PC government expects narrow surplus for 2018-19

The New Brunswick government will have a razor-thin $4.5 million budget surplus this year, Progressive Conservative Finance Minister Ernie Steeves has announced.

The dramatic improvement over the $188.7-million deficit projected in the Liberal government's last budget is attributed mostly to higher than expected revenues, including personal and corporate income taxes and federal transfer payments.

The new projection is from the government's third-quarter financial results for 2018-19.

Premier Blaine Higgs let the cat out of the bag two weeks ago when he said the province would have a balanced budget this year.

But Steeves warned that the surplus is on a "thin edge" and the province's debt continues to grow. That means his first provincial budget next month will look for new ways to reduce spending, he said.

"It's going to be a difficult budget. We need to explore new ways to do things in a more efficient manner."

Steeves said he's looking at all programs "from beginning to end" to find savings.

Figures released by Steeves's department project corporate income tax revenue will be $130.9 million higher than expected when the 2018-19 year ends on March 31. Personal income tax is forecast to be $101 million higher than expected.

Federal transfers for health and social services are also up because Statistics Canada has updated its 2016 census figures to reflect a higher New Brunswick population.

Spending is also higher than in the budget, including $21.7 million the province must spend to pay off contractors who were ordered in December to stop their work on various projects.

That's when Steeves cut planned infrastructure spending by more than $200 million, cancelling several large projects started under the Gallant Liberals.

That included a replacement New Brunswick Museum in Saint John and a new courthouse in Fredericton.

In its throne speech last fall, the Higgs government promised two tax cuts whenever the province had a balanced budget.

One was the elimination of the small business tax and the other was an end to property taxes on secondary properties.

Steeves said the government hasn't decided whether to make those cuts in its upcoming budget.

The minister will introduce his first full budget for the 2019-20 fiscal year when the legislature resumes March 19.