First-quarter fiscal results released30 August 2016
FREDERICTON (GNB) – The provincial government has released its economic and fiscal update for the first quarter of 2016-17.
The province is currently projecting a deficit of between $262.4 million and $342.4 million. This represents a slight improvement to the budgeted deficit of up to $347 million.
“Our first-quarter update reflects new federal funding and related spending for investments in areas like affordable housing, post-secondary institutions, clean water and waste water,” said Treasury Board President Roger Melanson. “Aside from the new federal funding, our expenses are below budget, reflecting our ongoing commitment to managing spending and finances in a diligent manner.”
Expenditures are up $21.7 million from budget. Expenditures in planned provincial programs are actually down slightly from budget thanks to strong expenditure management by the provincial government. However, provincial participation in new federal-provincial infrastructure initiatives has increased expenditures by $25.7 million which is partially offset by underspending in provincial programs and by federal transfers.
Revenues are up $6.4 million from budget. This is largely a result of an increase of more than $40 million in federal transfers. This is offset by lower-than-expected revenues from NB Power. Because this revenue shortfall from NB Power is likely non-recoverable, and increased federal revenues are offset by increased expenditures, the government has decided to draw down its contingency fund by $20 million.
“The contingency reserve is there to protect us against unforeseen events, including weakened revenue. That is why we are making use of the reserve at this time,” said Melanson.
The first-quarter update also reports on progress made through the Strategic Program Review, which asked New Brunswickers to help identify expenditure reductions and new revenue to help eliminate the province’s deficit.
More than $115 million in expenditure reductions were found in the 2015-16 budget. In the 2016-17 budget, the government announced an additional $181 million in expenditure reductions would be achieved over the next five years. Based on first-quarter information, the projected additional expenditure reductions for 2016-17 will be more than $51 million. Once fully realized, the Strategic Program Review will yield $296 million in expenditure reductions and $293 million in increased revenue. The government continues to monitor implementation of these initiatives to ensure fiscal targets are met and a balanced budget is reached by 2020-21.
“We are working hard on the priorities of New Brunswickers and their families which are creating jobs, growing the economy, and securing health care and education,” said Finance Minister Cathy Rogers. “Our government is listening to New Brunswickers and we are getting things done.”