FREDERICTON - The New Brunswick government is reversing previous income tax cuts and increasing tobacco taxes in an effort to boost revenues as it fights a growing deficit projected to hit $479 million.
The $8.5 billion budget delivered Tuesday for 2013-14 includes a deficit nearly $70 million higher than its last estimate.
As of July 1, personal income taxes will rise to 2006 levels — a measure expected to generate $136 million in revenue for 2013-14.
A single person making $40,000 a year would pay an extra $3 per week in income taxes, Finance Minister Blaine Higgs said.
"These measures will result in the largest increase in tax being for people in the top two income brackets," Higgs said.
The corporate income tax rate will also be increased to 12 per cent from 10 per cent on July 1, resulting in an estimated boost of $17 million in additional annual revenue.
Smokers will pay higher taxes on tobacco as of Wednesday — up two cents per cigarette.
The government will also continue a three-year plan to reduce the size of the public service through attrition, filling only critical positions, Higgs said. The public service was decreased by 637 jobs in 2012-13.
Higgs said the government will also launch a program aimed at reducing sick leave by 20 per cent by March 2015 for a savings of $20 million.
"This budget strikes a balance between the difficult decisions we have made to address spending and increase revenues while still making strategic investments to strengthen our economy," he said.
The net debt is expected to reach $11.6 billion by March 2014, an increase of $594 million. That's $15,365 for every man, woman and child in the province.
Higgs has also promised to sell the government airplane. In the past, the Progressive Conservative government has only said it would consider the idea.