting the currentnet debt of $13.6 billion is the highest in the history of the province.

• N.L. auditor general warns unsustainable deficits threaten public services

Terry Paddon also pointed out that there isn't much room to help balance the books by increasing revenue since Newfoundland and Labrador already generates more revenue on a per capita basis than every other province.

Osborne acknowledged that particularavenueislikely tapped out.

"We don't want to dig any deeper into the pockets of taxpayers in the province. We need to fix the spending problem," he told CBC on Wednesday.

Big borrowing

Osborne insisted things have gotten better on the financial front in the last few years.

"When we formed government the projected borrowing was $4.38 million per day just to cover the deficit. We've gotten that down. We're down now to less than $2 million a day," he said.

"It's still not sustainable. The province cannot afford to borrow $2 million a day just to cover the deficit."

Osborne never points the finger directly at the PC Party by name but does reference the time period when that party wasin power.

"If you look at what happened, from 2004 to 2015, the budget just about doubled," he said.

Osborne said it was during those years, whenoil revenue peaked, that the number of provincial public servants soared to 49,000 up from 40,000.

"The province wasn't being managed well," he said.

Uncertainty looms large

In his report, Paddon warned that the government might not get its forecasted surplus in 2022-23, in part because of slumping oil prices.

Osborne concedes that is one of several challenges.

"You know, it's always contingent on the price of a barrel of oil and nobody knows which way the price of a barrel of oil is going to go," he said.

Another issue is that cuts still have to be made. Osborne said government is looking for a balanced approach.

"We're headed in the right direction. The thing is we don't want to shock the economy," he said, stating that consumer confidence is up.

In his report, Paddon raiseda red flag about the cost of delivering services to an aging population spread out across a big province.

"It is going to be challenging to properly manage and to properly govern, there is absolutely no doubt about that," he said.

"There is much work to be done, make no mistake about it there is much work to be done."