The New Brunswick 2026-27 Budget
New Brunswick Finance Minister and Deputy Premier Rene Legacy presented the 2026-27 provincial budget earlier today in the Legislative Assembly and his government has confirmed that it will run significant deficits for the remainder of its mandate, and the provincial debt is expected to climb from $13.9 billion to $19.7 billion.
Revenues are projected to reach $14.24 billion, while spending is projected at $15.63 billion, resulting in a deficit of $1.39 billion – the largest deficit in the province’s history.
A considerable portion of the deficit comes from an increase in health spending of 17.4 per cent, or $710 million, and in the Department of Social Development, where spending will rise by 15.5 percent or nearly $270 million compared to last year’s budget, however, both departments ran over budget in 2025-26.
The government projects real GDP growth of one per cent in 2026, reflecting global economic uncertainty and ongoing trade pressures.
Key health expenditures include:
- $170.4 million as part of the physician services agreement with the New Brunswick Medical Society, which introduces new compensation models that reward doctors for patient attachment, timely access and participation in team-based collaborative care practices.
- $5.4 million to support medical education in several fields and to support international recruitment of medical graduates and trained nurses.
- $30 million to expand the collaborative care clinic model.
- $50 million to continue work to modernize and digitize the health-care system, supporting the ongoing implementation of a clinical information system.
Key affordability and housing measures include:
- $17 million for a new community housing retention and expansion project, to help meet the needs of low- to moderate-income New Brunswickers.
- $10.2 million in wraparound services for supportive housing.
- $4.4 million to index social assistance rates to inflation.
- $98.1 million to continue the residential electricity rebate.
Educational expenses include:
- $19.3 million for additional educational assistants in both the anglophone and francophone sectors.
- An additional $7 million to deliver a school lunch program across the province.
- $5.8 million for additional resource teachers, academic support teachers and guidance counsellors.
On the economic front, the Minister highlighted the following expenditures:
- $2 million in the Agriculture Growth Action Plan and $750,000 in the Local Food and Beverage Program to accelerate growth related to producing food in New Brunswick.
- $21 million in Opportunities NB’s Competitiveness and Growth Program, to assist major export-oriented companies in the province.
- $2.8 million to help stabilize the arts and culture sector and help boost the creative economy through new jobs, fostering innovation and delivering more access to the arts.
- $250,000 to support pay transparency implementation.
- $6.7 million to strengthen wildfire preparedness and response efforts.
The premier and ministers had stated that difficult decisions would have to be taken and outlined the following measures:
- Reducing Part 1 of the civil service by about 12 per cent over three years, for savings of up to $100 million.
- Reviewing underutilized assets, including government buildings and schools with fewer than 100 students. The operation of heritage properties with fewer than 5,000 annual visitors will be transferred to community partners or closed.
- Discontinuing provincial field veterinary services, which will be handed off to the private sector, as well as provincial veterinary lab and foreign animal disease lab services. These will be phased out over the next three fiscal years.
- Introducing tolls on non-New Brunswick vehicles. A toll booth near the Aulac district of Tantramar will be operational by 2028, with revenue directed specifically to road and bridge maintenance.
The New Brunswick economy is facing strong headwinds and the following indicators demonstrate the seriousness of the situation:
- Manufacturing sales in New Brunswick declined by 6.9% in 2025
- New Brunswick’s merchandise exports fell by 8.2% to 16.0 billion in 2025, driven by lower volumes of oil exports and lower oil prices.
- In 2026, the Department of Finance and Treasury Board anticipates real GDP to increase by 1.0%, as weaker population gains and moderating residential construction limit growth prospects. This compares with an average of 1.2% among private sector forecasters.
- Primary household income is forecasted to increase by 3.7% in 2026. Wages and salaries are projected to see a smaller increase as compared to 2025 due to weakening employment growth and slower wage gains.
- Inflation in New Brunswick is expected to reach 2.2% in 2026. Food inflation is expected to accelerate, while shelter price growth is anticipated to ease.
- The province’s net debt-to-GDP ratio is expected to climb from 27.9% in the 2025-26 revised estimates to 30.8%.
- Service of the public debt is forecast to cost $860 million, an increase of $120 million in just one year.
Conclusion
Demographic challenges and trade disruption are playing a role in deteriorating public finances, to be sure, but it is unclear what, if any, path to a return to balance is envisioned. This is all before mentioning NB Power’s considerable debt load, which is expected to rise to $6.6 billion.
New Brunswick could face a credit downgrade, which would increase the already burgeoning cost of borrowing.
Either considerable cost-cutting or rapid economic growth can alter the spiral that New Brunswick seems to be in.