FREDERICTON (CNB) – The provincial government released its second quarter report which projects the province's deficit for 2011-12 to be $545.7 million. This is an increase of $31.4 million from last quarter's projection and $96.9 million from budget.

"Softening revenues are largely responsible for the increase in the projected deficit from our projection last quarter," said Finance Minister Blaine Higgs, "Private sector consensus outlooks for Canada and all provincial economies have been downgraded since July. New Brunswick has not been insulated from the global market conditions that we have witnessed, including the impact on financial markets caused by the debt crisis in Europe and the lowering of the United States credit rating."

Revenues are projected to be $37 million lower than budgeted. This is due to the weakened economy and projected decreases in personal income tax revenue; decreased revenues from the NB Liquor and from the Lotteries and Gaming Commission.

These decreases are partially offset by gains in the metallic minerals tax, licenses and permits and corporate income tax revenue.

Total expenses were $59.9 million higher than budgeted, which represents a slight decrease from the first quarter estimate. This is mainly due to a decrease in expenses in the Department of Health, Service of the Public Debt, and government's Special Operating Agency account. These decreases were partially offset by an increase in expenses in legislated pension plans and employee benefits and the Department of Agriculture, Aquaculture and Fisheries.

"With this fiscal update, we introduced a departmental budget scorecard to ensure departments are accountable for their budgets and keep the public and government informed about their spending," said Higgs.  

The scorecard is featured on the quarterly estimate. Departments which are projected to be more than $500,000 over budget are featured in red with an exclamation point, while departments under budget receive a green check.

Higgs also warned about the high levels of debt that the government continues to service.  Net debt is projected to increase by $700.3 million year-over-year.

"By the end of this year, New Brunswick will be over $10 billion in debt," said Higgs."This is unacceptable and unsustainable. It serves to underline the importance of the government renewal exercise which will look at how to deliver services to the public on a more efficient and sustainable basis."

LINK:

Department of Finance: www.gnb.ca/finance


03-11-11