The New Brunswick government will spend more on health, education and social development over its next fiscal year, and still have a small surplus of $19 million without raising taxes, Finance Minister Victor Boudreau said Tuesday.

There will be increased funding for nursing care for seniors, and a freeze on tuition for students, he said in Fredericton, after tabling the Liberals' second budget.

Budget highlights:

The budget projects modest $18-million surplus. No tax increases, no tax cuts. The Liberal government says it will reform the provincial tax system, but not until studies and reviews are completed. Health Department spending will increase by 5.4 per cent to $2.2 billion, the biggest slice of the total budget. Money will be used to reduce wait times, provide better access. More details are to come in health plan later in year. Department of Social Development gets additional money to hire 43 new social workers, increase nursing home care, improve day care and boost social assistance rates. Tuition at four New Brunswick universities is frozen for one year, thanks to $12 million infusion of provincial funds. The province's net debt is expected to reach $7.1 billion by 2009, an increase of about $500 million from 2007.

Unlike last year, there is no income tax increase in the $7.1 billion budget, and there is no tax cut.

Boudreau said the province will try to fill gaps in the child protection system by hiring 43 extra social workers.

To pay for this, there will be cuts in several departments such as Environment and Natural Resources, and all government departments have been ordered to cut administrative costs in an effort to shave $15 million from government expenditures.

There is a major overhaul in the works for the province's tax system.

Following the recent release of the paper on tax changes, a committee will consider the recommendations, and then the government will review them.

Significant tax changes aren't expected before 2009.

Tuition fees frozen

In education, the government is ordering a tuition freeze for the coming year at the province's four universities.

Nevertheless, it means tuitions will be frozen at the second highest level in Canada, after neighbouring Nova Scotia.

"New Brunswick is the province with the lowest percentage of people who have completed at least some post-secondary education in all of Canada," Boudreau said. "That must change."

He said the government is waiting for the final recommendations from the working group on post-secondary education before making more announcements.

The government has boosted spending in the Health Department by 5.4 per cent to a total of $2.2 billion — the biggest slice of the budget — but, again, more details on spending will be contained in a health plan to be released in the coming weeks.

Big businesses stand to gain from the continued phase out of tax on capital assets, as laid out in the budget. By the end of this year, big buildings and equipment won't be taxed at all.

'Mindful of challenges': Boudreau

Last year's settlement of a lawsuit with Venezuela over the supply of Orimulsion fuel helped keep the government in the black in the fiscal year just ending.

The government reports that NB Power turned a surprising profit of $85 million, allowing the government to squeak by with a surplus of just $18 million.

"We are mindful of the challenges facing our economy, particularly in light of the U.S. slowdown and the high Canadian dollar," Boudreau said in his budget speech in the legislature in Fredericton.

"This is reflected in our revenue forecast."

Revenues are expected to grow by $185.4 million, or 2.7 per cent, from 2007-08.

The province's net debt is also expected to grow — to $7.1 billion by 2009. The total represents a roughly $500 million increase over 2007, largely due to soaring capital costs for highway improvements.

With files from the Canadian Press