The New Brunswick government has reduced its projected deficit after the first quarter, but is dipping deep into its contingency fund to offset increased spending and lower-than-expected revenues from NB Power.
The projected deficit for 2016-17 is now as much as $342.4 million – down $4.6 million from the figure included in the budget in February.
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Treasury Board President Roger Melanson says while expenditures in planned provincial programs are down, participation in new federal-provincial infrastructure projects increased spending by $25.7 million.
Melanson said his government underestimated the size of the infrastructure programs.
“We had planned for some, but we didn’t know at that time the magnitude or the significant dollars that would be invested from an infrastructure point of view,” he said Tuesday.
“I think the good news in here is that there is more investment happening in the province of New Brunswick in partnership with the federal government and in partnership with some municipalities. That will create some jobs.”
Revenues are up $6.4 million from budget, mainly because of a $40 million increase in federal transfers.
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But Melanson said lower-than-expected revenues from NB Power have prompted the government to dip into its contingency fund.
“Because this revenue shortfall from NB Power is likely non-recoverable, and increased federal revenues are offset by increased expenditures, the government has decided to draw down its contingency reserve by $20 million.”
He said the drop in projected income at NB Power is mainly due to lower export sales, loss of in-province industrial load and additional maintenance at the Point Lepreau nuclear power plant.
The minister said a meeting has been scheduled with NB Power officials to see how revenues can be improved.
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