first quarter

The province has released its first-quarter fiscal projections for 2026-2027, and once again they are higher than first predicted.

Thursday’s update revealed the province’s projected deficit is now estimated at $1.66 billion, over $265 million higher than what March’s budget first forecasted.

That will push the province’s net debt to $16.2 billion by the end of the 2026-2027 fiscal year. This also means the province’s debt as a measure of GDP will rise from 30.8 per cent to 31.3 per cent.

According to a report shared by the province, the shortfall is mainly driven by increased spending on social development and health, as well as a decrease in projected revenue due to receiving less than expected money from federal programs.

Finance Minister Rene Legacy said that the province is looking at “all possible avenues” to improve revenues and reduce spending.

He said his department is working with other departments to find efficiencies and reduce the deficit through ongoing cuts to civil service and other measures while also keeping essential services running.

“We must meet New Brunswickers needs, but we must continue to find ways to do it in a fiscally sustainable manner, all the while looking for opportunities to meaningfully build our provincial economy,” he said.

However, only two departments are showing significant reductions.

The Department of Education and Early Childhood Development is spending $15 million less than expected, just because child-care spaces haven’t been created as quickly as expected under the Canada-New Brunswick child-care agreement.

And Opportunities New Brunswick is spending $5.6 million less than planned in economic development assistance.

Meanwhile, health care is expected to be over budget by $108 million, due to higher operating costs with the two regional health authorities.

Social Development is projected to spend $123.2 million more than planned because of increased demand for income assistance, child welfare, disability support, and long-term care services.

Other nine government bodies were listed as over budget during the first quarter, including New Brunswick’s housing corporation and its Justice and Public Safety Department.

Legacy said the province has already identified $75 million in cost savings, adding that some potential savings have been found in health care, but they won’t show up until the second-quarter fiscal update.

Legacy added that 204 government jobs have been eliminated so far through attrition out of the 259 positions, saving $15.7 million out of an expected $20 million.

The province will also spend around $54 million less than budgeted because of projects not advancing as anticipated under a joint federal-provincial infrastructure.

However, the province is also getting $30 million less in revenue from the federal government under that agreement, for a net saving of $24 million.

Overall, the province’s revenue over the three-month period was projected to be $35.8 million lower, due to also receiving less money from the Atlantic Lottery Corp. and forestry royalties.

Legacy noted that the province’s shale gas review — announced Wednesday — could also be an opportunity to grow New Brunswick’s economy due to potential gas royalties.

However, he said there are still several unanswered questions and that changes “will not happen overnight.”