N.B. Liberals prepare 1st budget amid economic uncertainty

Jacques Poitras · CBC News

· Posted: Mar 18, 2025 5:00 AM EDT | Last Updated: March 18

The Holt government tables its first budget today, a document the Liberals once confidently predicted would feature campaign promises fulfilled, combined with a modest fiscal surplus.

Instead, with economic uncertainty from the threat of U.S. tariffs on Canadian exports, the question is how big the budget deficit might be.

Finance Minister René Legacy warned last month that a deficit appeared unavoidable in the upcoming 2025-26 fiscal year. 

“I would say it’s getting obvious that it’s highly likely,” he said at the time.

In a social media video last Friday, Premier Susan Holt said her government “cannot keep kicking the can down the road” and would bring “transformational change” to some government services, including the delivery of primary care.

“That means the services we deliver won’t look the way they did in the past,” she said.

It was not clear whether that meant an even larger infusion of spending, or potentially controversial cuts designed to avoid a deeper deficit.

The centrepiece of Holt’s campaign commitment to improve primary care was a promise to open 30 collaborative care clinics by 2028, including 10 in the coming year.

According to Liberal platform documents, that promise would cost only $3.8 million in 2025-26, an amount that would not include, for example, what doctors and nurse practitioners in those clinics would bill to Medicare.

Holt said in her state of the province speech in January that the threat of U.S. tariffs by President Donald Trump was already slowing down the pace of hiring and investment in the province.

The Liberal premier promised balanced budgets in every year of her mandate but has said the current year’s projected deficit of $398.9 million doesn’t count against that commitment because the budget had been set by the previous Progressive Conservative government.

Some of the spending contributing to that deficit this year, however, is the result of Liberal choices, including an additional $60 million for nurse bonuses and $32 million in sales-tax rebates on N.B. Power bills.

Holt’s video said the province’s dire fiscal situation was unforeseeable.

“The financial conditions in front of us are more difficult than anyone could have anticipated,” she said.

“This is not the situation we expected, but it is the one in front of us, and we have hard decisions to make. But we will not waver in our commitment to help New Brunswickers today.” 

The Opposition Progressive Conservatives say there were ample warnings that the rapid growth in population, tax revenue and federal transfers in the previous four years were unlikely to continue.

“It’s starting to slow down,” Ernie Steeves, the PC finance minister at the time, warned last September, just before the election campaign began.

The PCs also accused the Liberals of a major accounting error in the costing of their election platform, saying they double-counted $450 million in harmonized sales tax revenue when they said they’d be able to fund their promises.

The Liberal campaign team responded that a PC promise to cut the HST appeared to be based on an expected major influx of tax revenue — a “surplus surprise” the Liberals said would also cover their commitments.

That hasn’t materialized.

“They’re either going to break their promises, or they’re going to break the province keeping their promises, and that’s for them to decide,” PC Leader Glen Savoie said.

“They’re going to have to be the ones to face New Brunswickers and say, ‘We couldn’t keep our promises because we over-promised,’ or they’re going to have to say to New Brunswickers, ‘You’re going to have to pay more to get less because we kept our promises.”