In a letter dated March 20 describing the province’s extreme difficulties, Ball told the Premier that the province would not be able to pay its bills without the immediate help of the federal government.
“As discussions on changes to the financial stabilization program point out, the province never fully recovered from the economic downturn in 2015-16 when royalty revenues declined by more than $ 1 billion,” writes the Prime Minister Ball.
“To put it bluntly, our recent attempts to finalize our short and long term borrowing program have failed. We have no other recourse to raise the funds necessary to maintain government operations, “he added.
“Our province is running out of time.”
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READ MORE: (April 1, 2020) 23 new cases of COVID-19 reported in Newfoundland and Labrador
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At a COVID-19 briefing, Ball told reporters that the letter was necessary.
“It’s just about expressing where we as a province, where I see it, and the need for the federal government to view Newfoundland and Labrador as a single province,” he said. .
Last week, the Bank of Canada granted debt relief, buying debt from the provinces, allowing the provincial government to hold an emergency session of the House of Assembly and borrow $ 2 billion.
Kyle Hanniman, professor at Queens University, specializing in political economy, credits the Bank of Canada. “Missing pay and other spending commitments are a problem regardless of the context. But it is particularly problematic today, where the key to combating COVID-19 and the economic fallout is to circulate liquidity and credits. “
READ MORE: (December 22, 2019) N.L. Prime Minister calls for confidence in looming financial challenges
Even before COVID-19, the public finances of Newfoundland and Labrador were in trouble. It had the highest operating deficit and overall debt in Canada, per capita.
The fallout from the pandemic continues. The Come By Chance oil refinery, which processes up to 130,000 barrels per day, stops production. Oil prices fell, plunging the market for kerosene and propane, two of the main products of the refinery.
“It will take about 5 days to close it safely,” wrote United Steelworkers Glenn Nolan in a Facebook message to members. “It will be in standby mode. It could be 2 months, up to 5 months. “
Nolan added that the top priority of the union is to keep its members safe. The union declined further comments.
Premier Ball says his province’s “economic crisis” is far from over and will require much more financial assistance after Canada leaves the pandemic.
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