As he enters the final year of his mandate, Premier David Alward is tying his hopes of an economic turnaround to a burgeoning shale gas industry, announcing Monday a new royalty regime that his government hopes encourages greater investment in the sector.
The money is sorely needed. Over the last three years, government spending cuts and a reduction in the public service have not been enough to offset weaker than expected revenues, forcing Alward to abandon a key election promise to deliver a balanced budget within four years.
The government reported a $508-million deficit for the last fiscal year, about $97 million higher than it projected.
But Alward's desire to generate revenues from shale gas could raise the ire of New Brunswickers, some of whom have already expressed their sharp disapproval with the government's stance on the issue.
A large anti-shale gas protest near Rexton, N.B., turned violent last month when RCMP enforced an injunction preventing protesters from blocking a property used by energy company SWN Resources, which has conducted exploration activities in the province. Forty people were arrested and six police vehicles were burned.
Another demonstration is expected Tuesday outside the legislature in Fredericton as the fall session begins.
Still, Alward has not budged.
"We believe that if we're able to move these files forward, we will have a stronger province and we are determined to do it," Alward said in an interview.
"I know that is not easy, but we are focused on it and will continue to be."
Liberal Leader Brian Gallant has repeatedly called for a moratorium on shale gas development, saying all the environmental risks associated with hydraulic fracturing aren't yet known.
"The price for natural gas is at an all-time low, so it only makes sense for us to say let's press pause," Gallant said.
Alward, who faces the polls on Sept. 22, 2014, says New Brunswickers should not expect a big pot of pre-election goodies teased in the throne speech.
"We can't afford it," he said.
Tom Bateman, a political scientist at St. Thomas University in Fredericton, quoted an old Republican campaign ad when asked for his thoughts on government spending plans for the year ahead.
"A chicken in every pot? No, probably not," he said. "I think restraint and realism will be the watch words."
Geoff Martin, a political scientist at Mount Allison University in Sackville, N.B., said Alward's 2010 campaign promise to fix the province's economy without raising taxes or cutting programs was a mistake.
"They were overly optimistic," Martin said. "It hasn't been politically feasible for them to do it."
The Progressive Conservatives hold 41 seats in the legislature, while the Liberals have 13, and there is one independent.Suggest a correction