FREDERICTON, June 25 /CNW/ - Although the New Brunswick economy faces
weakness on the commodity price and export fronts, still-strong capital
investment has buffered the downturn, according to the Provincial Outlook
report from BMO Capital Markets Economics.
"Real GDP will likely contract a better-than-average 1.3 per cent this
year in the province, before rebounding 1.7 per cent in 2010," said Robert
Kavcic, Economist, BMO Capital Markets.
A number of major capital projects like the $1.4 billion Point Lepreau
nuclear plant upgrade and $2 billion Canaport LNG terminal have helped keep
the province's labour and housing markets relatively steady in the face of
weak U.S. export demand, particularly in forestry. "New Brunswick has not lost
any jobs since the start of 2008," said Kavcic. "However, a number of these
important projects are winding down, removing key pieces of economic support."
Other construction projects and a two-year, $1.2 billion government
infrastructure spending program should help fill most of the void heading into
2010. At the same time, a restructuring of the tax system will provide $144
million in tax savings in fiscal 2009/10, rising to $380 million by fiscal
2012/13. "This will come in the form of both personal and general corporate
tax cuts, the latter of which will lead to the lowest rate in Canada by 2012,"
Against this backdrop, the Province of New Brunswick is projecting a
significant widening of its budget deficit to $741 million in fiscal 2009/10.
This marks the largest budget deficit as a share of GDP (2.7 per cent) since
fiscal 1987/88, but is accompanied by a plan to return to balance in four
The complete report can be found at www.bmocm.com/economics.
For further information:
For further information: Media Contact: Lucie Gosselin, Montreal,
email@example.com, (514) 877-8224; Internet: www.bmo.com