Sat. Apr 20th, 2024

Fredericton presents 'forgettable' budget without big measures

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New Brunswick Finance Minister Ernie Steeves presented his government's budget titled “Stronger Than Ever” on Tuesday.< /p>

  • Alix Villeneuve (View profile)Alix Villeneuve

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A few months before the provincial elections, the government of Blaine Higgs in New Brunswick is maintaining a hard line for its 2024-2025 budget. He presented a modest budget surplus of $41 million, roughly the same as the previous year.

The total budget is 13 .3 billion, about 800 million more than the previous year. No new tax cuts were announced on Tuesday.

Finance Minister Ernie Steeves defends his budget. He explains that the province is forecasting a significant slowdown in economic growth and GDP growth of only 0.7% for 2024.

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The Minister of Finance presented a budget on Tuesday which provides for a slight surplus.

The pace of revenue growth in recent years is expected to slow, and it would not be sustainable in the long term to maintain such growth in spending, writes the minister in his document.

The financial plan I presented reflects the needs of a growing province, while taking into account the unstable period we are going through.

A quote from Ernie Steeves, Minister of Finance

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Ernie Steeves regularly advocated prudence in public finances, even when the province posted record budget surpluses. In 2023, he had forecast a surplus of 40 million, which is now estimated at 247 million, according to the ministry's most recent estimates.

This is not an electoral budget, indicates Richard Saillant, who has already been very critical of the accounting methods used for previous budgets.

This time, the expert appears less worried. He believes that the surplus announced by the government this year should correspond to the actual surplus. The revenue forecasts are quite realistic. They reflect an overall moribund economy.

It’s an accounting budget, so a budget that will please those who do not want a deficit.[…] It is a budget that could perhaps be described as forgettable

A quote from Richard Saillant, economist and researcher in residence at the Donald J. Savoie Institute of the University of Moncton

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Economist Richard Saillant believes that this year, the government's surplus estimates should be consistent with reality.

With population growth, we have to spend more […] but at the same time, we have an economic slowdown. Without population growth, we would be in recession, continues Richard Saillant.

According to him, the government should not have imposed the straitjacket of having a slight surplus, and it would have been understandable if it had a deficit.

We know that when the economy is not doing well, it often makes sense to run a deficit, not only to stimulate the economy, but also to make significant investments which must be done in these moments, explains the economist.

In total, $3.8 billion will be injected into the health system. This amount includes $70 million to help stabilize and reduce pressures within regional health authorities, the ministry says. Nearly $23 million will be added for technological projects.

The minister will, for example, fund a project for the creation of electronic records at Ambulance New Brunswick and for the modernization of medical records by community health centers.

On paper, however, the increase in health care spending remains minimal, with less than 2 million more this year compared to last year.

According to the explanations provided by the province, this small difference is explained by a series of one-off expenses which will not be repeated.

On the housing side, Fredericton invested $68.9 million in the New Brunswick Housing Corporation. An increase of 54.1% compared to last year's budget, specifies the Ministry of Finance.

In total, 22 million will be invested in a rental assistance benefit paid directly to families and seniors with essential needs.

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Economist Richard Saillant believes that housing is the “ largely absent” from the province’s latest budget.

According to Richard Saillant, this is the big thing missing from the budget. He judges that investments in this sector are not significant enough to meet the challenges of the province.

The education budget will increase by 200 million.

Fredericton is also announcing certain amounts to cope with the increase in the number of students in the education system.

An envelope of $18.6 million is planned to address the challenges associated with growing enrollment in the education system.

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Faced with the significant increase in the number of students, some schools have had to temporarily enlarge their classes. On Tuesday the province announced additional investments to meet this challenge.

$1 million will be added to cover increased costs related to the opening of new schools in Fredericton and Moncton next September.

For immigrant students, 2.5 million will be invested to help them acquire a new language.

The Minister of Finance estimates that the ratio of debt will continue to decline in the coming years.

It is expected to be 26.7% in 2024-2025 to reach 25.6% in 2026-2027.

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