New Brunswick recorded a $500.8-million surplus at the end of the last fiscal year.
That is 12 times higher than the $40.3 million surplus the province had budgeted for.
Meanwhile, net debt decreased by over $505 million during the fiscal year to $11.8 billion.
Audited financial statements for the 2023-24 fiscal year were released by the province on Monday.
Officials said increased revenue, supported by strong population and income growth, contributed to the surplus.
“We’re proud that our population has been increasing. We’ve seen the highest growth rate since Stats Canada started collecting comparable data, and that was over 50 years ago,” Finance Minister Ernie Steeves told reporters.
Expenses were $358 million higher than budgeted at the start of the year while revenue was up $858 million.
The province saw its projected surplus see-saw significantly throughout the course of the fiscal year.
It was $40.3 million at budget time, nearly $200 million in Q1, $35.3 million in Q2 and $247.4 million in Q3.
Less volatility expected this year
Finance staff with the province said this year’s fiscal situation is expected to be much less volatile than previous years.
“The current fiscal year that we’re in now, we’re just not seeing the same early signs that we saw previously,” said Todd Selby, an executive director with the Finance and Treasury Board.
“A lot of that’s got to do with the volatility coming out of the pandemic. That volatility is abating now.”
In its first-quarter update, the province projected a deficit of $27.6 million for the current fiscal year, compared to a budgeted surplus of $40.9 million.
Selby said the final figures from 2023-24 do not change what the province is projecting for the current year.
“Yes, the economy is maybe starting to slow down somewhat, but compared to where we thought we were at budgeted, it is holding up much stronger than we had expected,” he said.
Questions about promised HST cut
The finance minister faced questions about his government’s plan to cut the HST by two percentage points during Monday’s media availability.
It is expected the move would lower government revenue by around $450 million per year.
“The financial management that we’ve done over the last six years has given us the leeway to be able to move forward with this,” said Steeves.
“It’s just another way to help New Brunswickers with affordability measures right down the line.”
Steeves said he believes the government will have no issue finding the money needed to pay for the tax cut.
“We’ll find programs that are ending, we’ll find programs that need to be adjusted and we’ll find ways to help out with affordability measures that help New Brunswickers,” he said.
“We’ve got some ideas of where we’ll go with that. I’m not prepared to talk about them right now, but yes, we’ve planned ahead.”
Steeves said while last year’s surplus does not represent cash on hand, it reduces deficits accumulated in the past and provides more financial flexibility in making future tax and spending decisions.
Liberals not surprised by surplus
Meanwhile, the Opposition Liberals said they are not surprised by the large surplus figure.
Finance Critic René Legacy said this is not just a one-off for the Higgs government.
“When you start looking at numbers that are 12-and-a-half times what was projected, how do you start putting any kind of credibility behind what somebody says at the beginning of the year,” Legacy told reporters.
As for the current fiscal year, he expects the projected deficit will turn into a surplus by the second quarter.
Legacy said a Liberal government would address the significant variances in the provincial budget.
But he added he is not sure yet what the fix is without having a more detailed look at the budget process.
When it comes to the HST cut being proposed by the Progressive Conservatives, Legacy said he suspects they feel the revenue is probably there.
“Unless one of you has heard Blaine Higgs say that he’s willing to go back into deficits, he’s got to feel comfortable that he’s either going to have the revenue or he’s willing to cut some programs,” he said.
“If he’s willing to cut some programs, then he’s got to be honest with New Brunswickers and say which ones.”
