Newfoundland and Labrador's deficit has grown by more than $30 million from the most recent forecast, according to the province's audited financial statements.

The official deficit for 2018-19 is now $552 million — nearly $131 million lower than originally forecast in the 2018 budget, but $30.6 million more than the revised estimate released in April.

Despite the growth in the deficit, Finance Minister Tom Osborne said the province is in better shape today than in 2016 and has met its fiscal targets each year.

"We're actually doing very well, especially if you take out the consumer price index or inflation," Osborne said Thursday.

The government has started a variety of processes that will save money over time, he said, pointing to attrition, reductions in the number of government vehicles, reductions in office space, and digitizing some government services.

The audited financial statements were only slightly off from the original 2018-19 budget numbers, said Osborne, by just half a percent. He added the province is more than meeting its targets to reduce spending.

"Our bond rating agencies tell us that we've exceeded those targets every year in terms of what we've said we were going to do," Osborne said.

"We continue to do that."

Increased spending

However, the statements show that expenses grew slightly, from $8.27 billion to $8.38 billion, primarily because of higher costs associated with increases in benefits, known as actuarial adjustments.

At the same time revenues also increased to $7.83 billion, from $7.75 billion, driven largely by higher revenues from the offshore oil industry.

PC MHA Tony Wakeham says government expenditures continue to be a problem. (CBC)

That higher spending is a problem and it's just luck that revenue is going up to mitigate it somewhat, said Tony Wakeham, Progressive Conservative MHA for Stephenville-Port au Port.

"This is the same government that told us four months ago that they had a plan to turn to surplus in '22-'23 and it included a reduction of $617 million in expenditures," Wakeham said.

"I have not seen, nor have they shown us, how they arrived at that number or how they intend to do it."

Osborne pointed to Muskrat Falls, which he said is responsible for additional borrowing by the province, as part of the reason for the government's debt load and related costs. Muskrat Falls was sanctioned by a previous PC government.

"I'm not going to take lessons from an administration who their legacy was putting our deficit over $2 billion and providing the province with a boondoggle that puts jeopardy to the people of the province in terms of increased borrowing," he said.

Osborne said the province remains committed to returning to surplus, but did not specify a timeline for achieving it.

The outlook for 2019-20, however, is not quite so ominous, thanks to an injection of money from the federal government.

The province is forecasting a $1.9-billion surplus for next year, based on a new $2.5-billion Atlantic Accord deal with Ottawa.

Only $134 million of that cash will actually flow this year, but the province is booking the entire amount, which it said is in line with public sector accounting standards.

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