Opinion: Disastrous budget threatens N.B.’s economic future
Residents should demand better after Liberals deliver ‘a clear threat to the province’s economic future’
Alex Whalen and Grady Munro, Published Mar 17, 2026
Not long ago, New Brunswick was among Canada’s fiscal bright lights. The provincial government had a string of balanced budgets, declining debt as a share of the economy, and the top-ranked fiscal performance in Canada.
Less than two years into its term, the Holt government has erased this record and its new budget, released Tuesday, is a clear threat to the province’s economic future.
During a time of fiscal backsliding across the country, New Brunswick might well lead the country in debt and deficits this budget season.
The headline numbers jump off the page. This year the government will increase spending by $822-million, run a $1.4 billion deficit (the largest nominal deficit in provincial history) followed by back-to-back $1.3 billion deficits over the next two years, with no plan to get anywhere near a balanced budget by the end of Premier Susan Holt’s term.
As a result, the government’s debt will spike, increasing by nearly $2 billion this year, with a total increase of nearly $6 billion from 2025/26 to 2028/29. For context, New Brunswick’s string of balanced budgets between 2017/18 and 2023/24 resulted in nearly $2.5 billion in debt reduction (along with accompanying reductions in debt interest payments), all of which is now gone, and then some.
In his speech on Tuesday, Finance Minister Rene Legacy claimed this spending splurge “is consistent with what we are seeing across the country.” But that’s not true.
To date, there have been three other budgets delivered across the country. Alberta’s budget delivered a deficit of 1.9 per cent of the economy, while Nova Scotia’s budget, which itself was considered spendthrift, projects a deficit of 1.7 per cent of the economy.
At 2.7 per cent of the economy, New Brunswick’s deficit is only on par with British Columbia (2.9 per cent), which itself is pursuing a historically reckless fiscal plan.
Only one budget deficit in the Maritimes in the past 30 years exceeds this year’s New Brunswick deficit (Nova Scotia in 2000).
Why should New Brunswickers care? For three main reasons.
First, the spike in debt will force up debt interest costs. New Brunswickers will pay $860 million this year just to service the government’s debt, a $120 million increase over last year. If the government’s effective interest rates remain the same (a conservative assumption), debt interest will exceed $1 billion a year by 2028/29.
As debt interest consumes more and more revenue, the government may be forced to divert money away from other priorities to finance its debt.
Second, whenever a future government tries to clean up this fiscal mess, this approach increases the likelihood it will need to raise taxes. New Brunswickers already face some of the highest personal income and business taxes in North America. Tax hikes will have a dampening effect on the province’s ability to attract talent and capital, and will lead to slower economic growth.
Third, the budget compounds some of New Brunswick’s bigger-picture risks. For example, the debt associated with NB Power is ultimately the responsibility of New Brunswick taxpayers, given NB Power is a Crown corporation. Under this fiscal plan, the province will have far less ability to backstop NB Power’s debts, increasing the chances that more pain is felt by ratepayers through rate hikes. An aging population and slow forecasted economic are additional risks the province will be less well positioned to deal with under this plan.
New Brunswickers should understand the disastrous nature of this budget. In a province and region where debt and deficits are far too often the norm, it’s a remarkable accomplishment to have outdone all your recent predecessors in the red-ink department. New Brunswickers should demand better.
Alex Whalen and Grady Munro are analysts at the Fraser Institute.
www.tj.news/new-brunswick/opinion-disastrous-budget-threatens-n-b-s-economic-future
