New Brunswick tabled its 2021-22 operating budget featuring increased spending to stimulate the economy. Despite the fact that the economy is only projected to grow by 2.9 percent this year and government revenue will only increase by 1.2 percent, government spending will increase by 3.4 percent. The government is focusing its spending on health care, fighting the pandemic, the energy sector and affordable housing. The government is projecting large deficits for at least the next two years.
Budget initiatives which could have a direct impact on the retail sector include initiatives to address gaps in the broadband network and an increase in the province’s carbon tax.
Deficit and Debt:
- The 2020-21 budget is projecting a deficit of almost $12.7 million with a net debt of almost $13.9 billion.
- The 2021-22 budget is forecasting a deficit of almost $245 million deficit with the net debt increasing to over $14.1 billion. A major factor in the large deficit projection surrounds the uncertainty over the renewal of federal COVID-19 programs. These programs will be expiring at the end of March 2021.
- The carbon-emitting products tax will increase from $30 per tonne to $40 per tonne on April 1, 2021. This will result in a carbon tax increase of 2.21 cents per litre for gasoline and 2.68 cents per litre for diesel. The tax revenue will be directed back to New Brunswickers.
- Of interest to home improvement retailers: $10.8 million is provided to increase the availability of affordable housing units throughout the province in conjunction with the new National Housing Strategy and the Canada Housing Benefit.
- Funding for physician and nurse practitioner recruitment.
- Funding to improve wages for various health and social services support workers.
- A $20 million multi-year investment to support the development of the small modular nuclear reactors sector.
- $36 million will be transferred to the Climate Change Fund.
- The budget includes $64 million for specific pandemic spending.
- Of interest to pharmacy retailers: Of the above noted $64 million, $30 million will be allotted for the vaccination program. The government has already announced that pharmacies will be involved in the ongoing vaccinations.
For questions or more information contact
Director, Government Relations (Atlantic)