New Brunswick’s finance minister says the province finished the 2024-25 fiscal year with a $104.4-million deficit, instead of the $40.9-million surplus it had budgeted for.
René Legacy said the province’s net debt rose to $12.3 billion from $11.8 billion, roughly $14,400 per New Brunswick resident.
However, he said those figures aren’t entirely negative, as the province’s net debt-to-GDP ratio fell, meaning the economy grew faster than the debt.
“Our ability to manage our debt is actually stronger now for last year’s results than it was the year before,” Legacy said.
Legacy released the numbers Monday, noting the province spent $416.9 million more than it budgeted. He said the overage was largely due to increased costs in health care and social programs, which were $337 million and $96 million over budget, respectively.
“Every year, health-care spending is our biggest part of the spending. I would say that the variability and the uncertainty is going to continue because we have an aging population,” Legacy said. “The big hope that I have is that we will continue to grow as an economy, and the [health-care costs] get smaller with our growth and not just by cutting or trying to restrict.”
The province said there were increased costs for personnel at regional health authorities, a large spend on travel nurses in the first quarter of the year, and increased demand for out-of-province health care.
The government also brought in $156 million this year as part of a $32.5-billion settlement from three major tobacco companies that were ordered to pay as part of a lawsuit seeking to recoup smoking-related health-care costs.
The settlement was announced in March, when an Ontario judge ordered JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco to pay compensation to provinces and territories, as well as plaintiffs in two class-action lawsuits.
New Brunswick received $156 million from the settlement this year, but Legacy said the province expects to receive $596 million in total over the life of the agreement. The rest of the money will come in future years, though it’s uncertain how much the provinces will receive and when, as the payment schedule is based on the profitability of the tobacco companies.
“[The payment] is over several years. It could be a couple of decades as we get these payments in,” said Shauna Woodside, director of accounting services with the department.
Legacy said that’s why the province cannot commit future payments to any budgets at this time.
“There is a significant amount of illegal cigarettes in New Brunswick compared to other provinces, so that does impact profitability,” Legacy said. “Our comptroller felt better to not account for all of [the payment] up front, because we would have had to, every year, significantly adjust, for the next 20, 30 years.”
The government decided to put the money towards general government revenues, rather than earmarking it for anti-smoking programs or tobacco-related health-care costs, as suggested by anti-smoking advocates.
The minister also noted HST revenue was about $70 million lower than originally projected, in part due to the federal government’s HST break from December 2024 through February of this year.
Legacy said discussions with Ottawa regarding HST revenue are ongoing.