Holt Liberals prepare first budget amid economic uncertainty

The Holt government tables its first budget today, a document the Liberals once confidently predicted would feature campaign promises fulfilled, combined with a modest fiscal surplus.

Instead, with economic uncertainty from the threat of U.S. tariffs on Canadian exports, the question is how big the budget deficit might be.

Finance Minister René Legacy warned last month that a deficit appeared unavoidable in the upcoming 2025-26 fiscal year. 

"I would say it's getting obvious that it's highly likely," he said at the time.

In a social media video last Friday, Premier Susan Holt said her government "cannot keep kicking the can down the road" and would bring "transformational change" to some government services, including the delivery of primary care.

"That means the services we deliver won't look the way they did in the past," she said.

It was not clear whether that meant an even larger infusion of spending, or potentially controversial cuts designed to avoid a deeper deficit.

The centrepiece of Holt's campaign commitment to improve primary care was a promise to open 30 collaborative care clinics by 2028, including 10 in the coming year.

According to Liberal platform documents, that promise would cost only $3.8 million in 2025-26, an amount that would not include, for example, what doctors and nurse practitioners in those clinics would bill to Medicare.

Holt said in her state of the province speech in January that the threat of U.S. tariffs by President Donald Trump was already slowing down the pace of hiring and investment in the province.

The Liberal premier promised balanced budgets in every year of her mandate but has said the current year's projected deficit of $398.9 million doesn't count against that commitment because the budget had been set by the previous Progressive Conservative government.

Some of the spending contributing to that deficit this year, however, is the result of Liberal choices, including an additional $60 million for nurse bonuses and $32 million in sales-tax rebates on N.B. Power bills.

Holt's video said the province's dire fiscal situation was unforeseeable.

"The financial conditions in front of us are more difficult than anyone could have anticipated," she said.