News Release

FREDERICTON (CNB) - Audited financial statements for the 2008-09 fiscal year (ending March 31, 2009) show New Brunswick recorded a deficit of $192.3 million.

When the 2009-10 budget was tabled in March, the provincial government had forecast the 2008-09 deficit to be $265 million. The actual deficit, however, is not as high as predicted at that time. A number of departments spent less than planned; in addition, pension expenses were less than expected as a result of a slight upswing in the markets in the final weeks of March.

The global economic downturn was a primary cause of the change from the original budgeted surplus of $19 million. The downturn had a significant affect on a number of areas, resulting in actual spending of $7.3 billion compared to the $7.1-billion budget. Pension expenses and provision for losses on economic development loans were the major accounts over-budget on the spending side.

On the revenue side, Metallic Minerals Tax and Corporate Income Tax revenues came in under budget, but this was offset by higher-than-expected revenues from the Harmonized Sales Tax and Personal Income Tax. As a result, total revenues of $7.1 billion came in on budget

"That we have a $192.3-million deficit underscores the challenges that we have ahead," said Finance Minister Greg Byrne. "During the next few years, there are some very important and tough decisions that will need to be made by our government as we recover from the global economic slowdown. We look forward to discussing those issues with the public in pre-budget consultations early in October en route to our budget for 2010-11, which will be tabled in the legislative assembly on Dec. 1, 2009."

Besides outlining the deficit, the audited financial statements show that the province's net debt increased by $438.6 million to $7.4 billion as of March 31, 2009.

The principal reasons for the debt increase included the 2008-09 deficit; investments in key infrastructure including highways, schools, hospitals and other buildings; and adjustments made for the NB Power group due to declines in market values of various contracts.

Auditor General Mike Ferguson has given a clean audit opinion on the 2008-09 financial statements.

The complete audited financial statement for 2008-09 is online. An update on fiscal year 2009-10 will be tabled with the 2010-11 budget in December.