Progress on reducing the deficit but concerns remain regarding sustainability of province’s finances23 November 2017
FREDERICTON (GNB) – Auditor General Kim MacPherson noted in her report released today that she is encouraged by the province’s recent short-term fiscal progress. She notes the annual deficit decreased from $260.5 million in 2016 to $118.9 million in 2017 and was lower than the 2017 budgeted deficit of $246.1 million. MacPherson is also pleased the year-over-year net debt increase went from $541.4 million in 2016 to $167.4 million in 2017 and notes these examples are signs that the province’s fiscal situation is improving.
She remains concerned, however, about the long-term sustainability of the province’s finances. For the year ending March 31, 2017, despite the deficit being smaller than in prior years, the province still incurred its ninth annual deficit, and additional deficits are forecast through 2020. The net debt per New Brunswicker is now about $18,300 in 2017 (2016 - $18,100), with the province’s net debt continuing to climb to almost $14 billion in 2017. MacPherson encouraged the province to develop a plan for debt reduction and control.
“Overall I am satisfied with the government’s fiscal progress, but I am concerned the government incurred a deficit in a year when taxes increased by $261.6 million,” MacPherson said. “Also the government’s spending increased by $362.4 million which is an expense growth rate of 4.2 per cent compared to the 1.7 per cent growth rate in 2016. This increased spending may impact the government’s ability to reach future balanced budgets.”
MacPherson issued a clean (unqualified) audit opinion on the province’s 2016-17 financial statements. This is the second consecutive year she has been able to issue a clean opinion.
“A clean audit opinion shows users of the statements that the numbers and information reported are reliable,” she said.
However, the timing of the release of the 2016-17 statements concerned MacPherson. The office completed its audit on Aug. 22, 2017, but the minister of finance only released the financial statements on Sept. 28, more than a month after receiving the opinion from the auditor general.
“This delay is concerning given the upcoming election in 2018,” said MacPherson. “In my view, audited financial statements are one of the key measures that allows the public to assess government’s performance with respect to fiscal management of public resources and should be available prior to the election.”
The chapters on financial audits can be found in Volume IV of the 2017 Auditor General Report. Volume IV focuses on matters arising from the annual financial audit of the province and Crown agencies. Volumes III and V, also released today, report on Service New Brunswick’s Residential Property Assessment Services, and School District Purchase Cards, as well as follow-up work on prior year’s performance audit recommendations. These volumes and one-page summaries for select chapters are available online.23-11-17