Andrew Harvey was charged in July for offences alleged to have happened three years ago. But a secondary review of the case was launched due to the high profile it generated, the assistant deputy attorney general said.
"It was subsequently determined that the charges didn't meet the threshold required to prosecute," Luc Labonte said in a statement.
Labonte said the decision to withdraw the charges rests solely with the Crown prosecutor's office.
A spokeswoman for the provincial government said Labonte would not be available for an interview. But there will be a review of the process that resulted in the laying of the charges, Labonte said in the statement.
The Crown prosecutor's office and Harvey did not return messages for comment.
The Liberals declined to make party leader Brian Gallant available for an interview. But the Liberals said in a news release that the charges were "baseless" and they welcome Harvey back into the party fold.
Harvey was suspended last week as the Liberal candidate for the riding of Carleton-Victoria after word of the charges surfaced publicly. Gallant said the decision was made because Harvey did not disclose the charges to party officials.
At the time, Harvey issued a statement apologizing for not telling the Liberal party about the charges, saying he believed the allegations were without merit.
Harvey was named along with David Frederick Harvey, B. Fred Harvey and three companies in documents filed on July 29 in Woodstock provincial court. Charges against all of them were dropped.
Andrew Harvey is the owner of Harvey Farm and Forest Ltd., one of the companies named in the documents.
The information filed with the court alleged that between May 1, 2011, and Dec. 31, 2011, the accused defrauded the province of more than $5,000 and while knowing or believing documents were forged, caused two people to act on those documents as though they were genuine.
Also Friday, David Alward took his message of natural resource development to a business audience in Saint John, where he reiterated his position that the province's ports would benefit from an expanded shale gas industry and the development of the Energy East Pipeline.
Earlier in the day, Gallant cast his ballot at the returning office in the community of Grand-Digue in his riding of Shediac Bay-Dieppe.
Returning offices in the 49 ridings are open six days a week for New Brunswickers to cast their vote. There are also advance polls Saturday and Monday.