New Brunswick's budget deficit is projected to hit a record $1.3 billion this year, more than double the initial projections made by the Holt Liberal government. Finance Minister René Legacy announced the updated figures, stating that balancing the budget by the end of their four-year mandate in 2028 will be "extremely difficult". The ballooning deficit stems from increased health-care costs and lower-than-expected tax revenues.
The projected $1.3 billion deficit is almost $800 million higher than the $549 million shortfall announced in the spring budget of 2025. Rising health-care costs are a significant factor, with expenses exceeding budget by $432.5 million. This includes increased compensation for doctors as part of a new agreement with the New Brunswick Medical Society. The Department of Social Development is also facing increased costs, with a $127.1 million overage due to higher demand for income security, child welfare, and seniors' programs.
On the revenue side, the province anticipates a $372.1 million shortfall, primarily due to lower corporate and personal income tax revenues, as well as reduced Harmonized Sales Tax (HST) revenue. Legacy cited the province's significant population growth in recent years as a contributing factor, requiring increased services for the growing population.
The government is now considering tough measures to address the deficit, including potential school closures in areas with low enrollment. Minister Legacy cautioned that the next budget in March will require difficult choices to get the province's finances back on track. Premier Susan Holt stated earlier this month that New Brunswickers will have the opportunity to identify ways to cut down the province's budget.
