N.B. grossly underestimates budget surplus — again

The New Brunswick government has once again vastly underestimated its budget surplus. 

In March, Finance and Treasury Board Minister Ernie Steeves estimated the budget surplus at about $40 million. On Monday, he said projections for the 2023-24 fiscal year show a surplus of $199.6 million. 

But Steeves said Monday that he's treating the surplus cautiously. He said he's not seeing the same early signs of windfalls that were seen in the last few years.

Last year at this time, the government projected a $135.5 million budget surplus for the 2022-23 fiscal year, which eventually ballooned to $882 million, while the projected deficit of nearly $250 million in 2021-22 turned into a $777-million surplus. 

Liberal MLA and finance critic René Legacy said he's not as concerned about the government's inability to accurately predict surpluses as he is about its lack of planning. 

Once a surplus is predicted in the spring, he says officials should immediately begin talking about how to spend that money.

"Yet what we're hearing is, 'Well, we'll start discussing it in the weeks to come.' This isn't new. This has been happening pretty much since they got elected," said Legacy on Monday after the government's announcement. 

Economist Richard Saillant said he fully expects the projected surplus to grow beyond $199.6 million, which is what happened with projections made last summer when a conservative estimate ended up being a record $882 million. 

"It looked somewhat as a repeat of the scenario from last year, but I'm not willing to claim at this point that we'll end up with another record surplus. But I do feel that … the year-end surplus that is currently being forecasted is probably on the conservative side."

Saillant said regardless of the size of the surplus, the province has ample flexibility to invest more in health, education, housing and to address the cost of living crisis.

"We could have started spending more as soon as the pandemic hit us. We were the province that spent the least on pandemic relief in Canada — by far. And we have improved our fiscal position — the fastest-ever witnessed in history and the fastest among Canadian provinces. We are now the least indebted province east of Saskatchewan."

Speaking to reporters after the release of the quarterly report, Steeves defended the ballooning surplus. He said with a $12.2-billion budget, he's satisfied with being off by 1.6 per cent.

 "It's an honest try to be as accurate as possible, and I think 1.6 off is certainly understandable," said Steeves.

According to documents released by the province on Monday, total revenue is projected to be $151.3 million higher than budgeted, while total expenses are projected to be $8.1 million lower.