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"As this government's finance minister, it is difficult for me to stand here in front of you today announcing such a significant deficit when one of our campaign commitments was to deliver a balanced budget in each year of our mandate," Legacy told reporters before tabling his budget in the legislature.

He said "revenue windfalls" enjoyed in previous years were not materializing and U.S. President Donald Trump's threats of a sweeping 25 per cent tariff on goods from Canada has cooled off the province's economy.

"As you can imagine, preparing for today, for this speech, with the daily pivoting in direction on tariffs, countermeasures and exemptions, was a challenging task," Legacy said in his budget speech. "The challenges will undoubtedly carry on into the foreseeable future."

In the Liberal government's first budget since winning election in October, total revenues for 2025-26 are forecast at nearly $13.8 billion, while total expenditures before the $50-million contingency fund are $14.3 billion.

The government has taken steps to build "flexibility" into the budget to be able to nimbly react to challenges from tariffs such as support for businesses and workers and diversifying the economy, he said.

In addition to the contingency fund, the Liberals have a tariff response package of $112 million, including $25 million for a business support program offered through Opportunities New Brunswick, he noted.

Legacy said the government has put together a "transformational team" to look at "creative ways" to increase revenues. 

He said the government has been asked if it is going to raise taxes, but he opted against it in this budget. "That is not what we are looking at right now," he told reporters.

While building flexibility in the budget for challenges brought on by the trade war, Legacy said the government will honour its main health-care promise, earmarking $4.1 billion for the department, which is about $293 million more than last year.

Some of the budget's other areas of focus are education, housing and services for victims of domestic violence and sexual violence.

The total budget for the Education Department is about $2.1 billion, compared with $1.9 billion last year. "Enrolment continues to grow, so we need to ensure we have proper facilities for students to attend and the right number of dedicated staff to teach and support them on this journey," he said.

The government said it will boost the budget of the New Brunswick Housing Corp. by $36.6 million, an increase of 18.6 per cent over the previous year.

"We will also create a dedicated provincial sexual violence unit to investigate the most severe and complex sexual violence in human trafficking cases," Legacy told reporters.

Richard Saillant, an economist and former vice-president of Université de Moncton, called the budget austere. Revenue growth is only four per cent, while spending growth is at five per cent compared with nearly 10 per cent in previous years, he said. 

Demographic changes, including a potential decrease in immigration, further complicate the fiscal situation along with an unpredictable neighbour to the south, he added. Saillant said he was not surprised by the extent of the deficit, calling it "a tough budget for them."

Glen Savoie, leader of the Progressive Conservative Opposition, said he had hoped to see more measures to diversify the economy, including natural resource development and mineral exploration.

The government should also be looking at beefing up its tourism promotion, he said. "With all of these tariffs, a lot of ºÃÉ«tvs are going to be staying home. They're going to be vacationing at home. So is there any extra money to try to attract more ºÃÉ«tvs to vacation here?" he asked. "I don't know, because there was nothing mentioned in the budget."

Green Leader David Coon said he was not surprised by the deficit because money needs to be spent to redress public services. 

"I said it's very likely we're gonna have to run deficits, and, while the premier would not acknowledge that during the campaign, it's clear that I was correct," he said.

This report by ºÃÉ«tvwas first published March 18, 2025.

Note to readers:This is a corrected story. A previous version said the budget of the New Brunswick Housing Corp. would increase by $18.6 million.