New Brunswick’s auditor general is sounding the alarm over the province’s fast-growing debt – and calling for the release of audited financial statements before the provincial election in September.
Kim MacPherson said Tuesday she is deeply troubled by the fiscal decline – pointing to a $7-billion increase in net debt over the last 10 years.
“As I have reported repeatedly, this net debt growth is not sustainable,” she said.
The debt is expected to hit $14.4 billion by the end of March 2019, and last year the government spent $700 million in interest just to service the debt.
“If this interest cost was a department, its budget would be larger than the Department of Transportation and Infrastructure,” she said.
“If this continues, eventually governments will not be able to provide the same level of programs and services such as health care, education, roads, schools and hospitals.”
MacPherson said New Brunswick is on track for its 11th consecutive deficit, and there is no immediate plan to address the fiscal decline.
The Dominion Bond Rating Service recently downgraded the province’s rating trend from stable to negative. In a news release, DBRS stated: “New Brunswick’s 2018 budget once again delays the return to balance in favour of new spending ahead of the 2018 provincial election.”
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Meanwhile Moody’s Investor Service stated: “The stalled progression on deficit reduction is credit negative for the province which has not posted a balanced budget since 2007-2008 and is not planning a balanced budget until 2021-2022, resulting in one of one of the longest period of continued deficits among Canadian provinces following the 2008-2009 financial crisis.”
MacPherson said the rating agencies’ reaction should be a major concern to government.
Included in her review of government spending, MacPherson found in five of the last 10 years, governments overspent their budgets prior to obtaining approval from the legislative assembly.
MacPherson is calling for a timely release of the province’s financial statements in advance of the Sept. 24 election.
Just two hours before her report was released, Treasury Board President Roger Melanson issued a statement saying the audited figures will be released before New Brunswickers go to the polls, but did not give an exact date.