No tax or fee increases, small budget surplus, plan to pay down massive debt in first minority government budget
No tax or fee increases, as part of New Brunswick’s first budget from its new minority government. The budget projects a small surplus and features an aggressive plan to pay down the province’s massive debt. The budget will impose spending cuts to specific government departments but overall, the cuts are minor. However, these cuts will compound on the previously announced capital budget, which was slashed by 30% from the one promised by the previous government’s multi-year capital plan.
RCC is generally pleased with the direction the government has charted for the province. However, RCC is mindful that despite government cuts, overall spending is still increasing by 1.3%.
Deficit and Debt
- The previous government had projected a $188.7 million deficit for 2018-19. The fiscal ‘belt tightening’ approach taken by the new PC government has resulted in a budget surplus for 2019-20 is $4.5 million. The projected surplus for 2020 will be over $23 million.
- The province’s net debt currently sits at almost $14.1 billion for a population of 767,000 people. The net debt is projected to decrease by $49.2 million by 2020. This will mark the first time in thirteen years that the net debt will decrease.
- The province currently spends $700 million per year to service the existing debt.
- The current PC government campaigned on a promise to set aside $125 million per year to pay down the debt. This promise will not be kept in the current budget cycle.
- The 2019-20 Capital Budget (released in December 2018) was cut to $600 million. The previous government’s multi-year capital plan would have set the 2019-20 capital budget at $865 million.
Other Budget Items of Note
- Revenue is expected to grow at 1.5% for 2019-20.
- The province’s economy is expected to only grow by 0.6% for 2019-20.
- The government will institute a practice of providing quarterly financial reports as opposed to only year-end projected results.
- The government committed to link changes in minimum wage to the Consumer Price Index for the previous year. RCC is pleased that the government is adhering to RCC’s long held advocacy on minimum wage but remains disappointed that there is no commitment to legislate this change.
- There are no new fees or increases to fees.
Retail Council of Canada (RCC) will push for government to maintain the course towards achieving sustainable balanced budgets. Once the budget reaches a level of sustainability, RCC will call for corporate relief and HST relief, recognizing the sacrifices made by New Brunswick retailers to enable the government to reach its balanced budget.
If you have any questions or concerns, please don’t hesitate to contact: Jim Cormier, Director (Atlantic) at: email@example.com or (902) 422-4144