Newfoundland and Labrador Premier Kathy Dunderdale speaks to the media on the news that the Labrador Innu have reached a financial settlement with the federal government regarding land claims, in St.John's on Monday, March 21, 2011.
Premier Kathy Dunderdale says the government of Newfoundland and Labrador must rein in public spending as years of fiscal surpluses give way to predicted deficits.
Ms. Dunderdale told the St. John's Board of Trade on Tuesday that her government must balance fiscal discipline with debt reduction and prudent program spending.
She said tax increases are not the way to go but the growth of the public service must stop as ways to increase efficiency are sought.
Ms. Dunderdale said growing health care costs are also unsustainable.
The board has called on the government to cut debt and control spending while recruiting skilled workers and diversifying the economy.
The province relies on offshore oil for one-third of its revenues.
Economists have urged the province to prepare for the time when oil reserves run out.
Ms. Dunderdale is banking on the proposed $6.2-billion Muskrat Falls hydroelectric project as a renewable source of power and profit for the future.
The province will present its next budget this spring.
Ms. Dunderdale said she wants to bring down per capita debt to the national average within 10 years. The provincial debt is estimated at about $7.7 billion this year, down from a high of $12 billion eight years ago.