FREDERICTON – The Graham government on Wednesday passed its last budget before the scheduled fall election, promising to further boost New Brunswick’s economy in the second year of its stimulus plan.

The province’s lawmakers voted 29 to 19 in favour of the budget, which predicts revenue of $7.25 billion and expenditures of just under $8 billion. All Liberals present supported the budget, while all Conservatives opposed it.

The budget marks an increase of 1.6 per cent from the 2009-2010 figures and comprises record capital investments of $896 million for infrastructure.

But critics maintain the budget will push New Brunswick further in the red at a time when the province’s fiscal future seems increasingly precarious.

“They put the province in a situation, a structural deficit, that it’s going to be very, very hard to get out of,” said Tory finance critic Bruce Fitch, whose party has warned the province may have to sell assets such as NB Liquor to deal with budget shortfalls.

The budget vote came less than a week after the auditor general said in his annual report that the province may have a chronic deficit stemming from a systematic imbalance between government revenues and spending.

The Atlantic Provinces Economic Council concurred Wednesday, cautioning in a report that the Maritime provinces could face “deficits that will not automatically disappear as the economy recovers.”

Barbara Pike, vice-president of the Atlantic Institute for Market Studies, said New Brunswick’s deficit is different from that incurred in the rest of the Maritimes, because “it helps put money in people’s pockets” through significant tax cuts for individuals and businesses.

“Yes, it’s running a deficit – so are pretty well all of the other provinces – but at least New Brunswick appears to be on a track that it’s talking about self-sufficiency and it’s talking about balancing its budget, and it’s talking about paying down its debt.”

The New Brunswick government has said it expects a deficit of $749 million in the coming fiscal year, in addition to a $754-million shortfall at the end of this one.

Government projections show the province’s net debt will go up by $1.21 billion to a record $9.6 billion in 2010-2011.

As a result of the recession, the government also delayed its plan to return to a balanced budget by two years to the 2014 budget year.

The province says the expenditures laid out in the budget – which include a record $2.46 billion on health, $996 million on education and $987 million on social development – are necessary to bolster the economy and keep New Brunswickers working.

Finance Minister Greg Byrne said the budget would bring “short-term benefits with a long-term goal to balance books.”

“We believe that’s the responsible thing to do,” Byrne told reporters after the vote, noting that the federal government has similarly focused on economic stimulus.

But Fitch questioned the necessity of some expenses, such as the government’s army of consultants – the “parallel bureaucracy” that has been criticized by Moncton public policy expert Donald Savoie.

The latest monthly financial outlook report from RBC says the province’s stimulus measures “appear to have succeeded in providing a significant offset to the economic weakness.”

However, the report projects the province’s economic growth to reach 2.4 per cent, a downward revision from the 2.9 per cent forecast in its December report.