The latest budget from the Susan Holt government reveals plans to increase the province’s debt by six billion dollars over the next three years. Despite warnings of tough decisions ahead, the budget aims to spread those choices out over a longer period. Premier Holt emphasized the necessity of difficult decisions to address the record-high deficit of $1.37 billion at the end of the fiscal year.
Contrary to initial promises to balance the budget over four years, the government now anticipates running deficits throughout the remainder of its term. The projected net debt is set to rise from $13.9 billion to $19.7 billion, leading to an approximately eight percent increase in the net debt to GDP ratio by the end of the 2029 fiscal year.
Economist Richard Saillant expresses concerns that this debt escalation could impact the province’s credit rating in the future. He criticizes the budget as fiscally irresponsible and unsustainable. Finance Minister René Legacy defends the government’s approach, stating they are in discussions with various groups regarding cost-cutting measures to address the deficit without resorting to widespread program and service cuts.
Opposition voices, such as PC finance critic Don Monahan, question the lack of significant cuts in the budget despite the rhetoric around making tough decisions. Green Party Leader David Coon raises concerns about the government’s proposed trajectory of increasing debt to GDP ratio year after year.
While some departments have seen cuts in expenses, others have received budget increases, with an overall government spending projection of 5.5 percent higher for the year. The health care sector receives the largest investment in the budget, with a 17.4 percent increase compared to the previous year’s allocation.
To address the deficit, the government plans to reduce the civil service size by 12 percent through attrition, implement a toll for non-New Brunswick vehicles near the Nova Scotia border, and undertake various cost-saving measures. Additionally, they aim to generate more revenue by combating contraband tobacco and illegal lobster sales through dedicated enforcement teams. Operating grants to post-secondary schools will be frozen, and the government will review underutilized assets to reduce reliance on external contracts.