Holt Liberals project $549-million deficit in their first N.B. budget

The Holt Liberal government in New Brunswick is facing significant budget deficits for the foreseeable future. Finance Minister René Legacy has projected a fiscal shortfall of $549 million for the 2025-26 fiscal year, with the possibility of it reaching $599 million if the province taps into a $50 million contingency fund to help businesses and workers affected by U.S. tariffs.

Legacy expressed the challenges of announcing such a large deficit, but emphasized the government’s commitment to addressing the needs of New Brunswickers. Despite Premier Susan Holt’s promise to balance the budget each year of her term, the four-year fiscal plan outlines deficits in every year through 2028-29.

The budget includes $30 million for healthcare to support new collaborative care clinics, a key initiative to improve primary care access. However, overall health spending is only projected to increase by 1.8% in 2025-26 compared to the current year. Economist Richard Saillant noted that the Liberal government is increasing spending at a slower rate than the previous Progressive Conservative government, which benefited from tax windfalls to maintain a surplus.

Legacy highlighted the province’s $2 billion reduction in accumulated debt, allowing flexibility for increased spending. Despite this, the Liberal financial plan is expected to erase the debt reduction and return to a $14.3 billion accumulated debt by 2026-27.

Acknowledging the unsustainable trend of spending increases, Legacy mentioned the need for “hard decisions” in the future. The government plans to launch a transformation initiative to eliminate ineffective spending and allocate resources more efficiently. Consultations with community organizations will be prioritized to ensure informed decision-making.

Notably, the budget does not allocate funds for travel nurses following the cancellation of remaining shifts by the Vitalité Health Network. Contracts with Canadian Health Labs were expected to cost taxpayers $108 million in the current fiscal year.

Overall, the Holt Liberal government faces the challenge of balancing essential services, economic support, and fiscal responsibility in the midst of ongoing deficits. Tough decisions lie ahead as the government navigates the path towards financial sustainability.