The New Brunswick government is revising its budget deficit upward by almost 22 per cent, adding that “unstable trade conditions” and poor weather are casting a shadow over the province’s finances.
The province said its deficit is now projected to be $668.7 million for the 2025-26 fiscal year, up from the $549 million forecast in the March budget. Revenues are expected to be $59.6 million lower than forecast in the budget, and expenses are projected to be $60 million higher than the March estimate.
The government estimates the province’s GDP will grow by 0.9 per cent for the year — lower than the private sector forecast average of 1.2 per cent.
Finance Minister René Legacy attributed the increase in spending to higher costs in health and long-term care, seniors, and child and youth welfare.
“We will not sacrifice investments in health and social development or addressing the very real affordability challenges New Brunswickers are facing in favour of only satisfying the bottom line,” he said.
The U.S. tariffs imposed on some Canadian goods are negatively affecting the province’s economic outlook, he said, adding that the effects are still unclear.
“We’re still very cautiously monitoring. We should have a better picture about the impact that tariffs and trade will have on our projections as we progress in the second and third quarters,” he said.
“Anecdotally, we certainly hear that … industry and companies are very cautious in investing and moving forward because they just don’t know what to expect in the months to come.”
Legacy said the government is also keeping a close eye on how much weather events, such as wildfires, will cost the province.
John Herron, natural resources minister, said Monday the wildfires have grounded the province’s forestry sector to a halt. There are mills on the verge of running out of wood after the government banned forest harvesting amid extreme wildfire risk, he said.
About 25 square kilometres of forested land have burned or are expected to burn so far. Giving a ballpark estimate, he said the amount of forest lost to fire represented about $10.5 million in direct and indirect taxes from the forestry industry and about $42.5 million in lumber revenue to sawmills.
On Tuesday, Legacy told reporters the full impact of the wildfires will be known once they are put out. “At this moment, it’s still within the boundaries of what we had budgeted.”
The government is also concerned about the drought-like conditions gripping Atlantic Canada.
“God willing, we’re not going to have more hurricanes or ice storms but the year is still very early.”
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