Skyrocketing New Brunswick Deficit Projected at $668.7 Million, Almost a 22% Increase
In a recent development, the Canadian province of New Brunswick is grappling with a revised budget deficit for the 2025-26 fiscal year. The government has projected a deficit of $668.7 million, an increase from the $549 million forecast in the March budget.
The U.S. tariffs imposed on some Canadian goods are negatively affecting the province's economic outlook, but the exact impact is still unclear. The government is closely monitoring the situation, with expectations of a better understanding of the impact of tariffs and trade on their projections in the second and third quarters.
The revised budget deficit is attributed to higher costs in health and long-term care, seniors, and child and youth welfare. As a result, revenues in the province are expected to be $59.6 million lower than the budget forecast, and expenses are projected to be $60 million higher than the March estimate.
Finance Minister René Legacy has assured that investments in health, social development, and addressing affordability challenges will not be sacrificed in favor of only satisfying the bottom line.
The province's GDP growth for the year is estimated to be 0.9 per cent, lower than the private sector forecast average of 1.2 per cent. However, the government has observed wildfire-related restrictions and provided a ballpark estimate for the lost forest area. This has resulted in approximately $10.5 million in direct and indirect tax revenues from forestry and $42.5 million from sawmill operations.
The government remains committed to its goals and is working diligently to navigate these challenging economic times. The revised budget deficit is a reflection of the current economic climate, but the government remains optimistic about the province's future.
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