The New Brunswick government is projecting a $837.4 million dollar deficit, the greatest in the past two decades.
According to the Department of Finance and Treasury Board (FTB), revenues are $180.5 million lower than budgeted. Expenses are $105.2 million higher than budgeted.
Nick McCann, the assistant deputy minister for FTB, said revenues are lower due to a reduction in corporate and personal income tax. Expenses are up largely due to operating costs with the regional health authorities and program support from social development. All but three areas were considered over budget.
The Department of Health was over budget by $146.8 million, the Department of Social Development is expected to be over budget by $91.6 million, and the Department of Natural Resources is over budget by $14 million – largely due to cost for fire suppression during wildfire season – and the Department of Justice and Public Safety is over budget by $9.2 million.
It is projected to have a shortfall of $61 million in corporate income tax.
Peter Kiley, the assistant deputy minister of treasury management and fiscal policy, said the other shortfall of note is conditional federal revenue.
“It’s not that the revenue has gone away, it’s that we won’t realize it necessarily this year, it relates largely to either project delays or revised spending intentions within the departments, which also affects the spending side,” he said, speaking with reporters.
The provincial assessment freeze, implemented by the Liberal government as an affordability measure, has resulted in a $7.9 million dollar loss. McCann said there are several projects that have been delayed – which are impacting both sides of the budget.
The Rothesay wastewater project, the Saint Andrews Market Wharf and Market square project, the Mount Allison University library rehabilitation, and the UNB law building all have been delayed and are part of the Integrated Bilateral Agreement – which is a joint funding agreement between the provincial and federal governments.
It is about roughly $88 million dollars in federal funding – leaving out the funding provided by the province and proponent.
In September, the Saint Andrews wharf and Market Square project came in a little more than $2 million dollars over budget, which alongside community criticism over the design, forced the town back to the drawing board.
“Given the amount of economic uncertainty and cost escalations we’ve seen in recent years, those types of projects have caused some delays … looking at their scoping, their timing, because of the cost escalations result in there’s only a finite amount of money they’ve received for their project and for their funding,” said McCann. “If it comes in higher than that, sometimes the proponent may need to adjust and then go back to the drawing board, adjust their plans, and then come back forward again.”
Saint Andrews council will be getting an assessment for the wharf’s structural integrity for about $99,000 before proceeding any further with a refurbishment.
Meanwhile, Finance Minister Rene Legacy did not rule out the continued escalation of the deficit, which is near $1 billion.
“So, if nothing else changes on revenues or some improvement on expenses, there is a potential that could still grow by the fourth quarter,” adding the deal signed with the New Brunswick Medical Society for physician compensation would have an impact as well.
On Nov. 14, the government ratified a deal with the NBMS to ensure “New Brunswick is competitive competitive with other provinces in terms of physician recruitment and retention while improving access to primary care.”
A statement from the NBMS said the 2025-2029 Service Agreement is an investment of $270 million. The agreement is retroactive to April 1, 2025.
During the election, the Holt government said it would balance the budget, but has been unable to do so as it increases spending in major sectors like health care, education and social development.
Legacy argues the government is working to fix years of under investment. When asked whether New Brunswick is seeing concrete results in the areas the provincial government is trying to improve, Legacy said transformational change will take time to take effect.
He added that he felt the government may have lost some political capital by falling short on its promise to balance the budget.
“But it’s the right decision,” Legacy said, in response to questions from The Courier. “We have to make that move for the good of the province and the future of our economy.”
