New Brunswick’s deficit for last year was slightly lower than anticipated.
But it still sits at just over $1.3 billion, the highest in the province’s history.
Finance Minister René Legacy provided a fiscal update Friday morning, and said higher-than-expected spending in health care and social development along with lower-than-expected tax revenue are behind a deficit that had been forecast at about $549 million.
Legacy said the government has focused on what matters to New Brunswickers.
“This means investing in health care and to make lives more affordable,” he said.
“We are stabilizing and strengthening our health-care system, funding important services and addressing affordability challenges that many New Brunswickers are dealing with.”
Legacy said New Brunswick has reached the point, though, where people are questioning the cost of the investments the Holt government has made and continues to make.
“We’ve continually said since the beginning that we know we had to right-size some of the services, but we have to modify, we have to transform,” the minister said.
“We have to transform because it’s going to be very hard to maintain this level of spending and to make sure that it’s sustainable.”
Legacy added the transformation means maintaining frontline services and benefits remain available, while making sure the government can afford it.
Commitment to making life more affordable
Premier Susan Holt has made it clear during her mandate that affordability for New Brunswickers is a priority.
Legacy said given the financial situation the government faces, the challenge now is finding the balance between affordability and getting the deficit under control.
“The best affordability measure … is to continue to build our economy and create those jobs that have higher salaries so that people can pay and have a living wage that makes them comfortable,” he said.
“That really is the gold standard of having an impact on affordability.”
Legacy said there’s been no direct discussion about changing tax policy or government fees.
When asked about recent changes to fees across a number of departments, the minister said that was a case of adjusting fees that had not been changed in 25 years.
“It’s more of an adjustment … especially if we’re offering a service and the fee was supposed to offset the cost of the service and there hasn’t been a change and now the deficit has really grown to a spot where we need to adjust the fees,” he said.
Highlights of the fiscal update
- Deficit – $1.3 billion
- Net Debt – $13.9 billion
- Revenue for 2025-26 fiscal year – $13.6 billion
- Expenses for 2025-26 fiscal year – $14.9 billion
- Key areas of spending:
- Health – $5.1 billion
- Education and Training – $3.1 billion
- Social Development – $2.4 billion
- Main sources of revenue:
- Taxes – $6.3 billion
- Fiscal equalization (federal transfer payments) – $3.1 billion
- Other federal transfers – $2.3 billion
