Moody’s Ratings has issued a new warning about the state of New Brunswick’s finances.

The global credit rating agency changed its outlook for the eastern province from stable to negative, lowering its baseline credit assessment from AA2 to AA3.

Moody’s says the change reflects risks in the province’s fiscal trajectory and its ability to generate revenue.

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The agency says revenue growth is expected to remain weak due to U.S. tariffs and lower population growth tied to stringent federal immigration policies.

It also warns that if the province doesn’t rein in its spending as planned, it will put additional pressure on its fiscal position.

New Brunswick’s finance minister René Legacy told The Canadian Press in a statement that the province welcomes scrutiny from Moody’s as the province moves forward with a plan to grow the economy and manage expenses.

The province’s Liberal government forecasted a historic $1.4 billion deficit in its 2026 budget and projected two additional years of deficits.

Moody’s in March downgraded British Columbia’s rating to AA2 amid deficit budgets there.