Summary

• In recent years New Brunswick has begun to make substantial progress addressing its fiscal challenges. Specifically, it has exercised greater restraint with respect to its spending growth than the other two Maritime provinces.
• This restraint has contributed to positive fiscal outcomes for the province including budget surpluses and a declining debt-to-GDP ratio.
• The province began making significant fiscal progress in 2017/18 when it started running balanced budgets, a decision that it has maintained in subsequent years.
• These surpluses have contributed to a reduction in the province’s net debt-to-GDP ratio; it declined from 38.9 percent in 2017/18 to 25.1 percent in 2022/23. As recently as 2015/16, New Brunswick was the second most indebted province in Canada. In 2022/23, New Brunswick had the fourth lowest debt-to-GDP ratio (pending the finalization of annual statistics), behind only Alberta, British Columbia, and Saskatchewan.
• This bulletin shows that if government revenue continues to grow on its current trajectory, the province will see a substantial operating surplus developing over time that could generate the fiscal room needed for substantial tax cuts.
• Under this scenario, the government would have the option of introducing transformative tax policy changes. For instance, the province could reduce income taxes by $3,604 per income tax filer while maintaining the current fiscal balance.