Auditor general encourages government to set net debt targets03 December 2019
FREDERICTON (GNB) – In her latest report tabled today in the legislative assembly, auditor general Kim MacPherson noted that she is encouraged by the province’s second consecutive annual surplus, however, she states work still needs to be done to improve New Brunswick’s fiscal situation.
The province recorded a small annual surplus of $73 million in 2019 which is an improvement over the budgeted deficit of $189 million. Net debt increased $33 million over the same period and reached a record high of $14 billion.
“I am encouraged by the shift in recent years from large annual deficits to small annual surpluses,” said MacPherson. “I now encourage the government to set multi-year net debt reduction targets and/or net debt-to-GDP targets. Doing so will ensure continued fiscal progress for our province.”
Other debt of concern to the auditor general is the debt for the New Brunswick Power Corporation and local governments. New Brunswick Power Corporation debt has reached $4.6 billion, and local government debt has grown to $950 million.
“The New Brunswick Power Corporation borrows directly from the province, and debt of local governments is guaranteed by the province,” said MacPherson. “This means if they were to default on their repayments, the province would be on the hook for repaying the debt.”
Also detailed in her report is a further $5.5 billion in future expenses that has already been committed through numerous signed agreements and contracts from past governments.
Other information regarding the audit of the province’s financial statements
The report released today also provides information on other items including the state of the province’s financial condition, results of the audit of the Province of New Brunswick’s financial statements, tax expenditures, contaminated sites, accounts receivable, results of the Crown agency financial statement audits, property assessments and opportunities to improve transparency.
The chapters on the financial audit can be found in Volume III of the 2019 Auditor General Report. Volume III focuses on matters arising from the annual financial audit of the province and Crown agencies. Volume II, also released today, contains performance audit chapters. These volumes and one-page summaries for select chapters are available online.