Staring down a record deficit of $1.3 billion, the New Brunswick government has warned that virtually every service and program risks facing cuts in next month’s budget.
For the government to continue investing in areas like health care and education, “we must be prepared to control our expenses and generate new revenues,” Finance Minister René Legacy told reporters earlier this week.
“The status quo is not sustainable in the long term.”
The Finance Department has released a list of options to save money or generate new revenue, and it’s calling on New Brunswick residents to send in comments on those ideas by the end of the week.
Here’s five things to know about New Brunswick’s possible solutions to its budget woes:
1. How bad is it?
The $1.3-billion projected deficit is the biggest on record and the fiscal year isn’t over. The Opposition Progressive Conservatives say the numbers could get even worse.
The last budget from former Tory premier Blaine Higgs’ government in 2024-25 projected $13.3 billion in spending and a $41-million surplus. Premier Susan Holt’s Liberals took power in October of 2024 and, when the final accounting was done, the fiscal year had swung to a $104.4-million deficit.
Holt’s first budget, for the 2025-26 fiscal year, added about $1 billion in spending for a total of $14.3 billion and projected a $549-million deficit. The red ink has more than doubled since then.
The province’s net debt was $12.3 billion in March 2025. It’s now projected to rise to $13.9 billion by year’s end. About five per cent of all government revenue, $740 million, is spent just on servicing debt.
2. What could the government cut?
Legacy says there’s no one place where the government can save $1 billion, so nipping and tucking just about everything is on the table.
The Finance Department says the civil service has grown 14 per cent in recent years and the government could shed some of its 13,000 employees. It says reducing contracts with outside consultants could save up to $50 million a year and the province could cut certain grants to non-profits and community groups.
The government says some provincial roads have been built or upgraded beyond what is justified, and it might create a new policy to align building and maintenance with traffic volumes.
3. What about health care and education?
Health care and education combined make up more than half of the provincial budget so trimming the fat without looking at the two departments will be difficult. The next budget will also have to bake in the full-year cost of a new agreement with physicians, estimated around $270 million. Because of timing, only $176 million of the contract is included in the current fiscal year.
The province says it could shift beds from hospitals to long-term care homes to save money and could also review subsidized vaccines. It mentions eliminating duplication in home-care assessments and streamlining health-care operations while maintaining essential services.
The province is considering selling off properties and buildings, including schools with fewer than 100 students. Legacy noted Tuesday that about one-third of the province’s schools currently have enrolments of less than 30 per cent of their total capacity.
“I don’t know if it’s the right mix or the right situation, but we have to ask the question,” he said.
4. Are taxes going up?
Legacy suggested Tuesday that New Brunswick taxes are already among the highest in Canada so the government isn’t seriously considering raising them. However, the province says the more than 2,000 service fees it charges for things like permits might be on the way up and new fees may be introduced. It’s also considering a levy on arts and culture tickets, bumping up the cost to lease Crown land and an increase in mining royalties.
The province is considering overhauling the property tax system, including a review of how it pays property taxes on behalf of universities and how the rural road levee works.
5. What other measures is the government considering?
New Brunswick might start charging tolls for out-of-province vehicles. The government has suggested those could be placed at provincial boundaries or on major highways.
The province notes it collects taxes and fees on products like lottery and gaming, tobacco, alcohol and seafood “with opportunities to further optimize and ensure the province is receiving the associated tax revenues.”
The government says it could tighten up provincial debt collection and notes the student loan program currently carries more than $125 million in defaults.
The budget is scheduled for March 17.
This report by The Canadian Press was first published Feb. 19, 2026.
