N.L. expects $70-million windfall from surging oil prices, hikes supports for seniors

Siobhan Coady told reporters in St. John's, N.L., Tuesday the figure is an estimate as the government is finalizing its budget for the 2022-2023 fiscal year to be tabled on April 7. THE CANADIAN PRESS/Paul Daly

ST. JOHN'S, N.L. -

Newfoundland and Labrador's finance minister says her department expects about $70 million more oil revenue than forecast this fiscal year, and some of the cash will be used to help vulnerable residents cope with soaring fuel and food costs.

Siobhan Coady announced a five-point plan Tuesday totalling about $22.2 million and aimed mostly at seniors and low-income residents.

"The war in Ukraine, the global pandemic, have resulted in higher oil prices, increased food prices and a rising cost of living," Coady told reporters in St. John's.

The plan includes a 10 per cent increase to the province's seniors' benefit and to its income supplement. Both are refundable tax credits paid in quarterly instalments.

Coady also announced a one-time payment of $200 for single individuals receiving income support, and $400 for families on the program. A single person in Newfoundland and Labrador on income support received about $11,678 in 2020, according to the Maytree Foundation, an anti-poverty non-profit group based in Toronto.

Environment Minister Bernard Davis joined Coady to announce rebates for residents purchasing electric vehicles and for those who switch from oil home heating to electric.

Like other Canadian jurisdictions, Newfoundland and Labrador has seen record-high fuel costs as Russia's invasion of Ukraine sends oil prices skyward. While the prices have been hard on residents, Coady said they'll translate to a windfall of roughly $70 million in royalties from the province's offshore oil sector in the current fiscal year.

She reminded reporters the figure is just an estimate as the government is finalizing its next budget to be tabled on April 7.

Last year's budget relied on an oil price estimate of US$64 per barrel -- which was raised to $74 per barrel in a November update -- to calculate oil revenue, she said. But as of Sunday, oil was priced at over $109 a barrel, though the price has dropped over the past two days, falling below $95 a barrel earlier Tuesday.

Coady said the extra money would be used to pay for the programs announced Tuesday and to help reduce the province's deficit, which in November sat at about $595 million for the 2021-22 fiscal year.

This report by The Canadian Press was first published March 15, 2022.