Premier David Alward's Progressive Conservative government will introduce its first throne speech on Tuesday amid revelations of a worsening fiscal situation.


New Brunswick Finance Minister Blaine Higgs told the Saint John Board of Trade on Monday the province must take urgent action to avoid a deficit that hits $1 billion.

Lt. Gov. Graydon Nicholas will deliver the speech on Tuesday afternoon that will set the tone for the first year of the Alward government's agenda.

The Tories campaigned in the fall election on boosting access to childcare, cracking down on distracted drivers with new legislation and engaging citizens in the democratic process.

Shortly after winning a massive majority government in the Sept. 27 election, the Progressive Conservatives were confronted by an unemployment rate that was hovering close to 10 per cent and had its economic outlook downgraded by Standard and Poor's, the international bond-rating agency.

Finance Minister Blaine Higgs began laying the groundwork for a tough first year during a Monday speech in Saint John where he warned the province's deficit could hit $1 billion unless dramatic changes are made.

'I think they've been very clear that they've said they won't raise taxes and they need to hold themselves to account for that.' — Kevin Gaudet, Canadian Taxpayers Federation

The finance minister also said the current deficit has surpassed $800 million on a $7-billion budget deficit. The province's debt stands at $8.35 billion and is forecast to hit $9.5 billion in 2011 and $10.2 billion in 2012.

Higgs told the business leaders at the Saint John Board of Trade that they should prepare for government cuts and maybe some tax increases.

"Outside of where we have made commitments in our platform everything is on the table to look at," Higgs said.

The Progressive Conservatives promised during the election campaign that they would halt the planned corporate income tax cuts and stop the proposed tax cuts on citizens earning more than $118,000.

But Higgs wouldn't say if he feels loopholes in the party's election platform give him freedom to raise things, such as the gas tax.

Kevin Gaudet, the federal director of the Canadian Taxpayers Federation, said the Alward government should avoid using the tax system to solve the fiscal problem.

"I think they've been very clear that they've said they won't raise taxes and they need to hold themselves to account for that," Gaudet said.

The Tories have taken off the table the possibility of increasing the Harmonized Sales Tax.

The Alward government has already demanded that every department, with the exception of the Department of Health, cut its budget by one per cent in the current fiscal year and prepare for a two per cent reduction.