New Brunswick’s budget, released yesterday, projects the surplus will shrink to $35 million, from $488 million in 2022/2023, as spending grows faster than revenues.
Spending will increase 5.5% to fund higher wages and health care costs. Six out of every 10 additional dollars spent this year are for higher public sector wages. The health care budget will rise by almost $200 million.
The net debt-to-GDP ratio has improved since its most recent peak in 2015/2016, decreasing from 41% to 30%. It is expected to decline further over the next three years.
Over the next three years, total expenses will grow 2.8%, twice the rate of revenues. To ensure long-term fiscal sustainability, APEC's 20-year fiscal projections indicate the need to align health care costs to revenue growth. Health care costs have grown slightly below the pace of own-source revenues since 2017/2018. But social development costs, which includes senior care, have grown faster.