New Brunswick’s expected budget surplus has ballooned by five times, to almost $200 million, according to the Progressive Conservative government’s first-quarter results.
Based on the first three months of the fiscal year that began in April, the latest estimate is up from a $40-million surplus when the budget was released March 21.
The news repeats a well-established pattern with the Higgs government over the last five years: Budget predictions have consistently underestimated the amount of revenue coming in and how much spending would be restrained.
The opposition Liberals and Greens said it showed the government had no heart.
At a news conference Monday, Finance Minister Ernie Steeves called the results encouraging, saying he would much rather see results getting better than worse. In the previous decade, New Brunswick had year after year of high deficits and swelling debt.
The minister also defended officials in his department for being off-target: Based on a $12-billion budget, the original forecast was wrong by less than two per cent.
“We are investing heavily in housing, we’re investing in health care,” Steeves told reporters. “We’re investing in tax cuts. We’re investing in property tax cuts. And we’ve been lowering the debt. Those are all things that we really want to continue doing. Those have been some of the highlights of my first five years in this job as finance minister.”
However, he also stressed that his government took great pride in its cautionary budgeting, ensuring future generations wouldn’t be burdened with bad financial decisions, and warned that a future economic downturn or higher interest rates could deteriorate the province’s fiscal position.
Liberal finance critic René Legacy slammed the Tory government for coming up with the same old excuses for being stingy.
“This government isn’t prepared to put some finances into helping New Brunswickers,” he told reporters in a virtual news conference. “Why wouldn’t cabinet have a discussion in the spring and say, ‘if we are over the $40 million, or we do significantly better after the first quarter, what could we spend it on?’
“What we’re hearing is, ‘We’ll discuss it in the months to come’. This isn’t new. This has been since they got elected.”
Kevin Arseneau, the Green finance critic and MLA for Kent North, said given the growing population, far more spending was needed on public services.
He cited health care and education as two top priorities, along with housing.
“The housing crisis, I see it day in and day out in my riding, and I know a lot of my colleagues from the legislative assembly, and not just from my parties, all parties, are seeing this, people coming into their office on riding day. Today was riding day and, like every Monday, we get housing issues.”
A farmer, Arseneau also cited the risk of New Brunswick not being able to produce its own food, and the fact that in the latest census data, the province had lost one-fifth of its farms over five years, with less than seven per cent of farmers under 35.
“We’ve had no significant investment in agriculture in 40 or 50 years.”
Premier Blaine Higgs has consistently said he wants New Brunswick to be on more sound financial footing and a more desirable place to live for workers who don’t want to be heavily taxed. He also says he wants evidence that more spending leads to better results.
According to the province’s latest figures, revenue is projected to be $151 million higher than budgeted, while total expenses are projected to be lower than budgeted by $8 million.
Net debt is decreasing and projected at $11.7 billion for this fiscal year. New Brunswick has the lowest projected net debt per capita east of Saskatchewan, a huge turnaround from a few years ago when it had the second worst debt in the country.
The department projects economic growth of one per cent in 2023, lower than the average among private sector forecasts of 1.2 per cent.
On the revenue side, which saw the biggest improvement, the province is expecting more conditional grants from Ottawa, from both labour force agreements and disaster financial assistance, more sales tax through HST returns, and higher personal income taxes.
Officials from the finance department said much of the data wouldn’t be confirmed until it gets better figures from the federal government in the second and third quarters, but they also said the economy had performed better than expected, driving up revenues.
John Chilibeck, Local Journalism Initiative Reporter, The Daily Gleaner