10/11/2011 02:25 EDT | Updated 12/11/2011 05:12 EST

N.B. finance minister vows to meet budget despite report of growing deficit

FREDERICTON - New Brunswick's finance minister says his government must clamp down on spending after a fiscal update showed the province was falling further behind in its goal to rein in the deficit.

Blaine Higgs responded Tuesday after a first-quarter report released last week projected a $65.5-million increase in the deficit.

He said a second-quarter report will be released in the next two to three weeks, and he expects the gap between the budget and spending to narrow.

"It must," he said. "And if it doesn't, we'll spend even more time with those departments to analyze line by line if we have to until we get ourselves on target for this year and future budgets."

The fiscal update released Friday also forecasts the net debt to grow to $678.4 million, an increase of $48.2 million from what it was in the last budget.

Higgs said the biggest factors were increases in health care and social development spending. He said he will work with the departments to help them meet projections before the end of the fiscal year.

"We have to be driving that accountability and changes in how we do business through to next year and the next three years," he said.

Roger Melanson, the Liberal economic development critic, said he fears that efforts to improve the bottom line will mean deep cuts from a government only focused on cutting spending.

"I would tell New Brunswickers, 'Today, get ready,'" he said. "I believe there will be even deeper cuts because this has been the focus of this government for 12 months."

Melanson said the government should be looking to grow the economy and create jobs which in turn would generate more revenue. New Brunswick lost 6,000 jobs in the first quarter of the year, according to the report.

Higgs said the government will look to grow the economy but first he needs to be able to show departments and services are operating efficiently.

He said the government is changing the way it will present the capital budget in December.

Higgs said rather than just presenting a one-year budget, it will include an outlook for the following two years.

"We need to have a better feel for the future and have more predictability for the future."