[FREDERICTON, NB] — The provincial government recorded a deficit in 2011-12 of $260.6 million, according to recently released audited financial statements. This was $188.2 million less than the budgeted deficit of $448.8 million.
For the first time in the last 11 years, year-over-year expenses decreased in 2011-12. Expenses were $128.8 million less than in 2010-11 due to a decrease in spending throughout government. A number of areas in the government spent less than their budget targets: health; economic development; education and training; labour and employment. These performances were partially offset by additional costs associated with pension expenses and the flooding that occurred in March of this year.
Revenues were higher than budgeted due to an $80-million profit over what was budgeted for the New Brunswick Electric Finance Corporation due to solid results for NB Power as well as higher conditional grant revenue. Net debt in 2011-12 grew by $430.1 million to $10 billion. The main reasons for this increase were the annual deficit of $260.6 million and the acquisition of tangible capital assets. The net debt-to-GDP ratio remained stable in 2012.
Finance Minister Blaine Higgs pointed to the cost of servicing the debt as evidence that the provincial government still has much work to do to improve its finances.
"Although we have managed to slow the growth of the debt, it remains a lasting reminder of the need for government spending that is sustainable relative to our revenue,” he said. “There is a definite need to return to balanced budgets and a targeted debt reduction plan."