Higgs government accused of manipulating October fiscal update

The New Brunswick government was in much better financial shape than it claimed in October as it conducted wage negotiations with CUPE unions, according to information released this week by the Department of Finance.  

Figures disclosed Tuesday in the province's second-quarter financial update show provincial tax revenues were running $304.3 million ahead of budget expectations, as of Sept. 30.

Using that figure, the province now projects its own tax and other self-generated revenues will reach $382.7 million beyond original budget targets by the end of the fiscal year in March 2022.  

"We are seeing taxation revenue increases reflecting stronger-than-anticipated 2020 results and a stronger economy," said Finance Minister Ernie Steeves.

But the "higher than expected revenues" are so high they raise questions about the first-quarter update released just last month. It forecast much weaker self-generated revenue growth of $145.3 million by the financial year-end.

That's a  $237.4-million difference in provincially generated revenue estimates in the two forecasts, even though they were issued just 34 days apart and both had the benefit of being prepared after Sept. 30, when revenues were already documented to be soaring.

New Brunswick economist Richard Saillant says he doubts the provincial government could have been unaware of how its fortunes were trending when it released its first year-end forecast on Oct.13, given how much unexpected revenue had arrived by Sept. 30.

He suspects wage negotiations with several public sector unions caused the province to withhold the news from them and the public.

"This is way too much of a coincidence," Saillant said in an interview.

"They better have a damn good explanation why all of a sudden, in the space of five weeks, they are comfortable with ramping up their (revenue estimates) by nearly a quarter of a billion dollars."  

Quarterly financial reporting has been touted by the government of Premier Blaine Higgs as an important tool to "ensure complete fiscal transparency" for the public.  

Beginning in 2019, it began reporting both "year-to-date" budget numbers side by side with "full year" budget projections as part of a promise to make comprehensive and trustworthy financial information widely available.

"This change in fiscal reporting demonstrates our commitment to enhancing transparency and responsible financial management," Steeves said after launching the expanded reports.

The first-quarter report is normally issued at the end of August, but this year came out six weeks late, when the second quarter was already over.