Finance Minister Blaine Higgs delivered an $8.4-billion fiscal plan Tuesday drenched in red ink, breaking a promise to balance the books by the end of their mandate.
A $391.1-million shortfall is projected for the 2014-15 fiscal year, with the debt to rise by $531 million to $12.2 billion.
There are no tax increases and few big spending promises, aside from $27 million allocated for the province's new catastrophic drug plan and a three per cent hike in social assistance rates to take effect in April. The government also released a $555-million capital budget, but only $35 million of that is for new projects while the rest is to maintain existing infrastructure.
"This is not a typical election budget," Higgs told a news conference prior to delivering his budget.
"We are staying the course with our capital spending levels as well as continued disciplined approach in our ordinary spending."
The province is anticipating a deficit of $564.1 million for the 2013-14 fiscal year, up from its previous estimate of $538.2 million.
But Higgs is banking on a boom to lift the province out of its economic doldrums within three years. He is projecting a surplus of $119 million for 2017-18 based on continued spending cuts and economic growth spurred by natural resources development, including the proposed Energy East Pipeline project.
"These are not smoke and mirror opportunities," Higgs said. "These are real jobs — mining, forestry, the natural gas development and what can come from the pipeline."
Following two years of declining revenues, Higgs is projecting a 4.3 per cent increase in revenues for the upcoming fiscal year. He said that will be the result of the global economic recovery, the full implementation of last year's tax increases and a $107 million rise in equalization payments — the first increase from Ottawa in four years.
He also said a new forestry plan will be released soon that will increase the amount of fibre available to lumber mills, thereby further strengthening the province's economy.
Liberal Opposition Leader Brian Gallant said the government's estimates were lofty because it has consistently overestimated revenues and underestimated expenses.
"I think they've lost all credibility when it comes to fiscal management," Gallant said. "Unfortunately, we see that this is a government that can't create jobs, that can't grow the economy."
NDP Leader Dominic Cardy said he was alarmed by the growing debt, which breaks down to $16,136 for every man, woman and child in the province.
"We can't afford to keep adding the hundreds of millions of dollars to the debt each year that we're continually piling on for future generations to pay back," Cardy said.
Cost-cutting measures in the year ahead include reducing the number of elected members to 49 from 55 and further planned cuts to the size of the public sector.
Higgs said the government has reduced its public service by 1,211 positions through attrition, close to its goal of eliminating 1,500 positions.
He said the government will also introduce fiscal accountability legislation requiring the auditor general to report on the government's finances 60 days in advance of each fixed election date. It would also require political parties to release an independent estimate of the costs of their election promises.
That's welcome news to Kevin Lacey, Atlantic director for the Canadian Taxpayers Federation, who said too often politicians make promises they can't afford.
"That is potentially a significant change and could reduce the election lottery in every election we've seen," he said.
The next election is set for Sept. 22.
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