N.B. budget deficit mainly due to health-care costs, travel nurse contracts: finance minister

New Brunswick says health-care costs are a main contribution to the projected $398 million deficit.

New Brunswick’s Finance Minister said Thursday a combination of things has caused the budget deficit to soar to nearly $400 million for the current fiscal year.

On Wednesday, the province’s third-quarter fiscal update was announced as being $398.9 million and that deficit is due mainly to health-care costs at the Horizon Health Network and Vitalité Health Network and travel nurse contracts.

Finance Minister René Legacy said the revenue stream did not grow as quickly as it had in the previous years and there were Liberal Party platform promises, like nursing bonuses and an electricity rebate, that factored in.

“That was about $92 million of the $400 million,” said Legacy.

However, the biggest expense that concerns him is the travel nurse contract.

“This has been in a constant, every quarter for almost the last two years,” said Legacy. “I think because we’ve always had high revenue, we had surpluses. It might have masked the fact that it was always there, and it wasn’t being addressed as I guess as forcibly as it should be. But now that we’re in a situation where the revenues have slowed down, we need to address this contract.”

The previous Progressive Conservative government signed contracts with private companies to fill gaps in the long-term care sector.

Legacy said the nursing contracts totalled around $108 million.

“When you think about these contracts, these nursing contracts, $108 million was the number we were given yesterday,” said Legacy. “That is a lot of money to be paying to outside sources.”

In a statement sent Wednesday, Opposition Critic for Finance Don Monahan said the Conservatives are “deeply concerned” by the fiscal update.

“More deficits, more debt, and more financial burden on taxpayers for years to come,” said Monahan.

Monahan said whether it be through increased taxes or hidden costs, taxpayers in the province will have to pay for the Liberal Party’s “reckless fiscal mismanagement.”

Legacy said most of this deficit, aside from the $92 million that his party promised to help New Brunswickers, belongs to the Conservatives.

“The previous government signed this contract with the travel nurse companies and we’re dealing with it now,” said Legacy. “We’ve had about, on this fiscal, we’ve had about two months. There’s still work to be done, but I wouldn’t be throwing too much hay at us for these results. We’re still dealing with what they left us.”

Green Party Leader David Coon said he wasn’t surprised about the deficit.

When campaigning in the fall provincial election, Coon had said, given the needs of New Brunswickers, particularly to address health-care issues, it would likely be necessary to run a deficit.

“We’ve got to fix the system. That’s why throughout the campaign I said we need to make a generational investment in health care and that will likely require a couple of years of deficit budgets,” said Coon. “We’re either committed to fixing the health-care system so that New Brunswickers have access to doctors and nurse practitioners and short wait times on surgeries, or we continue to do this piece meal, patch work of measures that don’t solve problems.”

Coon also pointed out the federal government owes millions of dollars for forcing the harmonized sales tax (HST) holiday on the province.

The Liberals said total revenue is estimated to be around $30 million lower in the budget because of lower revenue lost from the HST.

“That’s over tomorrow on Valentine’s Day and everyone is going to notice their costs going up, the price going up on things like coffee,” said Coon. “We need to get that back from them. We need to get a full, full refund to compensate for the money that was lost.”

The province also announced Wednesday that total expenses are projected to be over budget by close to $410 million.

Legacy warned the provincial government faces tough decisions in the near future because of the results of the last two fiscal quarters and the province is reviewing programs right now.

“Some programs might end,” said Legacy.

New Brunswick Medical Society president Dr. Lise Babin said the deficit for the current fiscal year is driven largely by increasing health-care costs, primarily personnel expenses, at the regional health authorities including the Vitalité Health Network’s travel nurse contract.

“New Brunswick’s health-care system has long been under pressure, and this deficit highlights the urgent need for smart, strategic investments,” said Babin in an email. “Our focus must remain on ensuring that patient needs are met, and that our health-care professionals have the resources and support they need to provide quality care.”

Babin said reducing costs shouldn’t come at the expense of access to care and the patient’s well-being.

A spokesperson for the Vitalité Health Network said questions and interview requests concerning the province’s budget should be directed to the Department of Finance.

CTV News Atlantic reached out to the Horizon Health Network, but did not get a response before deadline.

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