New Brunswick's projected deficit drops to $115.2M

New Brunswick's projected budget deficit for 2017-18 continues to tumble.

The government's third-quarter fiscal update now projects a deficit of $115.2 million for the current year, down from the $191.9 million that Finance Minister Cathy Rogers projected in her budget last year.

It's such a dramatic adjustment that the Liberals are one year ahead of schedule: this year's projected deficit is now lower than the $117 million shortfall the Liberals were projecting for next year, 2018-19.

"We have consistently met and exceeded our financial targets," Rogers said in a news release.

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The shrinking deficit this year is almost entirely thanks to unexpected revenue, including $102.9 million more in corporate income tax revenue that the federal government is collecting and will remit to the province.

It's also because the province expects to spend $26.8 million less than planned because of delays in a series of federal-provincial water and wastewater projects around New Brunswick.

But the improving outlook for 2017-18 offers no guarantees for the next fiscal year, or for the Liberal projection of budget surpluses starting in 2020-21.

Premier Brian Gallant has announced a series of spending promises in recent weeks that will affect next year's budget.

And his plan to devote an increasingly large share of the gas tax to a climate fund — $37.4 million next year, rising to $180.2 million in five years — will deprive the province of general revenue and make surpluses harder to achieve.