New Brunswick is deficit free this year and will have balanced budgets over the next two fiscal years, Premier Blaine Higgs announced Thursday night.
The new progressive conservative premier used his first address on the state of the province to reveal that his administration managed to eliminate a projected deficit of $ 131 million in the current fiscal year 2018-19.
This despite taking power on November 9, more than in the middle of the year.
He said that the 2019-20 budget, to be presented in the legislature on March 19, will also be balanced.
This means that Higgs is meeting its goal of eliminating the deficit two years earlier. In last year's provincial election campaign, he promised a balanced budget in 2020-21.
"We wanted to show that we could solve the problem here in New Brunswick with the tremendous workforce we have in the civil service working for us every day," Higgs said in his speech at a dinner hosted by the Fredericton Chamber of Commerce.
"If larger transfer payments arrive, we will have the happy choice to reduce taxes, pay off debts, or improve our education system."
In his November throne speech, the CP government promised to eliminate small business tax and so-called "double property tax" on secondary properties – but Higgs said that would not happen until the deficit was over.
The government's capital spending plan in December canceled more than $ 200 million in infrastructure works planned for next year.
This included a new court planned in Fredericton, a new New Brunswick Museum in Saint John and a new school in the western end of Moncton.
The previous Liberal government had a surplus of $ 67 million in 2017-18 but projected a deficit of $ 188 million for the current year, a projection that was updated to $ 131 million last year.
Fears of credit rating
Higgs said his top priority as prime minister is to eliminate the deficit as quickly as possible to prevent credit agencies from downgrading the province's credit rating. A lower rating would force the province to pay higher interest rates on its accumulated debt, which is now above $ 14 billion.
"A downgrade in our overnight credit means we spend hundreds of millions more to borrow money – and to repay the debt we already have," he said in the speech.
The prime minister repeated his now familiar message that he will avoid the temptation to spend money on taxes to make him and his government more popular – although he has not mentioned the cancellation of this week's Games of the Francophonie.
"We've already avoided some of the typical political games," he said. "Generally, a new government runs all its projects and spending in the first year, so they can accumulate a larger deficit and blame it on the past government.
"We did not do that," he said. "We sent a clear message to credit rating agencies and investors, tracking spending this fiscal year."
He contrasted this with the previous Liberal government, which said it raised spending by $ 1 billion over four years without any improvement in literacy rates, poverty rates or surgical waiting times.
Do not give up energy east
Now, Higgs said, he is challenging New Brunswickers to embrace "a smaller and more responsive government," but also "a greater sense of citizenship" that focuses on the province's long-term prosperity.
He also suggested that he will use New Brunswick's geographic position as a lever to persuade Quebec to support the rebirth of the canceled Energy East pipeline.
Noting that Quebec is seeking new transmission lines that would allow the sale of its hydroelectricity to the United States, Higgs said that allowing electricity to pass through New Brunswick "will not be a one-way exchange."
"If the provinces want access to our networks, or our territory, to move their idle assets, I will expect their equal concern for our economic future," he said.
Higgs also said that the province will reform social assistance so that the rules are not too rigid for people new to the system or "tolerant of those who have been in the system for years."
This could include the government helping pay for the travel of welfare people in outlying communities so they can get to workplaces where there is a shortage of staff. It may also mean helping with child care or housing.