New Brunswick’s projected surplus for the 2022-23 fiscal year continues to grow.
In its third-quarter update, the province is now projecting a surplus of $862.6 million.
That is an $88 million increase over the last quarterly update and more than 24 times higher than the initial budget surplus of $35.2 million.
Finance Minister Ernie Steeves said the latest results “reflect continued strength in the provincial economy.”
“Our economy has recovered much faster than expected and population growth has set new records. These factors have contributed significantly to the improved results for our tax revenues,” Steeves said in the latest update.
“These circumstances are similarly reflected across the country with governments showing significant revenue improvements.”
Revenue, expenses both higher than expected
According to the update, revenue for the 2022-23 fiscal year is now projected to be more than $1 billion higher than budget.
Most of that is due to significant increases in corporate income tax (+$468.2 million), personal income tax (+$423 million) and harmonized sales tax (+$130.4 million).
Expenses are also projected to be higher than expected to the tune of $240.2 million.
According to the department, this is due to higher expenses in several departments, including health; post-secondary education, training and labour; natural resources and energy development; and social development.
The record surplus will help bring the province’s net debt down by $749.5 million to $11.6 billion.
“We know these important tax revenue results won’t last forever and we need to be prepared for a showdown on the horizon,” said Steeves.
New fund to generate investment income
While announcing the higher surplus, Steeves said the province has also earmarked $300 million to help generate investment income.
Provincial officials will use the interest generated from the “New Brunswick Advantage Savings Fund” to fund future initiatives.
The fund will produce an estimated $13 million annually “for initiatives like affordable housing, innovation in the delivery of public health care and education, and vibrant and inclusive communities,” said Steeves.
Staff said the province will use cash it has on hand to fund the investment.
‘Not much to see’ in update: Liberals
The Opposition Liberals are not impressed with what they saw in the province’s latest fiscal update.
Finance critic René Legacy said there was “not much to see” in the update, which he said lacked creativity.
Legacy said there were no new significant investments to addressing the growing needs of New Brunswickers and the population growth we are experiencing.
“Instead what we got was an announcement for a $300-million smoke show that’s a savings account that is essentially just a treasury exercise. It’s liquidity that they’re managing, that they always do anyway,” he said, referring to the New Brunswick Advantage Savings Fund.
Legacy said the province is equipped to move forward and should be investing in its future and growth.
As for the surplus, the finance critic said the government continues to underestimate what it is going to be.
Legacy said he expects we will end the fiscal year in March with a surplus of over $1 billion.
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