N.B. premier defends ambiguous promise on balanced budgets
Nurse bonuses were more important than avoiding deficit this year, Susan Holt says in year-end interview
Premier Susan Holt is defending what now appears to have been a carefully ambiguous election promise to balance the provincial budget in every year of her mandate.
Holt repeated the balanced budget promise many times during this year's election campaign but never specified that it did not apply to the current 2024-25 fiscal year — even when questions from reporters gave her ample opportunity to clarify the point.
In a year-end interview with CBC News, the premier said the Liberals "talked pretty broadly" about things, suggesting that was why she hadn't been more specific.
The promise to balance budgets in every year of the government's mandate referred to "the budgets that we were putting together and that we were going to be governing based on," she said.
By that logic, this year, covered by a budget delivered by the previous Progressive Conservative government in March, doesn't count.
Just days after the government was sworn in, Finance Minister René Legacy announced that as of Sept. 30, the province was on track for a $92.1 million deficit this year.
Holt said that figure surprised her, though she decided to honour the commitment to $10,000-per-nurse retention bonuses at a cost of $74 million — $60 million of which is new spending that will be added to this year's bottom line.
Holt promised the bonuses on Sept. 20, the second day of the election campaign, at a time when the PCs had already projected a $27.6 million deficit for the year.
She brushed off questions at the time about whether she'd send out the bonuses if there was still a deficit, and if she was willing to run an even larger deficit to do it.
"We have committed to balanced budgets every year," she said at the Sept. 20 event in Oromocto, without mentioning that the promise didn't cover the current year.
Holt said the cost to the health-care system of losing nurses would be "so much greater" than the expense of the retention payments.
But she reminded reporters that over the last four years, the PC Higgs government projected small surpluses or deficits, only to have a flood of federal tax remittances boost revenues and create large surpluses — which she implied would happen again.
"We have very little faith in the premier's deficit projections because they have proven time and time again that they have forecasted deficits and then delivered an exceptional surplus," she said Sept. 20.
"We believe that our projections for revenue and for expenses for the next fiscal year — for this fiscal year that we're in — allow the space for this $74 million investment in the retention of our nurses."
That assertion appears to have been mistaken, with Legacy saying the government was "thus far … not seeing the major swings in the revenue that we have seen over the past few years."
In the year-end interview, Holt said the federal remittances are "fairly challenging to predict" but she expected the amount to be "a little less than in previous years."
She wouldn't say whether it would be enough to eliminate the projected deficit.
"I mean there's lots of things that we learn every day about revenues that are coming in that we hadn't expected and expenses that are coming in that we hadn't expected," Holt said.
"It's something that fluctuates on — feels like — a week-by-week basis right now," she said.
"And so we're making the adjustments that we can make in order to get as close to balance as possible, but we're focused on delivering on our promises to New Brunswickers."
Acadia University political scientist Alex Marland, who studies political campaign messages, said there's a long history of new governments realizing that some issues were a lot harder to deal with than they expected.
"I think it's reasonable that you don't have full accountability for something when a lot of the decisions being made and a lot of the details were things you were not directly involved in," he said.
"I think that giving people a free pass for a little bit when they first form government is reasonable."
Holt said voters clearly felt in the Oct. 21 election that health care was "their first priority" and that's why it was important for the retention bonuses "to come in as quickly as possible" even in a year with a budget deficit.
New Brunswick hasn't run a budget deficit since 2016-17, the second-last year under the previous Liberal government of Brian Gallant.
Seven consecutive surpluses followed, including a $1 billion surplus in 2022-23 — results that prompted criticism the Higgs PCs were unwilling to spend their revenue windfall to address crises in health care and other areas.
"We're excited to deliver on that commitment to nurses, and we have another number of months to work out some of the fiscal realities that we've been passed on from the previous government," Holt said in the year-end interview.
"We're going to do our very best to work those out."
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