Second-quarter results show a deficit of $131.4 million06 December 2018
FREDERICTON (GNB) – The government has released second-quarter results for the 2018-19 fiscal year which show a deficit of $131.4 million. The net debt is projected to increase by $337.8 million and reach $14.3 billion by March 31, 2019.
“If we continue to grow our debt, we risk our province’s credit rating and the future of services like health and education,” said Finance Minister Ernie Steeves. “The spending decisions we make now will impact our children and our grandchildren. They deserve a legacy of financial security so they can pursue their dreams right here at home.”
Total expenses are projected to be over budget by $94.4 million. The major variances are associated with the 2018 spring flood and the higher costs for social programs such as the Disability Support Services program, the Child Welfare Services program and the Housing program.
Revenue is $151.7 million higher than budget, mainly due to higher-than-expected corporate and personal income tax revenue and an increase in conditional grants.
The department projects real GDP growth for New Brunswick of 1.1 per cent for 2018, unchanged from the forecast in the 2018-19 budget. This is consistent with the one-per cent growth rate consensus among private sector forecasters.
“There are many challenges ahead, yet solutions can be found that are innovative, efficient and cost-effective,” said Steeves. “As a government, we have to look at our fiscal position over the next several years. This not only includes our surplus or deficit, but also our growth in net debt.”
The Dominion Bond Rating Service downgraded the province’s outlook from a stable to negative trend in February, while maintaining the rating of A (high).
The second-quarter results are available online.