Newfoundland and Labrador’s auditor general says the province is spending 50 per cent more per person than the average of all other provincial spending in Canada.
Terry Paddon says the Progressive Conservative government will have to consider increasing revenues, cutting spending, borrowing or all of the above.
The province spent $7.8 billion last year — up 66 per cent from 2003 — as it forecasts a deficit of $726 million this year.
Paddon says losses from falling oil and mineral earnings are in addition to an aging population that will increase demands on public services.
He also flags soaring liabilities for unfunded public pension and health benefits for government retirees.
Premier Kathy Dunderdale has acknowledged that the province must cut spending and find efficiencies as it faces at least two years of forecasted deficits.