The Honourable Siobhan Coady, Deputy Premier, Minister of Finance, and President of the Treasury Board, tabled Newfoundland and Labrador’s 2025 budget on April 9, 2025.

Summary/Political Context

On Wednesday, April 9, Finance Minister Siobhan Coady tabled Budget 2025: Smarter, Stronger Better which focuses on helping Newfoundlanders and Labradorians with affordability, improving access to housing, education, and how and where health care is provided. The budget projects a deficit of $372-million and revenues of $10.7-billion- the highest in the province’s history. These revenues are from royalties from the four offshore oilfields off the province’s east coast.

Budget 2025 does not include any new provincial taxes or any tax or fee increases. The Newfoundland and Labrador government could have forced a balanced budget but is delaying its plan to balance the books for another year to prioritize tax cut reliefs and affordability measures introduced in previous years, including:

• Elimination of the retail sales tax on home insurance
• A 50% reduction in the provincial fuel tax, resulting in savings of 8.05 cents per litre on purchases of gasoline and diesel (including harmonized sales tax)

This budget is about staying the course in uncertain times.

Themes

Tariffs

Budget 2025 projects a deficit of $372 million, but that figure that could rise if the province utilizes its $200 million contingency fund set aside to address Trump-related turmoil, which was announced during the House of Assembly’s spring session earlier this year.  As the province navigates uncertainty from decisions made south of the border, Finance Minister Siobhan Coady said it was not the right time for the province to tighten its fist on spending.

Health Care

The 2025-26 budget allocates $4.45 billion to health care, accounting for about 40% of total spending. This represents an 8.5% increase in health spending over the 2024-25 budget, but just 2.2% more than the revised estimates for that year noted in today’s budget. The priorities emphasize improved service delivery through digital health and infrastructural expansions. To strengthen economic development, $35 million will support recruitment and retention efforts in the province, including research, development, commercialization, investment attraction and business growth strategies.

Transportation and Infrastructure

This budget allocates a significant portion to transportation, with a focus on both highway infrastructure and public transit, including $340 million for new paving, brush clearing, culverts, and bridges on provincial highways. Additionally, the budget supports the operation of the inter-provincial ferry system with $90.6 million. 

Budget 2025-26 also included record investments in terms of the province’s infrastructure, including $3 million for the redevelopment of the Janeway Children’s Hospital to relocate women’s health services from the Health Sciences Centre (HSC) to create additional bed capacity at HSC.

Education

Newfoundland and Labrador’s education system is getting a $44-million boost under its 2025-26 provincial budget. With that money, Education Minister Krista Lynn Howell said the province plans to hire 400 educators and learning assistants in the K-12 system. The government will continue to fund school lunch programs with an investment of $42 million. Following repeated calls from Memorial University students to increase funding and repair a crumbling infrastructure, the provincial government has responded with an investment of more than $400 million.

Fiscal Projections/Economic Outlook

In 2025, total spending is forecast to be $11 billion, with a projected deficit of $372 million.

The deficit, combined with capital spending, means the province will see an increase in net debt (total assets minus financial liabilities), topping $19.4 billion or $35,615 per person, which is the highest level in Canada. Debt also continues to increase as a share of the economy, from 44.4 per cent last year to 44.8 per cent, also the highest in Canada.

Newfoundland and Labrador is expected to lead real GDP growth among all Canadian provinces with a forecasted increase of 4.4 per cent, primarily due to increased oil and mineral production. Coady’s budget promises an end to deficits by the next fiscal year — if revenues increase and spending decreases slightly. 

At almost 45%, the government’s debt-to-GDP ratio is still the highest among the provinces.  According to TD’s 2025 Newfoundland and Labrador Budget: One More Year in Deficit, “The government’s 2025 GDP forecast may be on the optimistic side given the worsening global trade backdrop, but a healthy contingency fund could spare the province from diving deeper into the red ink.”

The team at Diplomat Consulting looks forward to the opportunity to work with you and your business to assess opportunities for alignment with government objectives, as well as support you in understanding any political risk, please contact Diplomat Consulting at: hello@diplomatconsulting.com.

Naomi Mison

Public Relations Director