New Brunswick’s auditor general is continuing to warn the provincial government about its string of budget deficits and its mounting debt level.
The province’s debt is now more than $10 billion and the provincial government’s fiscal forecast is continuing to worsen.
Auditor General Kim MacPherson said the province’s debt has grown by $3.3 billion or roughly 60 per cent since 2007, according to the latest estimates.
She said the rise in the debt is a "very disturbing trend."
"This pace of net debt growth is not sustainable in the long term, and significant changes will be required to address this problem," she wrote in her 2012 report, released on Tuesday.
"It may eventually impact the province's ability to meet its existing financial obligations both in respect of its service commitments to the public and financial commitments to creditors, employees and others."
The debt is expected to hit $10.5 billion by March 2013.
The per capita share of the debt that every New Brunswicker owes has also jumped significantly in recent years. It would cost every New Brunswick resident $13,301 if the debt were to be paid off immediately, compared to $10,162 in 2009.
The provincial government set aside $672 million in debt payments in 2012-13, which is the fourth largest item in the annual budget.
The increasing debt level could lead to even higher debt payments, the auditor general said.
A growing debt may cause credit rating agencies to further downgrade the province’s bond rating, which would boost borrowing costs.
By contrast, Nova Scotia has a $13.2 billion debt and Manitoba has a $14.5 billion debt. New Brunswick’s debt has witnessed the highest rate of growth between 2009 and 2012.
In the same period that saw New Brunswick’s debt climb 32 per cent, Nova Scotia’ debt grew 7.5 per cent.
New Brunswick and Nova Scotia both saw their debt levels rise by four per cent in the last year.
Nova Scotia, however, still has a higher debt-to-GDP ratio and debt-per-capita level than New Brunswick.
Balanced budget is 'welcome news'
The province’s auditor general had one piece of positive feedback for the New Brunswick government.
"Government’s announced plan of returning to balanced budgets by 2014-15 is welcome news," MacPherson wrote.
But that plan may be short-lived. Finance Minister Blaine Higgs projected in his March budget the province would be in a surplus situation by 2014-15.
In that projection, Higgs estimated the provincial government would run a $183-million deficit this year. That estimate has since ballooned to $356 million.
However, Premier David Alward did not commit to adhering to the balanced-budget promise during the throne speech last week.