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Newfoundland and Labrador's fiscal outlook dims as oil prices, production drops

ST. JOHN'S, N.L. — Newfoundland and Labrador's latest fiscal forecast has taken a dramatic turn for the worse amid slumping oil prices and declining offshore production.

Premier Dwight Ball says his resource-dependent province will be taking immediate steps to deal with a ballooning deficit, which is forecast to grow to $1.96 billion in 2015-16 — an increase of 79 per cent when compared with the original budget prediction.

Ball says the provincial government is restricting all hiring to critical operations, suspending all non-discretionary spending, restricting the use of consultants and discontinuing all non-essential travel.

As well, the government announced yesterday it had hired a consultant to conduct an independent review of the rising costs associated with the Muskrat Falls hydroelectric project in Labrador.

However, Ball stressed that his Liberal government — elected with a majority Nov. 30 — would not be laying off any public servants, though a plan to cut costs through attrition would continue.

The premier said his government will be consulting the province's residents ahead of next spring's budget to get idea about how to cut costs and generate revenue.

The Canadian Press

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