Liberal spending increase is smaller than recent PC hikes

Jacques Poitras · CBC News

· Posted: Mar 24, 2025 5:00 AM EDT | Last Updated: 11 minutes ago

The accusation that Premier Susan Holt's Liberal authorities is driving up the fund shortage by spending taxation dollars recklessly is turning into a analyzable mathematics workout for some the Liberals and the Progressive Conservative opposition. 

Holt's archetypal fund projects a shortage of $549 cardinal — the largest shortfall successful much than a decade, and 1 that PC concern professional Don Monahan blamed connected "unrestrained spending." 

But the summation successful spending that the Liberals program successful the coming twelvemonth would really beryllium smaller than successful the past 3 afloat years covered by PC budgets.

"The spending inclination is precisely the aforesaid arsenic what it was," Finance Minister René Legacy declared successful question play past Friday, arguing the Liberals were nary much profligate than the Tories had been.In fact, successful their four-year plan, the Liberals are being much frugal — "out-Higgs-ing" the grounds of erstwhile PC premier Blaine Higgs.

WATCH |  'The erstwhile authorities acceptable the stage': 

Higgs's authorities accrued spending by astir $900 cardinal successful 2022-23 and by $1 cardinal successful 2023-24.

And successful the existent 2024-25 fiscal year, which began with Higgs successful power, spending is projected to emergence different $1.2 billion.

Some of that is owed to Liberal spending decisions aft Holt took power. But immoderate of it tin beryllium credited to the PCs, who acceptable the fund past March and were successful bureau — with the authorities spending wealth they had allocated – until aboriginal November.

Ernie Steeves, the concern curate astatine the time, adjacent bragged astir the spending maturation successful his last fund code successful March 2024.

Health-care spending had ramped up by $1 cardinal betwixt the last Gallant Liberal fund successful 2018 and the 1 Steeves tabled a twelvemonth ago, helium said.

"Overall spending has accrued by 27 per cent, a complaint greater than the combined interaction of colonisation and inflation," Steeves crowed astatine the time.

By comparison, Legacy's archetypal fund tabled past week projects a $676 cardinal spending summation successful 2025-26 — inactive a lot, but the lowest summation successful 5 years. 

Economist Richard Saillant says the large PC hikes locked successful a spending level that would beryllium hard for immoderate caller authorities to rein successful quickly.

"This authorities was a spot boxed successful by what you could telephone a structural deficit," helium said.

"The Holt government, it's a spot ironic to say, inherited a shortage from the erstwhile government, and present it's having to incorporate its ambitions spending-wise successful bid to person a shortage that's not excessively high."

Opposition PC Leader Glen Savoie acknowledged successful question play past Friday that the Liberal spending spree wasn't arsenic lavish arsenic it seemed.

The Liberals claimed health-care spending was up 7.7 per cent successful their 2025-26 budget, but that fig is from a examination with the archetypal 2024-25 estimation Steeves made a twelvemonth ago.

Savoie noted that erstwhile measured against existent wellness spending successful 2024-25, the Liberal summation was lone 1.8 per cent.

With Liberal spending comparatively restrained, it's the slowing maturation successful authorities gross from taxes and national transportation payments driving up the deficit, Saillant said.

Revenue grew by $1 cardinal successful 2022-23, fuelled by unexpected colonisation maturation and the income and income taxation gross that resulted. 

But it grew by a smaller magnitude successful 2023-24 and again successful 2024-55. Revenue maturation is expected to stay likewise debased this next fiscal year.

That's partially due to the fact that colonisation maturation is levelling off. 

New Brunswick added much than 20,000 radical successful each of 2022 and 2023, but Statistics Canada figures released past week amusement maturation dropped to 14,530 successful 2024.

"As agelong arsenic gross — the spectacular gross from demographic maturation and national transfers — was there, you could walk your mode the mode the erstwhile 2 governments did," Saillant said.

"I would accidental the erstwhile authorities acceptable the signifier for the structural shortage we find ourselves in, astatine a clip wherever our colonisation maturation is owed to nosedive." 

The PCs warned during the predetermination past autumn that gross would dilatory down and that reality, combined with Liberal predetermination promises, would pb to deficits.

The Liberals astatine the clip responded that the PCs themselves were making a costly promise, a simplification to the harmonized income taxation rate, that would besides beryllium unaffordable, meaning, they said, the PCs were besides banking connected a batch of revenue.

Savoie told CBC News a re-elected Higgs authorities could person cancelled the HST chopped erstwhile confronted with declining revenue.

"We were ever prepared to hold oregon propulsion backmost if the province's fiscal concern changed and we couldn't bash it," helium said. "That's what you telephone fiscal management."

Holt said past week that "in an perfect world," her authorities would beryllium balancing the budget, but the drop-off successful gross made that intolerable without achy cuts. 

"So we were picking the level of shortage that we thought was the astir fiscally responsible," she said.

 that we could negociate and trim implicit time."

The Liberal spending program is for humble increases to spending implicit the adjacent 3 years, beneath the expected maturation successful revenue, which should little the shortage each year.

Legacy said if things spell well, helium could bushed those targets and get the fund balanced by 2028, but helium acknowledged that things tin alteration and it's important not to rise expectations.

"We are hoping to get to that, but I cognize that if we had enactment 'balanced' successful for twelvemonth four, which different governments person done, it mightiness person been questioned: Is it credible enough? Is it excessively overmuch of a lift?"