The promises made by the government are against a worrying fiscal backdrop. In the December 2025 fiscal update, the provincial deficit was projected to be $948 million, far higher than the $372 million forecast that was provided in the spring 2025 provincial budget. The province’s net debt stands at nearly $20 billion, with a population of approximately 549,000. 

However, there has been an optimistic development. Budget 2025 was crafted on the assumption of brent oil prices being $73 per barrel US, and the December update, awash in red ink, estimated that price to be $66 per barrel US.  Today, according to Business Insider, the price is 83.76 per barrel US.

The government has also been willing to make difficult choices since being sworn in, including the cancellation of a new hospital for which they claim no funds had been allotted by the previous government.  Other capital projects have been scaled back, and TD Economics, in a December 2025 report, noted that “cumulative public capital investment by the year 2028 is slated to be $30 billion lower.”

The throne speech makes clear that economic development, and in particular, oil, will be a focus of the government.  The speech noted, “That is why, after a hiatus, Newfoundland and Labrador is back in the oil business. This will start with a focus on Bay du Nord, which has the potential to kick-start the entire energy sector in the North Atlantic. At a time when global energy security is paramount, Newfoundland and Labrador has the critical energy supplies of the future, including our offshore oil and gas.”

The address also outlined plans for mines and minerals, with the intention of reducing bureaucratic red tape and attract capital. Regarding the Churchill Falls MOU signed by the previous government with the Government of Quebec, the speech stated:

“Today, as we deliver this speech, an Independent Review Committee empowered under Part II of the Public Inquiries Act is examining the existing MOU signed by the previous government with the Government of Quebec. Our government will not prejudge the conclusions of that independent review. But coming out of that process, our government will be ready to act on what we learn.

When we get this right, not only will our province develop a once-in-a-lifetime resource, but we will also do so with the earned wisdom of hard history and the peace of mind of good government built around trust, transparency, and full facts. All of our resources must be developed with an eye to more local jobs, more local benefits, and more local revenue – always putting Newfoundland and Labrador first. That is how we protect what we have. And that is how we build something better.”

Newfoundland and Labrador, like the other Atlantic provinces, is facing a perfect storm of increased healthcare costs due, in part, to an aging demographic. Oil price volatility makes planning additionally difficult in a jurisdiction where royalties have, in recent years, accounted for 23 percent of the province’s gross domestic product. 

Controlling public spending while emphasizing economic growth will be key to eventually restoring the province to a surplus position and ensuring a competitive tax regime that lets businesses and individuals thrive.