Expenses Up, Revenue Down In Third-Quarter Report

The provincial government is seeing a drop in revenue and an increase in expenses, according to their third-quarter fiscal and economic update.

Revenue for the 2020-21 fiscal year is expected to be $19.7 million lower than budget which the government attributes as the effects of COVID-19.

Expenses are projected to be $85.4 million higher than budget, some of which will be offset by federal revenue.

Finance and Treasury Board Minister Ernie Steeves said the focus is on safely restoring the economy and ensuring the health and safety of New Brunswickers.

“With the emergence of new variants of the virus there remains a high degree of uncertainty in the outlook and we must continue to be prudent and vigilant in managing our finances,” said Steeves.

Officials are now projecting a deficit of $12.7 million compared to a projected surplus of $92.4 million. The province’s net debt is expected to increase by $209.9 million from budget.

The report notes that

• revenue generated by the Tobacco Tax is up by $15 million due to “higher than anticipated volumes”.
• the unbudgeted and unplanned fall election cost the province $8.1 million.
• the special operating agencies revenue is down by $18.2 million due to project delays and  “lower than anticipated fees collected from Hopewell Rocks”.
• Personal Income Tax revenue is down $89 million because of lower projected taxable income for 2020 and 2021.
• Health expenses are over budget by $103.1 million,
• Justice and Public Safety are over budget by $42 million
• Post-Secondary Education, Training and Labour is $8.7 million under budget

Because of federal funding, the third quarter shows revenue of $88.2 million higher than budget.

Total actual expenses for the quarter are $152.2 million lower than budget due to reduced activities because of COVID-19 across various departmental programs.

Real GDP growth for New Brunswick is projected to be -3.9 per cent for 2021 according to the Department of Finance and Treasury Board.