Finance Minister Greg Byrne said the deficit was unavoidable. (CBC)

Audited financial statements for New Brunswick show a slight reduction in the expected deficit for last year, but the province remains in the red.

The financial statements released Friday by the comptroller's office pegs the deficit for the fiscal year ending March 31, 2010, at $737.9 million, or about $3 million less than had been budgeted.

"It's unfortunate that we're carrying such a large deficit, but given the fact that we're working to help our province and the economy recover from the economic downturn, frankly it is unavoidable," said Finance Minister Greg Byrne.

The audited figures show that revenues for the year were $107.4 million lower than expected, while spending was $110.4 million lower than budgeted.

Byrne said revenues were down primarily due to a write-down of the Dalhousie generating station as a result of NB Power's decision to decommission the plant.

He said expenses were lower because higher than expected investment returns helped cut pension expenses by more than $173 million.

New Brunswick's net debt at the end of March was almost $8.4 billion, or more than $11,000 for every man, woman and child in the province.

Byrne said he's pleased the deficit was less than expected, but there is a lot of work to do to return to balanced budgets.

He said the Liberal government has committed to holding spending growth to one per cent for each of the next four years.

"Holding spending growth in check is critical to achieving balanced budgets, but we won't achieve balanced budgets by curbing spending alone," he said. "We need to grow revenue by growing the economy."

'Out of control'

Craig Leonard, the Conservative candidate running against Byrne in the Sept. 27 provincial election, said the audited finances show the Liberal economic strategy has failed.

"It just confirms what we've known for the last year: that the government spending is out of control and their  economic policies are not growing the economy at the rate that they'd like everyone to think that they are," he said Friday.

He said a Conservative government would look at other options, starting with the elimination of "government waste."

"We've got a parallel bureaucracy running in the province where you've got consultants doing the work of the civil service and it's costing us an arm and a leg," he said. "We've got to make changes, there's no question about it."

Leonard said a Tory government would try to avoid tax increases.

The release of the audited figures was about a month earlier than usual, but Byrne said it was important to get them out well in advance of the Sept. 27 election.