The Progressive Conservative government will not balance the provincial budget before the next election, Finance Minister Blaine Higgs said on Thursday night.
The Opposition Liberals are demanding an explanation, calling the finance minister's announcement "completely unacceptable."
Premier David Alward had committed to bringing the province’s books back into balance during the 2010 election and had reaffirmed that promise as recently as last March’s budget.
But that commitment was left out of November’s throne speech as the province’s fiscal situation continued to deteriorate in the fall.
The provincial government is continuing to forecast slow economic growth and a series of one-time expenditures is forcing the government to abandon its balanced budget pledge.
"When I say it is a budget that counts, if we are going to be able to turn around the realities of our fiscal situation and we are going to be able to move forward in that direction and that direction is not going to see us balanced in two years. We are not going to make that goal," Higgs said in Saint John on Thursday, during his first pre-budget meeting.
"But we need to make sure that we don’t fall further into the hole that we can start this recovery, even if it is a modest process, it is recovery. I just don’t see us having any choice to do that."
The finance minister said low interest rates are giving the provincial government some breathing room in order to make the financial reforms. But he said continuing to pay $672 million a year in interest payments on the debt is not sustainable.
"This government claims to be fiscally responsible, but it has squandered taxpayer dollars at every opportunity," Liberal MLA Hédard Albert, the opposition's finance critic, said in statement.
"The finance minister has been preaching wants versus needs for more than two years, but it seems this government does what it wants rather than giving New Brunswickers what they need."
He cited the $47 million in property tax breaks, an increase in the size of cabinet, alleged patronage appointments to high-paying jobs, and a $2-million payout to former energy minister Margaret-Ann Blaney as examples of "wasted taxpayer dollars."
"Premier Alward promised to balance the books, but it has become increasingly obvious that they have no plan to make that happen," said Albert.
The Progressive Conservative's 2010 election platform stated the Tories had "a comprehensive and sound plan to bring order and stability back to our provincial finances without raising taxes or reducing services."
"New Brunswickers are tired of struggling to make ends meet while watching the Alward government run our province in the ground," said Albert.
The province's debt is now expected to hit $10.5 billion by March. Payments on the net debt represent the fourth largest provincial expenditure in the budget, behind Health, Education and Social Development.
Higgs had projected a $183-million deficit for 2012-13 back in March, but declining revenues pushed that deficit target up to $356 million last fall.
The finance minister said on Thursday that he does not have much hope the numbers will be turning around significantly when the third quarter fiscal update is released.
The Alward government axed retirement allowances for civil servants last week, a move that will eventually save $47 million. But that cost-savings initiative will cost the provincial government money in the short term.
There are other changes the provincial government is making that is hindering the deficit-fighting plan.
"We’ve gone off of our projections based on certainly the slower growth in the revenue, which we are off significantly," he said.
"We are making some major sustainable changes, long-term benefits that will be seen in time on the pension plan, but it will be one time hits and liabilities. It will hit us hard."
The finance minister’s pre-budget tour started in Saint John on Thursday night. New Brunswick finance ministers are required by law to consult with the public prior to the March budget.
Higgs received many suggestions on where to make cuts and how to bring in more money.
Citizens told the finance minister to get rid of the Atlantic Lottery Corp.’s GeoSweep game, eliminate some of the province's boards and commissions and taxing pop.
"If you taxed it two cents an ounce, one cent an ounce, it would be all new revenue for the government," said one speaker.