FREDERICTON — New Brunswick is projecting a surplus of $135.5 million for the 2022-23 fiscal year, a rise of $100 million compared to the government's estimate in the spring budget.
Government revenues, meanwhile, are projected to be up by more than $220 million in contrast to what was budgeted in March.
The rise in projections is explained by a strong economy and population growth, which are producing more tax dollars for the government, Finance Minister Ernie Steeves said Tuesday in his first-quarter fiscal update. A one-time federal payment of $41 million to help the province cut its surgery backlog also led to a rise in revenues, he said.
"The economy is recovering much faster and our population is growing at a rate not seen since the 1970s," Steeves told a news conference. "These factors have contributed significantly to the improved results of our tax revenues."
But Steeves noted that the federal government has warned that the province's finances are not sustainable in the long term because of soaring health-care costs. "You know what? We have to find some other revenue."
Steeves called for striking a "proper balance between today's needs and creating a sustainable future for generations to come."
Total government expenses are projected to be about $120 million higher than in the spring estimate due to a rise in the cost of post-secondary education, training and labour, and transportation, he said.
The ripple effects of COVID-19 are "absolutely real," Steeves said, adding that inflation is at a rate not seen in 40 years, compounded by widespread labour shortages.
The Canadian Taxpayers Federation applauded the government's balanced books and surplus, and it called for tax cuts.
“Now is the time for the Higgs government to deliver on tax relief,” interim director Jay Goldberg said. “Provinces like Newfoundland and Labrador, Ontario and Alberta have delivered tax relief at the pumps in the wake of soaring gas prices, and New Brunswick should do the same.”
Liberal finance critic Rob McKee said it was hard to justify such a huge surplus. The federal money to alleviate surgery backlogs has gone to general revenues, he said.
"There's actually no new spending forecast in the budget," McKee said. He accused the government of being out of touch with reality and ignoring the issues faced by people in New Brunswick.
"With the health-care crisis, the housing crisis, for example, this government just does not have a concrete plan," McKee said. "If they do have one, it's not a good one. And they need to come forward and start addressing these issues."
This report by The Canadian Press was first published Aug. 30, 2022.
Hina Alam, The Canadian Press