N.B. government projects $668.7M, about $120M more than budgeted

The New Brunswick government says the projected deficit for 2025-2026 is now $668.7 million.

The New Brunswick government’s spending deficit for the 2025-26 fiscal year is now projected to be nearly $120 million more than what was budgeted five months ago.

A revised deficit of $668.7 million was announced on Tuesday, compared to a deficit of $549 million detailed in the March budget.

“All provinces are grappling with the same deficit challenges, and trying to balance spending pressures, an aging population, aging infrastructure, a reduction in immigration targets, and the ever-changing global trade landscape,” said Finance Minister René Legacy during a news conference in Fredericton. “Obviously, in the last nine months, the last year, things have changed, the revenues aren’t coming in like they were the last six years.”

Total revenue is now projected to be $59.6 million lower than budgeted, with total expenses $60 million higher than budgeted.

• Read the first-quarter results

Legacy said the revenue shortfall is due to a reduction in federal conditional grants, with higher expenses resulting from increased spending in the departments of health and social development.

“Everybody is aware that we can’t continue with this growth in expenses,” said Landry. “We need to find different ways of doing things. There’s just not the ability of the province to sustain it at this rate.”

The province’s net debt is projected at $13.6 billion.

“Our net debt-to-GDP ratio remains one of the lowest in the country, which will remain a focus as we continue our fiscal plan,” said Landry.

Green Party Leader David Coon said the initial projects were included in a “false budget” because of government attempts to “minimize some of their budget lines.”

“They simply set the budget this year at the level the budget was set last year, rather than reflecting what was actually spent last year in those areas where you can’t cut corners, like child welfare,” said Coon, adding that he wasn’t concerned at this time with the deepening deficit.

“We can handle this right now,” said Coon. “What I’m concerned about is the longer term because the government is really lacking the vision needed to develop our economy, to lower poverty, and fundamentally address our health-care problems.”

Tuesday’s fiscal update is taking provincial coffers further away from a Liberal campaign promise for balanced budgets through its mandate. In March, the Liberal budget revealed projected spending deficits in each year of its mandate.

Landry didn’t provide a timeline on Tuesday for when a provincial budget surplus might return, except to say “as soon as possible.”

“We’re not just going out there and putting out money and thinking deficits are acceptable,” said Landry. “We are trying to get back to surplus.”

The official opposition said the absence of any timeline for balanced budgets or surpluses was unacceptable, since it was a major campaign pledge.

“I’m certain a lot of people voted for them based on the fiscal responsibility that they have put forward.” said Progressive Conservative MLA Don Monahan. “This was a huge promise. It’s not just something that you wave off and say ‘we’ll try to do better next time.’”

Trade war, wildfires, future fiscal updates

Landry said the province’s $50 million contingency fund to provide support during the U.S. trade war had only been dipped into one time during the first quarter, providing $186,000 for an earlier start to Campobello Island’s ferry service.

“We should have a better picture about the impact that tariffs and trade will have on our projections as we progress into the second and third quarters,” said Landry. “However, we are hearing from industry that the economic uncertainty and unstable trade conditions are causing additional stressors, and they must find ways to counter those impacts.”

Landry said the province would maintain its trade war contingency fund, adding that he also expected the province’s current wildfire situation to have an impact on future fiscal updates.

“Hopefully it is as little as possible, and there are no impacts to communities or infrastructure that we need,” said Landry. “From NB Power’s standpoint, there is some transmission equipment that has been impacted, so there will be some costs on that aspect. We’re not going to know until we can get into the forest to see the full impact of that.”

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