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Finance Minister Blaine Higgs said the provincial government must pay down its debt. ((CBC))

The New Brunswick government cannot afford to let up on its spending restraint even after the provincial deficit has been eliminated, according to Finance Minister Blaine Higgs.

Standard and Poor’s Rating Services downgraded New Brunswick’s credit rating to AA-minus from A-plus last week.

Higgs said the agency’s decision to downgrade the province’s credit rating shows the need to tackle the province's massive debt.

The province’s debt is expected to reach $10.8 billion by the end of the fiscal year.

Higgs said it will be important to build debt payments into the budget after 2014, when the Progressive Conservatives expect to have the deficit eliminated.

"You make a debt repayment as part of your overall budget plan, and you get agreement on that, so the public sees it, no matter what government is there, they see it as a plan going forward," he said.

The New Brunswick government does pay a minimum amount every year on its debt costs.

In the latest budget, $672-million was set aside for service of the public debt, which is the third highest government expenditure after the department of health and the department of education and social development.

New Brunswick’s debt has skyrocketed in recent years because of a series of major infrastructure projects, such as the twinning of the Trans-Canada Highway.

‘Debt is increasingly … important’

New Brunswick’s deficit is expected to be $183 million by the end of 2012-13, according to the latest budget.

The provincial government’s plan is to have it eliminated in 2014, but a credit rating analyst said the plan must go further.

Mario Angastiniotis, an analyst with Standard and Poor’s, said many governments eliminate their deficits and then start spending again without paying off their accumulated debt.

"Once you achieve balance, that's great, but I think from our perspective the debt is increasingly more and more important," he said.

Angastioniotis said Standard and Poor's could eventually upgrade New Brunswick's outlook from "stable" to "positive" if the province makes a serious attempt to tackle its debt.