New Brunswick's $12.2-billion budget targets challenges that come with growth

FREDERICTON -

The New Brunswick government tabled a $12.2-billion budget Tuesday that forecasts a small surplus and promises a funding boost to help stabilize the ailing health-care sector.

Finance Minister Ernie Steeves said the province is operating in a volatile economic environment where rapidly rising prices are putting pressure on household budgets and increasing costs for businesses.

While the province is riding high on a wave of population growth, it comes with challenges of providing housing, health care and education for newcomers. Steeves said new spending in the budget targets those sectors.

"Our government is proud of how we've been responsible with taxpayers' money, while finding that important balance with spending on priorities including health care, education, and absolutely supporting our most vulnerable," he told a news conference before tabling the budget in the legislature.

The 2023-24 budget provides for a $40.3-million surplus on total revenues of $12.19 billion and expenditures of $12.15 billion.

The government posted a record surplus of $862.2 million for the 2022-23 fiscal year after projecting a surplus of just $35 million in the budget tabled a year ago.

Steeves justified last year's large surplus, saying the government "ran into some oddities," which included about $433 million in unexpected income tax revenue and transfers from earlier years. "These are happening at a different pace in New Brunswick now," he said. "You can't count on things staying status quo. It's a different time. Predicting is very hard."

The budget provides $3.6 billion for health care, an increase of 10.6 per cent from last year, which comes with about $250 million in federal assistance.

"We are looking to transform health," Steeves said. "Budgets are about tough decision decisions being made. And we're looking for a health-care system that is punching beyond its weight, I guess."

The budget includes $10.4 million for increasing the number of doctors "working in teams" and $29.7 million to address recruitment and retention challenges.

The finance minister noted the province has moved from a struggling economy to one dealing with challenges that come with growth.

The province's population topped 800,000 last year, adding more than 40,000 people over the previous five years through immigration and arrivals from other parts of Canada. School enrolment has increased by about 4,200 and is expected to rise by another 2,200 students next year.

In response, the government has set aside an additional $33.3 million to pay for teachers and classroom materials that come with the increase in number of students.

While there is no cap on rent increases in the budget this year to help tenants or newcomers, Steeves said the government will give $1 million toward a new IT system for the residential tenancies tribunal. He said the government is helping alleviate the housing crunch with the building of new properties and by encouraging private developers to build.

"We are also helping them with the rent tribunal," he said. "We don't want anybody taken advantage of. (But) in order to keep the business growing, and the housing industry growing, we thought a rent cap was counterproductive."

The government also plans to spend an additional $32.6 million to "increase police visibility" and "increase the rate at which crimes are solved." Steeves said he has "anecdotal evidence" to support the increase in police funding.

"I mean, there's one half to it in the policing and the crime fighting," he said. "There's the other half, which is dealing with a very vulnerable population." The increase in annual funding will allow for an additional 80 RCMP officers to be hired.

Richard Saillant, an economist and former vice-president of the Universite de Moncton, said the budget lacks vision and transparency.

"I don't see anything different from the last two years," he said, adding that nothing in the budget meaningfully addresses the priorities of New Brunswick.

He pointed to the lack of money aimed at the housing shortage. The government set aside about $4.9 million to repair existing housing and help in rent for low-income households.

"But what we need to be looking at would be in the hundreds of millions of dollars to even make a dent into the type of issue that we're faced with here now," Saillant said. "The government is essentially saying that it believes in the magic of market forces."

Liberal Opposition Leader Susan Holt said the government should be "listening to New Brunswickers" and doing more to provide housing and health care.

"I was really shocked to see nothing in housing in the budget," Holt said.

Green Party member Kevin Arseneau called the budget dangerous.

"I think it's an austerity budget," he said. "We have crumbling public services and we're still asking them to do more with less at the end of the day. If you look at inflation, it's an austerity budget. There's nothing new coming."

This report by The Canadian Press was first published March 21, 2023.