The provincial government’s net debt increased by $1 billion to $9.48 billion for the 2010-11 fiscal year, according to audited financial statements which were released Tuesday.
In releasing the statements, Finance Minister Blaine Higgs said that the growing net debt is unsustainable.
"The focus must remain on fiscal discipline if we are to bring the province back to balanced budgets and long-term sustainability," said Higgs. "The debt crisis in Europe, the lowering of the United States' credit rating and impacts on financial markets show how vulnerable we all are if we do not address our deficit and debt challenges now."
The financial statements showed that New Brunswick recorded a deficit of $633 million for the 2010-11 fiscal year. Higgs said that although this was $115.8 million less than the budgeted amount of $748.8 million, the province is still a long way from balanced budgets.
"In the last fiscal year, we were able to curtail spending by calling on all departments to reduce their operating budgets by one per cent, but last year's improved performance does not impact the projected deficit of $448.8 million for 2011-12," said Higgs.
Although there were efforts to curtail spending in departmental budgets and reduced economic development spending, the province still reported an increase of $63 million in overall spending from budget. This was largely due to costs associated with the flood and storm surges in December 2010 and to higher-than-budgeted costs in delivering health and social programs, primarily in Medicare, long-term care and income security programs.
The financial statements also show that the province recorded a $212.6 million increase in revenue over what was budgeted, largely due to the strengthened economy.
"With only modest economic growth projected in the near term, the province cannot rely on increased revenue to balance the books," said Higgs. "This is why we have launched the government renewal process, a government-wide initiative designed to ensure we can provide appropriate and affordable services to citizens on a sustainable basis."
The complete audited financial statements for 2010-2011, along with additional information, can be viewed on the Web sites for the Office of the Comptroller at http://www.gnb.ca/0087/index-e.asp or the Legislative Assembly of New Brunswick at www.gnb.ca/legis.
