FREDERICTON – Just as New Brunswick careens toward a deficit of nearly $1 billion, neighbouring Nova Scotia is pledging to post a balanced budget in the coming fiscal year.

Charles Cirtwill says New Brunswickers should wonder why.

“If I was a taxpayer in New Brunswick it would certainly be ringing alarm bells to me. I’d be saying, ‘What exactly is the difference between their finances and ours?'” said Cirtwill, of the Atlantic Institute for Market Studies, a Halifax-based think-tank.

“All debt is simply a deferred taxes. Someone at some point is going to have to pay that back. So if your government is running a deficit, go home and thank your kids for picking up the bill.”

On Tuesday, a New Brunswick government spokesman said the Liberals expect to run an $800-million deficit in the coming fiscal year, an astounding figure that will force program cuts and “hundreds” of public sector layoffs.

Plus, the government expects to run deficits for four straight fiscal years, until 2012-13.

Yet on Wednesday, Nova Scotia Premier Rodney MacDonald said his Conservative minority government will balance the books during that same stretch, the fiscal year 2009-2010.

Cirtwill said it’s unclear why only New Brunswick is forecasting a huge deficit, when both province’s have promised large public spending packages – intended to boost the economy with money for construction projects.

The Liberal government argues its trip into deficit territory is mainly due to higher fuel costs, disaster relief from last spring’s floods and payments made to bail out sagging provincial pensions.

But Cirtwill says the numbers don’t add up.

“My sense of this deficit is that it is really just covering losses,” he said. “Something is a little skewed.”

Cirtwill said most economists agree that deficit spending is acceptable – given the current economic climate – if it appears to deliver results that will aid the economy.

And clearly, he said, government is obligated to help those in need.

“But we also have to balance that obligation with the obligation to future generations,” he said. “If we are over-spending today to under-deliver tomorrow, all we’re doing is putting the problem off.

“Though that works for politicians because their windows are so narrow. It becomes some other premier’s problem.”

Craig Brett, an economist at Mount Allison University, says New Brunswickers should be concerned about the size of the projected deficit.

He said it equates to $3,600 per family in the province, and marks a large portion of the overall provincial budget – which last year totalled $7.1 billion.

“The sky isn’t falling because of this, but it’s not the kind of thing you want to do every year,” he said, noting it’s actually a good time to borrow money because interest rates are low.

“It’s not as menacing as a similar-sized deficit would have been 20 years ago “¦ But an upturn in interest rates and then you’ve got problem.”

Brett said he expects Tuesday’s budget will outline the extent of the province’s fall into the red, as well as a plan for pulling the province out of the hole.

“If you don’t want to run deficits year after year, something’s got to give,” he said.

The $800-million deficit marks a huge reversal in the province’s fiscal fortunes.

Last year, the Grits predicted a $19-million surplus for the current fiscal period, but the province is currently $285 million in the red.

Last month, the province’s auditor general predicted the province’s net debt could grow from $7 billion to $9 billion by 2011, because of the deficit situation. He urged the Grits to draft a plan for managing the growing net debt and the resulting interest payments.