Policy Forum: Is New Brunswick Heading over the Fiscal Cliff?

Abstract

This article examines New Brunswick's recent fiscal track record and major trends likely to shape its trajectory in the years ahead. New Brunswick's fiscal position eroded considerably over its "lost decade," from 2007-08 to 2016-17. During this period, the province's successive governments performed poorly—both in absolute terms and relative to the other maritime provinces—in adjusting to major shocks that seriously impaired revenue growth. Looking forward, the government's revenue-generating capacity is likely to remain constrained, while health-care spending pressures will mount with a fast-aging population. The authors conclude that, in a critical way, New Brunswick's fiscal future may no longer be in its own hands, but in the hands of richer provinces with a younger population, and the federal government.