New Brunswick’s projected deficit has almost doubled to $356 million because of falling government revenues, Finance Minister Blaine Higgs announced on Thursday.
The only way out of the fiscal hole, he warned, is more cuts.
The provincial government released its second quarter fiscal update, which indicated the estimated deficit has grown $173 million in the last six months.
Higgs had projected a $183-million deficit in the March budget.
'The economy is slowing across the country and we aren't immune to that.'—Finance Minister Blaine Higgs
“Lower than projected revenues have had a significant impact on our original budget forecast of a $183-million deficit,” Higgs said in a statement.
“While these decreased revenues may not have been foreseeable, they cause shortfalls which need to be addressed by focusing on reducing spending and living within our means.”
The finance minister pinned the blame for the rising deficit on the $110 million revenue loss from income tax, corporate tax and Harmonized Sales Tax.
"The economy is slowing across the country and we aren't immune to that," Higgs told reporters. "Our projections of growth are significantly down from where we were."
The provincial government’s expenses have risen by $51 million, which is roughly one per cent of the overall budget.
Higgs said every department will be under tight scrutiny, expected to cut spending and eliminate programs that are no longer needed. That will be especially true for the Department of Health, he said.
"That's 40 per cent of our budget so it has to be a focus area on what we can do in that category."
Donald Arseneault, finance critic for the Opposition Liberals, called the projected deficit "disappointing.
"We just can’t cut our way to a balanced budget," Arseneault said in a statement. "We need to grow the economy.
"We are losing jobs monthly and now stand at 11 per cent unemployment. We all need to work to turn this around now. David Alward needs to make this his top priority. What the government has been doing isn’t working."
NDP Leader Dominic Cardy contends the deficit proves the Alward government's inability to manage the province in a time of crisis.
"This government is out of control," Cardy said in a statement. "The deficit has doubled, Radian6 and VAS are cutting jobs despite government handouts, and the [Progressive] Conservatives are wasting money on failed schemes like the lottery game GeoSweep."
The New Democrats would put public services first and get the economy going with investments in innovation, education and an efficient tax and regulatory regime, Cardy said.