N.B. grossly underestimates budget surplus — again
Surplus for this year estimated at almost $200 million — 5 times what was projected in March
The New Brunswick government has once again vastly underestimated its budget surplus.
In March, Finance and Treasury Board Minister Ernie Steeves estimated the budget surplus at about $40 million. On Monday, he said projections for the 2023-24 fiscal year show a surplus of $199.6 million.
But Steeves said Monday that he's treating the surplus cautiously. He said he's not seeing the same early signs of windfalls that were seen in the last few years.
Last year at this time, the government projected a $135.5 million budget surplus for the 2022-23 fiscal year, which eventually ballooned to $882 million, while the projected deficit of nearly $250 million in 2021-22 turned into a $777-million surplus.
According to documents released by the province on Monday, total revenue is projected to be $151.3 million higher than budgeted, while total expenses are projected to be $8.1 million lower.
"The net debt is projected at $11.7 billion, an improvement of $145.9 million from Budget," said the report, titled Fiscal and Economic Update for the first quarter.
A government news release on the report said this would be "the lowest projected net debt per capita east of Saskatchewan."
According to the report, the improvement in the total revenue projected is due to "higher conditional grant revenues, reflecting the timing of revenue under several conditional grant agreements, and higher Disaster Financial Assistance funding. Stronger-than-anticipated growth in the economy is positively impacting personal income tax revenue and harmonized sales tax revenue."
A sign of strong economy, Steeves said
Steeves said the financial results for first-quarter of this fiscal year "demonstrate the continued strength that the province's economy has shown for several months."
This, he said, has allowed the province to "invest in areas with the greatest need."
The news release said this spending included:
- $500 million over three years to the province's housing strategy "in current and previously announced projects."
- $47 million this year to support projects under the Climate Change Action Fund.
- $33.3 million to reflect the impact of a growing population on the education system.
- A development agreement with Neqotkuk (Tobique First Nation) that will provide more than $22 million over five years to support housing and road repair.
- $2.1 million for better diabetes management.
- $2.5 million over six years to support vulnerable children and their families through Bee Me Kidz.
The first-quarter numbers also project "real GDP growth of one per cent in 2023, comparable to the average among private sector forecasts of 1.2 per cent," the report said.
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N.B. grossly underestimates budget surplus — again
Surplus for this year estimated at almost $200 million — 5 times what was projected in March
In March, Finance and Treasury Board Minister Ernie Steeves estimated the budget surplus at about $40 million. On Monday, he said projections for the 2023-24 fiscal year show a surplus of $199.6 million.
But Steeves said Monday that he's treating the surplus cautiously. He said he's not seeing the same early signs of windfalls that were seen in the last few years.
Last year at this time, the government projected a $135.5 million budget surplus for the 2022-23 fiscal year, which eventually ballooned to $882 million, while the projected deficit of nearly $250 million in 2021-22 turned into a $777-million surplus.
Liberal MLA and finance critic René Legacy said he's not as concerned about the government's inability to accurately predict surpluses as he is about its lack of planning.
Once a surplus is predicted in the spring, he says officials should immediately begin talking about how to spend that money.
After
several back-to-back budget surpluses, Liberal MLA and finance critic
René Legacy said the government once again fails to have a plan for the
surplus that was predicted in March — an amount which has since
increased five-fold. (Jacques Poitras/CBC)
"Yet what we're hearing is, 'Well, we'll start discussing it in the weeks to come.' This isn't new. This has been happening pretty much since they got elected," said Legacy on Monday after the government's announcement.
Economist Richard Saillant said he fully expects the projected surplus to grow beyond $199.6 million, which is what happened with projections made last summer when a conservative estimate ended up being a record $882 million.
"It looked somewhat as a repeat of the scenario from last year, but I'm not willing to claim at this point that we'll end up with another record surplus. But I do feel that … the year-end surplus that is currently being forecasted is probably on the conservative side."
Saillant said regardless of the size of the surplus, the province has ample flexibility to invest more in health, education, housing and to address the cost of living crisis.
Economist
Richard Saillant believes the province's surplus is likely to exceed
the first-quarter estimate, but he doesn't think it will reach last
year's record-setting $882 million. (Jacques Poitras/CBC)
"We could have started spending more as soon as the pandemic hit us. We were the province that spent the least on pandemic relief in Canada — by far. And we have improved our fiscal position — the fastest-ever witnessed in history and the fastest among Canadian provinces. We are now the least indebted province east of Saskatchewan."
Speaking to reporters after the release of the quarterly report, Steeves defended the ballooning surplus. He said with a $12.2-billion budget, he's satisfied with being off by 1.6 per cent.
"It's an honest try to be as accurate as possible, and I think 1.6 off is certainly understandable," said Steeves.
Revenue estimated $151M higher, expenses $8M lower
According to documents released by the province on Monday, total revenue is projected to be $151.3 million higher than budgeted, while total expenses are projected to be $8.1 million lower.
"The net debt is projected at $11.7 billion, an improvement of $145.9 million from Budget," said the report, titled Fiscal and Economic Update for the first quarter.
A government news release on the report said this would be "the lowest projected net debt per capita east of Saskatchewan."
According to the report, the improvement in the total revenue projected is due to "higher conditional grant revenues, reflecting the timing of revenue under several conditional grant agreements, and higher Disaster Financial Assistance funding. Stronger-than-anticipated growth in the economy is positively impacting personal income tax revenue and harmonized sales tax revenue."
A sign of strong economy, Steeves said
Steeves said the financial results for first-quarter of this fiscal year "demonstrate the continued strength that the province's economy has shown for several months."
This, he said, has allowed the province to "invest in areas with the greatest need."
The news release said this spending included:
- $500 million over three years to the province's housing strategy "in current and previously announced projects."
- $47 million this year to support projects under the Climate Change Action Fund.
- $33.3 million to reflect the impact of a growing population on the education system.
- A development agreement with Neqotkuk (Tobique First Nation) that will provide more than $22 million over five years to support housing and road repair.
- $2.1 million for better diabetes management.
- $2.5 million over six years to support vulnerable children and their families through Bee Me Kidz.
The first-quarter numbers also project "real GDP growth of one per cent in 2023, comparable to the average among private sector forecasts of 1.2 per cent," the report said.
ABOUT THE AUTHOR
Once a surplus is predicted in the spring, he says officials should immediately begin talking about how to spend that money."
Wow
True or False?
"On Monday, Andrea Johnson, the party's executive director, said as of Aug. 25, "the threshold had not been met to trigger the next steps for a leadership review."
On July 31, party president Erika Hachey said there weren't enough valid letters from riding association presidents. At first, only 15 were valid, but Hachey later told one member his letter was discounted by error. This meant members were four letters short, and they had until Aug. 25 to correct the problems and submit them again.
Johnson declined to answer questions about why the threshold was not met and what would happen next, if anything. She did not say whether the issue was the number of valid letters received or another reason. She said the one-sentence emailed response "will be our only comment."
Hmm......if this were an individual, with 25,000 in credit card debt and they suddenly were given $15,000....what would you suggest they do with it?
Do we consider debt repayment spending??
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Reply to G. Timothy Walton
Matt Steele
Hard to believe that some are complaining about provincial government efficiency , and budget surpluses . I guess massive government debt , huge interest payments , and downgraded credit ratings must appeal to some . Sometimes you just have to shake your head.......
G. Timothy Walton
Reply to Matt Steele
Well, some people do maintenance on their cars so they last longer. Some people do none and drive them till they die.
Guess whose cars last longer and cost less in the long run.
John Dale
Reply to Matt Steele
NB politics are small minded Matt. Many people are unable to look beyond their political prejudices.
Douglas James
Reply to Matt Steele
Privileged people in society always think its better to save money even though children are starving and the number of homeless people is growly rapidly.
Louis Léger
Reply to Matt Steele
Politics aside, the issue here is not the surplus. The issue here is having a finance minister who does not seem to be fiscally aware of the province’s position. When you underestimate a debt or a surplus, mid-to long-term policy decisions based on that underestimation become fundamentally flawed. For example, imagine if Government is negotiating collective agreements and refuses to budge because they have “no money,” when in fact they do but are unaware. Such policy decisions ripple through our society and cause issues in the most unexpected places. I don't believe that it's too much to ask to have a well-informed Government.
David Amos
Reply to Louis Léger
Well put
Matt Steele
Certainly good news for N.B.ers ; and a big thank you to Premier Higgs for managing our province , reducing our debt , and making the province a better place to be for future generations . Hard to believe that just five years ago when the Liberal govt. was defeated , that spending was out of control to the point that the N.B. Credit Score was being downgraded ; now the province is posting surpluses . Hard to believe what can be accomplished in just five years with a competent Premier , and manager ,at the helm .
Reply to Matt Steele
And grossly overtaxing us.
Mathieu Laperriere
Reply to Matt Steele
Since April, those experiencing homelessness has gone up 49%.
Mathieu Laperriere
Reply to Matt Steele
April 2022, forgot the year oops.
Don Corey
Reply to Mathieu Laperriere
Federal issue.
Robert Loblaw
Reply to Matt Steele
You hit the nail right on the head when you said "manager at the helm". The province is a business and finally is being run as a fiscally responsible one
Rosco holt
Reply to Robert Loblaw
Government is not a business and shouldn't be run has one.
David Amos
Reply to Rosco holt
I agree
And 19% of NB population has food insecurity. Unbelievable.
Christine Martinez
Reply to Susan Power
This is not controllable at the provincial level.
Don Corey
Reply to Susan Power
Look no further than Ottawa.
Douglas James
Reply to Susan Power
What's unbelievable is those who think that's perfectly acceptable so long as the province is in good financial shape. It's likely because they know a Conservative government will eventually loosen the purse strings by cutting taxes for the privileged.
Rosco holt
Reply to Douglas James
The privileged are the only ones that exist in the eyes of conservatives. The rest can work at slave wages.
Louis Léger
Reply to Christine Martinez
A better outcome is absolutely controllable at the provincial level through social and financial programs.
David Amos
Reply to Rosco holt
True
Michael Cain
Reply to Edward Andrews
You know Higgs would never return it to the taxpayer.
Greg Bragdon
Reply to Edward Andrews
Pay the debts already
Dianne MacPherson
Reply to Michael Cain
Premier Higgs DOES "return it to the taxpayer".
Paying down the Debt is awesome !!
We all win.
Dee MacDonald
Reply to Edward Andrews
Let's see how quickly the Liberals in the group can spend this money.
Michael Cain
Reply to Dianne MacPherson
When does this happen?
Don Corey
Reply to Michael Cain
Paying down the provincial debt is a benefit to all the citizens of NB.
Michael Cain
Reply to Don Corey
Keeping us the poorest province in Canada, always looking for federal handouts, benefits no one.
Don Corey
Reply to Michael Cain
You’ve pretty much worn out that bit of disinformation.
David Amos
Reply to Don Corey
IMHO If folks had read my work in 2013 while Higgy was playing with pensions we would have been out debt immediately I also said it loud and clear on Rogers TV in 2018 when I ran against Higgy et al Correct?
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