In delivering his budget for 2014-15 on Tuesday, Higgs pushed back an earlier pledge to balance the books this year, saying it will be 2017-18 before the province finishes a year in the black.
"The weakened economy has significantly eroded the province's revenue base, resulting in a delay in returning to balance," said Higgs.
"We remain committed to eliminating the deficit and reducing the net debt, but we recognize the need to balance our fiscal realities against our economic realities," said Higgs.
"Is there more that needs to be done? Without question there is," he said. "But when New Brunswickers look at our government's fiscal performance, they will remember where we came from and the significant work that has been done to get us to where we are."
Higgs is forecasting a deficit of $391 million in the coming year after a deficit of $564 million for 2013-14. Overall, the budget projects $8.4 billion in spending against $8 billion in revenue.
"Spending is being managed more responsibly and effectively, but economic challenges in recent years have contributed to a substantial revenue shortfall," said Higgs.
The province's net debt is forecast to grow by more than $530 million next year, pushing it to $12.2 billion. That represents 37.7 per cent of the province's gross domestic product, an increase of 0.9 of a percentage point from this year's level.
In the current year, the net debt ballooned by $607 million, or $12.8 million more than forecast.
"As you can appreciate, this is not the outcome we were working towards," said Higgs. "However, the foundation upon which our plan is built remains in place."
Sept. 22 election
With New Brunswick poised to go to the polls in a provincial election on Sept. 22, the Progressive Conservative Alward government's budget holds back on any apparent spending sprees in an attempt to woo votes.
In the $555 million allotted in the budget for capital spending on roads, schools, hospitals and other infrastructure, only $35 million is being dedicated to new projects.
"New Brunswickers also recognize that our fiscal situation requires us to make choices based not only on what we want, but what we need and can afford," said Higgs.
The capital budget includes $223 million to repair and maintain roads, $99 million on school maintenance and projects and $213 million for maintenance and improvement of health care facilities.
While there are no big ticket spending items contained in the budget, neither is there an apparent cash grab by government struggling to balance the books. No new taxation measures or increases are outlined in the budget.
"Our government recognizes that additional tax increases would put undue pressure on New Brunswick citizens and businesses and limit the economic growth potential that lies before us," said Higgs.
To make parties accountable
Along with the commitment not to raise income, gasoline or consumption taxes in 2014-15, there are no major fee increases in the budget, including to fees for motor vehicle licensing and registration.
In advance of September's provincial election, the government will introduce legislation aimed at making political parties accountable for their election promises.
"A process will be developed to make fiscal and economic information available to voters in advance of the election date," said Higgs.
"Politicians at all levels are realizing that we must continue to make better decisions on a regular basis, decisions that reflect on the collective good of the province," said Higgs.
"We must resist the political pressures and tactics that often accelerate in an election year. Our best achievement cannot be simply undoing what our predecessors may have done."