N.B. budget’s historic debt may change province’s credit rating, says finance minister

Some groups are frustrated with New Brunswick’s budget.

New Brunswick’s standing with credit rating agencies following a provincial budget which projects historic debt and deficit increases was a focus during Wednesday’s question period.

Finance Minister René Legacy was asked by the Official Progressive Conservative Opposition how bankers would respond to $6 billion of added debt over the remainder of the Liberal mandate.

“When is our government downrating coming, and how much is it going to be?” asked interim PC Leader Glen Savoie.

In response, Legacy said New Brunswick’s financial shortfalls were “not unique.”

“This is not a New Brunswick problem,” said Legacy. “Every province is facing this situation.”

Legacy later told reporters that “if the credit ratings are going to start reducing,” it would be based on several factors.

“Budget is one, the ability to have your economy move is another,” he said. “So, there are a lot of factors that go into it. Right now, we could potentially see changes across the country. But it’s something we’re looking at and discussing through the department with credit rating agencies.”

Morningstar DBRS, the world’s fourth largest credit ratings agency, published a commentary on Thursday in reaction to the budget saying the rapid debt and deficit increase would “reduce flexibility within the current credit ratings.”Right now, Morningstar DBRS has the province of New Brunswick rated ‘A’ – or high – with a trend of ‘stable.’

“While there is the expectation that these investments will support economic activity, New Brunswick’s deteriorated fiscal and debt outlook leaves less room to withstand unanticipated external shocks,” says Aditi Joshiv, Morningstar DBRS vice-president of global sovereign relations, in a statement.

Tuesday’s 2026-27 budget projects a $1.4-billion deficit, and net debt of $15.9 billion. The province’s debt-to-GDP ratio of 30.8 per cent is expected to increase by 2028-29 to 36 per cent.

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