N.B. government projecting deficit in 2024-25 fiscal, blames travel nurses for increase in expenses

N.B. forecasts deficit for fiscal year The New Brunswick government is forecasting a fiscal deficit, citing health-care costs as a culprit.

The Blaine Higgs government in New Brunswick has released its budget projections for the 2024-25 fiscal year, saying it now shows a deficit of $27.6 million compared to an initial surplus of $40.9 million.

Officials within the Department of Finance and Treasury Board say the culprit for the change is mostly due to greater health-care expenses.

Nick McCann, assistant deputy minister in the department, said health expenses are up $164 million because of higher operating and personnel costs - mostly travel nursing contracts, overtime and the training of new staff.

He said the first quarter showed travel nursing contracts will cost the province $97 million total for the 2024-25 fiscal year – mostly within the Vitalité Health Network.

But that amount shouldn’t be a surprise, since these contracts were signed prior to the budget in March.

And Vitalité’s CEO and president Dr. France Desrosiers said in a statement that the network shares its financial results and projections with the Department of Health on a monthly basis.

“Our network is committed to reducing its reliance on staffing agencies and continues to implement a phase-out plan to gradually eliminate the use of traveling staff by 2026,” she said. “We will need the support of all our partners to reduce pressure on the hospital system by increasing recruitment efforts, promoting the retention of healthcare staff, facilitating the recognition of prior learning, continuing the transformation of primary healthcare, and addressing the issue of patients awaiting placement in our hospitals."

Horizon Health has said it won’t need travel nurses by the end of September, and finance officials say that’s reflective in their forecasts.

The last time New Brunswick had a projected deficit was in the 2020-2021 fiscal year – but it later turned into a surplus.

The last time the province saw an actual deficit was in the 2017 budget year. However, Finance Minister Ernie Steeves says he’s confident by the end of the fiscal year, there will be a balanced budget.

Steeves was asked if this could impact the Higgs promise to cut the HST if elected – which would cost the province over $450 million over two years.

“It is the first quarter and we have three more to go, so I think there’s every opportunity for us to balance this budget,” he said.

Revenues are also up by $55.5 million – mostly due to federal funding and higher than projected personal income tax.

The province’s net debt is projected to be $12.7 billion.

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