New BrunswickIn its first full year in power, Premier Susan Holt’s Liberal government is on track to run an even bigger budget shortfall than projected. The expected $668.7-million deficit is almost $120 million more than projected in March.Province now expected to run $668.7M deficit in 2025-26Jacques Poitras · CBC News · Posted: Aug 19, 2025 8:27 AM EDT | Last Updated: 11 hours agoPremier Susan Holt’s Liberal government will run a deficit that is almost $120 million more than forecast in March. (CBC News)The Susan Holt Liberal government is on track to run an even bigger budget deficit than projected in its first full year in power.The deficit is now projected to hit $668.7 million this year, almost $120 million more than Finance Minister René Legacy forecast in his first budget in March. The Liberals promised in last year’s election to balance the budget but said after taking power that a drop-off in population-boom-fuelled tax revenue made that impossible in their four-year term.Legacy could not say Tuesday when he expects the budget to be balanced.”Good question,” he said. “My hope is for as soon as possible, but obviously with the current climate and situations that we always live in, we have to adapt.” WATCH | ‘We’re building the plane as we’re flying it,’ minister says of increased spending: Holt Liberals’ budget deficit jumping to $669 millionMore spending, less revenue cited as deficit forecast rises $120 million since March. That additional shortfall is because the government expects to spend $60 million more than planned this year, and to bring in $59.6 million less in revenue, according to a first-quarter fiscal update Legacy released Tuesday.Legacy said some of the spending will be for the short term, to redesign key government services so that they’re less expensive in the long run.”What’s the saying? We’re building the plane as we’re flying it,” he said.Finance Minister René Legacy couldn’t say when he expects the New Brunswick budget to be balanced. (Isabelle Leger/CBC News )”As we start transforming, we continue to give the service. We can’t just put a pause on health and social development. We have to continue to offer the services as we are transitioning.”He said there are “some positive signs that we are going to start seeing some of that turn around” as the government adopts new ways to deliver services, but he wasn’t specific.Lack of timeline a worry for PCsPC Opposition critic Don Monahan said he was alarmed that there’s no timeline for returning to balanced budgets.”The question is when? It’s been clearly identified it’s not going to happen in this mandate. Is it going to happen past 2028?” he said.”It’s really a big question, and at the end of the day, who’s going to be held accountable?”Some of the higher-than-expected spending includes $93.7 million in areas such as child welfare and youth services, social assistance, and seniors and long-term care, and $39.1 million in higher spending by regional health authorities.Those increases are partly offset by lower-than-predicted spending in some other areas.The higher-than-forecast social spending includes $35 million more in child and youth services, which validates criticism of the Liberal budget by Child and Youth Advocate Kelly Lamrock.In April, Lamrock pointed out in a report that the $208.3 million initially budgeted for child welfare services this year fell short of the $231.9 million spend on those services last year. Green leader sees ‘false budget’ as problem”They made a huge mistake in their budgeting in trying to minimize some of their budget lines,” Green Leader David Coon said Tuesday of the increased spending.”They simply set the budget this year at the level the budget was set last year, rather than reflecting what was actually spent last year in those areas where you can’t cut corners, like child welfare. It was sort of a false budget that way.” Mohanan wouldn’t say if the PCs would have spent $35 million more on child welfare if they had been in power.The decreased revenue includes a $16.2-million shortfall due to lower earnings at N.B. Power. Legacy said the government has barely touched a $50 million contingency fund it set up to provide relief from the impact of U.S. tariffs.So far, the only expenditure has been $186,000 to increase ferry service between Campobello Island and the mainland so residents can avoid having to travel via the U.S.The fiscal update shows New Brunswick exports were down 1.5 per cent as of July 31 compared with last year.Legacy said it’s hard to tell so far whether that’s attributable to the U.S. tariff threats, but there are signs that requests for funding will “start creeping up. … We anticipate more requests coming very soon.”If the entire contingency fund is spent, that would send the budget deficit even higher, to $718.7 million, according to the update.ABOUT THE AUTHORJacques Poitras has been CBC’s provincial affairs reporter in New Brunswick since 2000. He grew up in Moncton and covered Parliament in Ottawa for the New Brunswick Telegraph-Journal. He has reported on every New Brunswick election since 1995 and won awards from the Radio Television Digital News Association, the National Newspaper Awards and Amnesty International. He is also the author of five non-fiction books about New Brunswick politics and history.
Holt Liberals projecting larger-than-forecast deficit this year
