Moody’s has changed its outlook for New Brunswick from stable to negative

FREDERICTON – New Brunswick was issued a new warning about the state of its finances Friday as Moody’s Ratings downgraded the province’s fiscal outlook to negative from a prior stable status.

The global credit rating agency also lowered New Brunswick’s baseline credit assessment to AA3 from AA2.

Moody’s in a news release said the change reflects risks facing New Brunswick’s fiscal trajectory and ability to generate revenue amid trade uncertainty with the U.S. and other global economic pressures. 

“In light of external pressures reducing revenue growth, a failure of the province to adequately rein in spending as planned would also exert negative pressure on fiscal strength and the ratings,” it said.

The agency noted that revenue growth was expected to remain weak due to U.S. tariffs and lower population growth tied to stringent federal immigration polices.

New Brunswick’s finance minister René Legacy said the rating agency will be watching how the Liberal government moves forward with its plans to grow the economy and manage expenses.

“We welcome that scrutiny as we look to implement our plans and become more efficient,” Legacy said in a statement to The Canadian Press. 

“We look forward to reviewing the complete report when it is released next week.”

Legacy’s finance department forecasted a historic $1.4 billion deficit in the government’s 2026 budget and projected two additional years of deficits.

Moody’s said the deficit projections delay a return to a balanced budget and “reduces the province’s shock absorption capacity should further negative budgetary pressures arise.”

“The negative outlook also reflects concerns about NB Power’s financial health as it struggles to ensure reliable power generation from its nuclear facility and has relied on high annual rate increases to maintain positive outcomes.”

Progressive Conservative MLA Don Monahan says he’s not surprised by Moody’s downgrade after the budget was tabled in March. 

“With the deficit projections that this Holt Liberal government is providing to New Brunswickers it was just a matter of time before the bond rating got downgraded,” he said. 

Monahan, echoing statements made by other members of his party, said the government should spur the economy by lifting a moratorium on natural gas extraction. 

Moody’s in March downgraded British Columbia’s rating to AA2 after its government unveiled a deficit budget.

This report by The Canadian Press was first published April 10, 2026.