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When the government of Newfoundland and Labrador assumed office in late 2015, it declared that the expected deficit for the current fiscal year would be almost double that which was budgeted for by the predecessor government. The new government then adopted a very aggressive fiscal-policy stance in its first budget, tabled in April 2016. However, following the finance minister's resignation in July 2017, the government seemed to dramatically change its strategy, adopting a passive policy response to the worsening deficit situation. While in subsequent years Newfoundland and Labrador's annual deficit has fallen, its net and gross debt per capita have ballooned and reached new heights relative to Canada's other provinces. This article presents an in-depth investigation of this expansion and examines the probabilities of success, in the medium and long term, of the government's current fiscal strategy as a response to its deepening debt problem.

Policy Forum: Newfoundland and Labrador's Debt Strategy—Waiting for a Saviour or Godot?