Blaine Higgs unveils $948M capital budget

Finance Minister Blaine Higgs unveiled his $948-million capital budget on Tuesday that included a three-year capital spending plan.

The capital budget set aside $544 million for the Route 1 highway project and $404 million for ongoing capital projects.

Higgs said only $24 million would be set aside for new capital projects, which is a reduction from $42 million in new project funding in the 2011-12 capital budget.

Higgs said in the challenging financial times, the provincial government has to make tough choices on what money is spent on capital projects.

"However, we also have an obligation to ensure that we get the most value out of every dollar invested in our province’s infrastructure," he said.

"All capital projects will be managed under a system of stringent controls and construction oversight to keep costs as low as possible and meet established budget and completion targets."

The Alward government is also moving toward multi-year budgeting. The finance minister said the provincial government plans to spend $438 million and $487 million in the next two capital budgets, respectively.

"Today’s historic multi-year capital plan provides a roadmap for the next three years. It provides funding to help complete existing projects for ongoing maintenance for our buildings, roads, bridges and other infrastructure assets," Higgs said.

"Rest assured, our government will continue to consider our fiscal circumstances as it sets future capital budgets and will balance fiscal responsibility with the health, safety and well-being of New Brunswickers."

Growing deficits

The Alward government is facing a $545.7 million deficit, which is almost $100 million more than it projected in March.

The provincial government’s first capital budget in 2010 cut spending to $592.9 million from the $940.4 million spent by the former Liberal government in 2010-11.

Higgs has spoken publicly in recent months about his attempts to curtail provincial spending.

Higgs said last week that some departments spent their internal savings on other projects inside that department. Higgs said that is justified only if the extra projects are needed.

"That's where I think we need to differentiate: it isn't a case of 'I'll pick a project because I've got more money,' it's a case of, 'Is this a priority project for us to look at?'" Higgs said.

The New Brunswick government introduces its capital budget in December so departments can prepare project tenders during the winter and construction can begin early in the spring.

The main budget is released in March.

Lower tenders

The provincial economy offered some departments a break in 2011.

Transportation Minister Claude Williams, for instance, saw bids for government roadwork come in 20 per cent lower than expected, a potential saving of tens of millions of dollars.

But last June, Williams said he would not use that windfall to pay down some of the half-billion dollar deficit.

"This is a very good sign for us because it means the money in the budget can be invested in other projects, other road projects in New Brunswick," Williams said.

Those projects may not have been deemed important enough to make the transportation minister's initial list of necessary projects.

Aside from the savings found in some transportation tenders, it has been a difficult year for the Alward government. Higgs has witnessed the deficit grow in both the first and second quarter fiscal statements.

When Higgs released the fiscal update for the second quarter in November he warned that revenues were lagging in 2011.

The finance minister said highway tolls are back on the table in New Brunswick as the provincial deficit continues to grow far beyond what was forecast.