N.B. finance minister says Tuesday's budget will include 11th straight deficit

New Brunswick Finance Minister Cathy Rogers addresses media after officially releasing the 2017-2018 provincial budget in Fredericton, N.B., on Tuesday, February 7, 2017. (THE CANADIAN PRESS/James West)

FREDERICTON -- After a decade of deficits, New Brunswick's Liberal finance minister says the government will produce more red ink when she delivers the provincial budget Tuesday.

"We will continue with a deficit. We have identified some challenges and we will face these challenges head-on with investments," Cathy Rogers said Monday.

In a series of announcements and government leaks, the Gallant government has already said the budget will see more than one-and-a-quarter billion dollars spent on the Department of Education and Early Childhood Development -- an increase of 6.1 per cent over last year.

Last week, Premier Brian Gallant announced that $25 million will be spent in an effort to boost the number of young people working in the province.

And during his state-of-the province address, he said the budget would include a $20-million economic competitiveness package.

Rogers said there will also be record spending in tourism.

"We have beautiful sites around our province that we need to brand better, market better and make sure that even New Brunswickers are aware of the treasures in our own backyard," she said.

But Charles Lammam, director of fiscal studies for the Fraser Institute, said it's time New Brunswick cuts spending and starts to address a net debt of $14 billion.

"When measured as a share of the provincial economy, New Brunswick currently stands as one of the most indebted provinces in all of Canada," he said.

"Because of the slow growth in the economy, coupled with an aging population and persistent imbalances between revenues and spending, what we have seen is the province run nine consecutive deficits with really no end in sight."

Lammam said the government is just punting its problems and tough decisions to the future and strapping taxpayers with greater interest payments just to service the debt.

But Rogers disagreed: "We're not punting our problems down the road, instead what we're really doing is we're investing today for long-term benefit. We see where some challenges are needing some urgent attention and some short-term investments."

Lammam said the government has few choices to increase revenues because taxes are already high.

"The top marginal tax rate for personal income in the province now is 53.3 per cent. This is one of the highest tax rates, not just within Canada, but within the developed world," he said.

Progressive Conservative member Jeff Carr says the Liberal government has taken $1 billion in new tax revenue since taking office in 2014, and still can't balance the budget.

"A balanced budget and a surplus to go towards the debt is what's needed. When you take an extra billion dollars of revenue out of the economy and still have a deficit, I think that's quite irresponsible," he said.

"Even a fifth grader could balance the budget with a billion extra dollars in tax revenues. It's going to reach a crisis," he said.

New Brunswick has not produced a surplus since the 2007-2008 budget year, and last week released the third-quarter report for 2017-2018 showing a projected deficit of $115.2 million.