New Brunswick deep in the black again

New Brunswick's budget surplus last year was significantly larger than expected, final audited figures show.

But where the credit lies for the improvement is not entirely clear.

According to official figures released Wednesday and approved by Auditor General Kim MacPherson, the province posted a $72.6-million budget surplus in the 2018-2019 fiscal year.

It's the second budget surplus in a row in the province and the largest posted by a New Brunswick government in 11 years. It is also much bigger than the Progressive Conservativegovernment had been expecting just six months ago.

In March, Finance Minister Ernie Steeves projected a much smaller $4.5-million surplus for the fiscal year ended March 31, but heralded even that modest amount as a significant achievement since the previous Liberal government of Brian Gallant originally budgeted for a $188.7-million deficit.

Blaine Higgs took over as premier from Gallant in November 2018, midway through the budget year.

"We are very proud of this accomplishment," Steeves told the legislature about the possibility of posting the $4.5-million surplus. "This has been accomplished through responsible management."

At $72.6 million, the actual budget surplus finished the year 16 times larger.

Liberals have claim

Progressive Conservatives have been giving themselves credit for improving finances by restraining government spending and cancelling major projects, but the audited figures also show the former Gallant government might have a claim on some of the accomplishment.

The largest event swinging finances in a positive direction last year was on the revenue side of the budget not expenses and involved the receipt from Ottawa of $235.6 million more in New Brunswick personal and corporate income taxes than expected.

According to the province's financial statements most of that windfall originated from amounts generated inside New Brunswick during Gallant's term that had been underestimated and unpaid to the province until he left office late in 2018.

"Personal income tax is up $104.7 million (from budget) due to a significant prior year adjustment related to the 2017 taxation year and a strengthened forecast base," reads the explanation of the revenue increase provided by the provincial comptroller's office.

"Corporate income tax is up $130.9 million due to the improvement to both prior-year and in-year revenue reflecting stronger than expected 2017 assessments."

Overall government expenses actually ended the year $8.5 million over budget.

Despite the surplus, New Brunswick's debt still grew slightly, by $32.7 million, because of the ongoing addition of new capital assets.

It's the 12th year in a row New Brunswick's debt has grown although the pace has slowed considerably. Increases in New Brunswick's debt of $1 billion per year were common earlier in the decade, including in 2010, 2011 and 2013.

Steeves has announced plans to post a third budget surplus in the current year and pay down a portion of the debt by fiscal year end in March 2020, for the first time since 2007.