2020-21 budget: Responsible management leads to strategic investments, tax reductions, and decrease in net debt10 March 2020
FREDERICTON (GNB) – The provincial government tabled today a $10.2 billion 2020-21 budget designed to strike a balance among lowering the debt, addressing priority areas and putting money back into the pockets of New Brunswickers.
“Our 2020-21 budget demonstrates that it is possible to live within our means when you embrace solid and responsible financial management,” said Finance and Treasury Board Minister Ernie Steeves. “By maintaining fiscal discipline, we can improve and deliver high-quality public services, reduce our debt, and return some hard-earned dollars to New Brunswickers where it rightly belongs.”
Responsible financial management
The budget is balanced, with a projected surplus of $92.4 million which would be a surplus for the fourth consecutive year. Revenues are projected to grow by 3.4 per cent, while spending is expected to grow by 3.5 per cent. Net debt will be reduced by $129.3 million.
The Department of Finance and Treasury Board projects that the New Brunswick economy will expand by 1.2 per cent in 2020-21.
The government is projecting a surplus of $97.8 million for 2019-20, an improvement of $74.6 million over budget. This is the first time a surplus was budgeted and successfully achieved since before the global financial crisis in 2008. Also, for the first time in 13 years, the net debt is projected to decrease by $148.4 million from the 2018-19 level.
Addressing priority areas
Responsible financial management allows the government to address the following pressing issues:
Dependable public health care
- More than $2.9 billion in funding for health, a 3.9 per cent increase over last year which is double the rate of inflation expected for New Brunswick.
- $1.5 million will be added to the vaccination program so that all New Brunswickers will have access to free flu shots to protect themselves and their families. An Immunization Registry will also be launched.
- An additional $6.2 million will be added to oncology drug funding and CAR-T therapies to more effectively treat cancer.
- $5.5 million to mental health programs in social development, health care, and education ($3 million in mental health services across the province, $1.4 million in the education system, $1.1 million in addiction and treatment programs).
- $4.2 million for placing nurse practitioners in emergency rooms and clinics around the province.
- $5 million for a rural incentive program to ensure that rural New Brunswick maintains and gains new physician resources in the years to come.
- $5 million to help move Alternative Level of Care (ALC) patients out of the hospitals and to relocate them into nursing homes and special care homes.
- $7.1 million to hire more teachers for the upcoming school year.
- $3 million to support teachers with inclusion in the classroom.
- $6.1 million to address the growth in demand for educational assistants in schools.
- $1.3 million to work with 12 schools to create new opportunities for learning French as a second language in the elementary, middle, and high schools.
- $1.1 million more in the francophone education sector to support change leadership with school administrators, and further career exploration for students;
- A wage increase of 75 cents-per-hour for early childhood educators.
- A decrease of interest rates on the provincial portion of student loans to the prime rate from the prime rate plus 2.5 per cent.
Vibrant and sustainable communities
- $5.4 million to increase social assistance rates under the Transitional Assistance Program, Transitional Assistance Program – Single Employable, and the Extended Benefit Program.
- The indexation of social assistance rates to the Consumer Price Index.
- $36 million for investments in climate change initiatives, and an additional $9 million to ensure the competitiveness of the natural gas distribution system.
- $500,000 to the Arts Development Trust Fund, a 70 per cent increase over the 2019-20 level.
- $500,000 for the Sports Development Trust Fund, double the amount in 2019-20.
- $1.6 million to the New Brunswick Legal Aid Services Commission (NBLASC) to improve access to legal services for those who need the support.
- A 25 per cent increase in the rates paid to foster caregivers to assist them in providing a safe and secure home to children under their care.
- $800,000 to ensure core funding for resource development consultation co-ordinator positions within First Nation communities. The role of these co-ordinators will be to act as liaisons to the community, Chief and Council, government and proponents.
Responsible financial management allows the government to begin reducing taxes:
- Beginning with the 2021 taxation year, a 50 per cent reduction of the provincial non-owner-occupied property residential tax rate (double-taxation) over a four-year period to $0.5617 per $100 of assessment from $1.1233. This represents a reduction of 14.04 cents per year until 2024.
- Beginning with the 2021 taxation year, a reduction over a four-year period of the provincial non-residential property tax rate to $1.8560 per $100 of assessment from $2.1860, which is a reduction of 8.25 cents per year until 2024.
- As part of the made-in New Brunswick carbon plan, effective April 1, 2020, the gasoline tax will decrease by 4.63 cents per litre and the motive fuel (diesel) tax will decrease by 6.05 cents per litre.
Continued debt reduction
Responsible financial management allows the government to reduce its net debt.
To further ensure continued fiscal progress, the government is acting on the recommendation of the Auditor General and will publish, for the first time ever, multi-year net debt-reduction targets and net debt-to-GDP targets.
Under this plan, the government expects to reduce net debt by $530 million over the next four years and, combined with economic growth, the net debt-to-GDP ratio is projected to fall to 32 per cent by 2023-24.
“By acting with a sense of urgency, our government has built a solid financial foundation,” said Steeves. “We have made great progress in a short period of time, but there is still much more to do. There are many challenges ahead, and we see constant rising demands. Our 2020-21 budget recognizes our challenges, addresses them head-on, and creates the conditions for growth while improving our financial flexibility.”
The 2020-21 budget speech and other relevant documents are available online.10-03-20