New Brunswick’s projected deficit has improved by $347 million since the first quarter, with the province now forecasting a deficit of $1.31 billion for the 2026-27 fiscal year.
The government says higher-than-expected revenues and efforts to find savings across departments have helped improve the province’s financial outlook.
The second-quarter fiscal and economic update shows the projected deficit has fallen from $1.66 billion in the first-quarter forecast.
Total revenue is now expected to come in $290 million higher than budgeted, driven largely by stronger corporate and personal income tax revenues linked to population and employment growth.
Finance Minister Rene Legacy said the province’s economy is performing better than expected despite ongoing financial pressures.
The minister said the government is also looking internally for ways to reduce costs and improve efficiency.
“Departments are already identifying savings and improvements across government. That work has found cost savings of approximately 95 million to date,” Legacy said.
Legacy later acknowledged the savings alone are not enough to offset the province’s deficit.
The update shows spending pressures remain significant in several areas of government.
Total expenses are projected to exceed budget by $207.9 million, driven largely by higher costs at the Department of Social Development and within the health-care system.
Social Development is forecast to exceed budget by $164.6 million, while health spending is projected to come in $78.1 million above budget.
Legacy added that the province has also made progress on a workforce attrition plan aimed at reducing costs within government.
“Year to date, we’ve met 96% of this year’s reduction targets and have downsized 248 positions of the 259 targeted already this year,” he said.
The report indicated that unexpected population growth has led to increased revenues from higher personal income taxes, corporate income taxes, and federal transfers.
Updated population figures from Statistics Canada were incorporated into the latest forecast.
Despite the improved outlook, the province continues to project a net debt of roughly $15.7 billion by the end of the fiscal year.
Legacy said the government will continue looking for efficiencies while protecting public services and managing ongoing spending pressures in health care and social programs.
