New Brunswick’s Liberal government has released a $9.6 billion budget with the province’s 11th straight deficit and a hefty increase in the net debt.
“There is an old adage that says you have to spend money to make money,” Finance Minister Cathy Rogers said Tuesday.
The 2018-19 budget projects a deficit of $189 million and adds $372.3 million to a net debt that’s now set to hit $14.4 billion by the end of March 2019. That’s about $19,050 for every man, woman and child in the province.
The annual cost of servicing that debt is about $675 million.
“The budget includes an additional $73 million in new targeted investments to support economic competitiveness, youth employment and seniors, which will delay a return to a balanced budget by one year, to 2021-22,” Rogers said.
On Monday, Charles Lammam, director of fiscal studies for the Fraser Institute, said it’s time New Brunswick cuts spending and starts to address the net debt.
“When measured as a share of the provincial economy, New Brunswick currently stands as one of the most indebted provinces in all of Canada,” he said, adding that the government is just punting tough decisions to the future.
But on Tuesday, Rogers said the government is in fact meeting the province’s challenges head-on.
“We cannot afford to ignore the urgent challenges facing our province,” she said.
“We could have chosen not to address these additional areas but we think the risk of not giving attention to these urgent matters was greater than the risk of delaying our return to balance one year,” Rogers said.
There are no new taxes or fee increases in the budget, the final one prior to a provincial election set for September.
As announced in November, the small business corporate income tax rate will be reduced to 2.5 per cent effective April 1.
The biggest expenditure is for the Health Department, at $2.75 billion — an increase of 3.7 per cent from last year.
The spending will include the full implementation of the New Brunswick colon cancer screening program and efforts to reduce wait times for hip and knee replacements.
$37.4 million has been earmarked for a climate change fund, with government taking the money from existing gas taxes rather than imposing a new carbon tax.
Federal Environment Minister Catherine McKenna has already discounted that idea.
New Brunswick is also increasing spending for Education and Early Childhood Development by 6.1 per cent to $1.25 billion, while the Tourism budget increases by 4.1 per cent to $62.6 million.
Full details of the spending will have to wait until budget estimates are presented in the legislature.
Kevin Bissett, The Canadian Press