Finance Minister Blaine Higgs is calling the province’s growing deficit a "wake-up call" to New Brunswickers as the provincial government attempts to balance its budget.
Premier David Alward promised in the 2010 election campaign that a Progressive Conservative government would balance the budget during its mandate.
The province’s finance minister tabled an austere budget in March that outlined a series of cuts and small tax hikes and projected a deficit of $183 million.
But a faltering economy has caused the provincial government’s estimated deficit for this fiscal year to nearly double to $356-million.
Higgs said in an interview on Friday the provincial government is going to have a difficult time erasing the total deficit.
"It is not going to be easy, but I don’t use the economic downturn as an excuse. I think it is a wake-up call. We didn’t expect this would be easy," Higgs said.
"We have been very calculated. We haven’t made any real tough decisions at this point. So I guess, if we are going to [achieve] a balanced budget we have to deal with some serious issues to do it."
The Department of Finance released its fiscal update for the second quarter on Thursday. The ballooning deficit was blamed on shrinking revenues, primarily from income tax, corporate tax and Harmonized Sales Tax.
The provincial government’s expenses have also risen by $51 million, which is roughly one per cent of the overall budget.
'Time to right size New Brunswick'
Higgs said every department will be under tighter scrutiny for the remainder of the fiscal year. He said he expected to cut spending and eliminate programs that are no longer needed and he said the Department of Health will not be immune to the tough fiscal tonic.
"This is a time to right size New Brunswick, this is a time to look at health care, you have heard the minister of health talk about, we can’t afford duplication on health services," Higgs said on Friday.
When asked whether the provincial government will be looking at closing hospitals and schools, Higgs said: "All those things have to be discussed and determined."
But the finance minister specifically rejected the idea of imposing highway tolls or raising the Harmonized Sales Tax.
The Progressive Conservatives campaigned against raising taxes and any new tax hike would need to be approved through a referendum.
Instead, Higgs said the provincial government needs to look at growing the economy and encouraging more outside investment.
He specifically pointed to the shale gas industry as an area the province could tap into for additional revenue.
The finance minister admitted the idea of advancing the shale gas industry has been a controversial one in many areas of the province.
But he pointed out that many New Brunswickers are leaving the province to work in the shale gas industry in other jurisdictions.
"We have said all along that we need to look at this in a constructive and very methodological way and do this in a fashion that we are all satisfied that it works. But you’ve seen the opposition around the province: 'We don’t want to do that.' We must look at things like that," he said.