APEC’s new member-only publication ATLΛNTIC Fiscal Monitor provides independent insights on Atlantic provincial budgets and the federal budget.
New Brunswick’s 2021 budget, released March 16, 2021, forecasts a $245 million deficit for 2021/2022, up from $13 million this fiscal year. With a drop in federal COVID-19 related transfers, spending will grow almost three times faster than revenues. Spending will increase over 3% to fund COVID-19 supports and higher health care costs. Revenues are forecast to grow by 1% on average over the next three years, signaling a slow economic recovery.
The government does not project a return to balance until sometime after 2023/24. Net debt will grow by almost 2% to $14.1 billion this year. This is 36% of GDP, down from 41% in 2015/16. The government projects debt-to-GDP to decline modestly despite deficits in the next few years. However, longer-term fiscal sustainability remains a concern.