N.B. announces surplus 5 times original projection, now at $199.6M

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N.B. government fiscal update now has $200M surplus
The New Brunswick government has released its fiscal update with a surplus of nearly $200 million. But the massive surplus is in part due to unused disaster assistance funding. Nathalie Sturgeon reports. – Aug 28, 2023

A surplus announced Monday by the New Brunswick government is nearly five times what it was projected to be – sitting at $199.6 million.

It was projected to be $40.3 million.

The province said the higher-than-expected surplus is due to conditional grant agreements with the federal government and disaster financial assistance funding tied to climate change.

Staff with the Department of Finance and Treasury said the conditional grants are related to labour market and workforce agreements, but couldn’t provide much clarity on what those are.

“So in the case of those two sources of revenue, really, there were dollars that were there last year that didn’t get spent,” explained Todd Selby, the director of fiscal, economic and statistical analysis for the department.

About 80 per cent of the surplus is tied to HST revenue, personal income tax and the conditional grants, according to staff with the department.

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A breakdown of the numbers

New Brunswick saw its revenue increase by 1.2 per cent, at $151.3 million. It saw expenditures fall under budget by $8.1 million.

HST revenue is up $40 million, as is personal income tax revenue. Insurance Premium tax has increased by $9.2 million. The government’s special purpose account is also up at $8 million, mainly due to new funding under the Private Woodlot Sustainability Fund.

The revenue for the province is up due to the service of the public debt being under budget by $53.6 million. Opportunities New Brunswick is under budget by $10.8 million, mainly due to lower-than-expected disbursements for financial assistance and productivity programs.

Post-Secondary Education, Training and Labour is over budget by $29.9 million due to “increased demand and the receipt of additional federal funding in the Working NB program as well as costs to implement the New Brunswick Housing Strategy.”

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Deputy Minister Nick McCann said Justice and Public Safety (JPS) is over budget by $16.9 million, mainly due to expenses incurred under the Disaster Financial Assistance program primarily associated with hurricane Fiona.

The cost to clean up disasters also extended to the Department of Natural Resources and Energy Development, which is over budget by $5.5 million, tied to fire suppression costs, maintenance and environmental protection activities at the Restigouche and Caribou mine sites.

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Disaster and climate change money

The province has seen significant rainfall much more frequently this summer, including a massive flash flood in the Madawaska region.

The Bocabec and Chamcook forest fire burned hundreds of hectares of land and turned one family home to ash.

About $13.9 million of the overage for the JPS was for hurricane Fiona, which wreaked havoc on the southeastern coast of New Brunswick in September 2022.

The Canadian Hurricane Centre is predicting 12 to 17 named storms this season, with five to nine hurricanes and four major hurricanes.

Only two hurricanes became major in 2022, Fiona and Ian.

When asked why money for disaster financial assistance and climate change was being added to the surplus while the province was also spending millions to react to the climate change-based natural disasters, Finance Minister Ernie Steeves said “it’s hard to predict what’s going to happen next with the environment.”

“There are environmental situations right across the planet,” he said, speaking to reporters on Monday. “We are helped a great deal through the feds; the federal government helps with disaster mitigation. We’re getting it out there as quickly as we can. If somebody is able to tell us what events are coming up, we will absolutely try and stall any kind of damage to the Brunswickers.”

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The budget document released on Monday doesn’t show how much of the surplus was for disaster financial assistance.

Liberal finance critic René Legacy says the inconsistency and lack of transparency on the budget numbers, especially as it relates to climate change, is something the party wants to hone in on.

“It’s always been a concern of ours that  … we’re not using those climate change funds to their best use,” he said.  “I forget the exact number of how many years that fund has been (under) budget. Money hasn’t been used. They’re still not budgeting to the point where they’re going to start using that excess.”

Legacy wouldn’t say directly whether he’s lost confidence in the government’s predictions, which have been largely off for several consecutive fiscal updates but said neither the Premier nor Finance Minister would answer him directly on whether they’d commit to funding some of the excess surplus into helping New Brunswickers.

“They’re still not committing to getting that money where it’s needed,” Legacy said.

New Brunswick Green Party finance critic Kevin Arseneau was also quick to call into question the government’s desire to project on finer margins.

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“They bring in austerity budgets where, you know, we’re investing as much as we can,” he said. “And then they have an excuse during that period of time, to do their communications, work around their budget, and then the surpluses accumulate afterwards,” he said. “My concern isn’t necessarily with their capacity to forecast it, it’s actually with the dishonesty in which they are forecasting it.”

Arseneau said New Brunswickers can’t wait for the government to decide to use the money intended for disaster mitigation or climate change adaptation.

He said farmers are experiencing crops rotting in the ground due to excessive rain, threatening the province’s ability to produce its own food separate from the external supply chain.

He said that while there has been no direct loss of life in New Brunswick through the many major disasters in the last 12 months, climate disasters come at a significant cost.

“I’m pretty sure we could look at different situations and say that it is impacting the health of New Brunswickers and so it is adding many impacts on our life day in, day out. They are not all in our face but they are definitely there,” he said.

The department couldn’t definitively say whether this was the largest first-quarter surplus projection, but said it could be among the highest in the province.


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