Surging oil prices to help N.L.'s bottom line

One of the world’s largest credit rating agencies says surging global energy prices related to the Iran war could help tackle the deficit in Newfoundland and Labrador.

DBRS Morningstar says the province’s recent budget — with a deficit of $688 million — is based on an oil price of US$79 per barrel.

The price has been hovering around US$110 for weeks and the government estimates that every extra dollar is worth about C$33 million in revenue for the province.

Regulators say Newfoundland and Labrador produced nine million barrels of oil in March, about 14 per cent more than the same time last year.

That oil had a total value of about $1.3 billion, up almost 55 per cent, year-over-year.

DBRS says Premier Tony Wakeham’s first budget also doesn’t include any potential upside from the memorandum of understanding between the province and Quebec that includes an increased price for power generated by the Churchill Falls hydroelectric plant in Labrador.

The two governments have not yet ratified the agreement.

“Budget 2026-27 reiterates the PC Party’s campaign priorities but presents a fiscal plan with ongoing deficits and rising debt,” Travis Shaw, a senior vice-president at DBRS, said in a statement.

“However, Newfoundland’s exposure to global commodity prices presents material fiscal upside.”

This report by The Canadian Press was first published March 3, 2026.