FREDERICTON – Midway through his mandate, Premier David Alward returns to the New Brunswick legislature Tuesday governing a province awash in red ink and struggling with the highest unemployment rate in nearly a decade.

The grim state of the province’s economy is expected to dominate the fall legislative session and could dog the Progressive Conservative government if the province’s fiscal course doesn’t change.

The possibility of shale gas development — an issue Alward says his government will address in the coming weeks — brings the promise of jobs and could be an economic boon.

But it has triggered months of protests from people calling on the government to put the brakes on the idea, with another rally planned outside the legislature Tuesday.

“What we will be doing is laying out our next steps and I think that will be something that will give confidence to people so they understand where we are at and what the next steps are,” Alward said in an interview.

“There aren’t silver bullets that will automatically allow every New Brunswicker to be working. But at the same time we believe that we are putting in place the necessary tools to allow people to be working in New Brunswick.”

Alward has said he supports shale gas development if it can be done in a safe and responsible way, and has promised to enact some of the toughest regulations in North America.

Tom Bateman, a political scientist at St. Thomas University in Fredericton, said the shale gas file could be a tricky one to navigate for the government because it pits economic interests against those of the environment.

“The shale gas matter is all about the economy, and it’s all about employment and a stable source of revenues and viable government program spending going forward,” Bateman said.

“All eyes are on employment and public finances and turning the ship around.”

The government is projecting a $356 million deficit this year, $173 million larger than its forecast in March, because of dropping tax revenues and rising expenses.

Despite that, Alward is holding firm to his promise not to raise taxes. He said he will cut costs instead, though similar promises in the past have not done enough to improve New Brunswick’s bottom line.

“People are hurting and I don’t believe this is the time we should be taking more of their hard-earned tax dollars,” he said.

Brian Gallant, who took the reins of the Liberal party last month, said the government must bring down the growing unemployment rate, which at 11.6 per cent is the highest it has been since 2003.

“Every other province except for us and P.E.I. have gained jobs,” Gallant said.

“When you look at our deficit that has grown, and look at our approximately $10 billion debt, we have a lot of fiscal, financial and economic challenges.”

Gallant said he wants to extend an olive branch to the Tories and make suggestions on how he thinks they can strengthen the economy.

“We hope the current government will listen and will work with us to find those solutions,” he said.

But without a seat in the legislature, Gallant will have to leave some of that work to Opposition Leader Victor Boudreau and the other 12 Liberal members.

Gallant said he won’t ask any sitting members to quit to force a byelection, even though the Conservatives have offered not to field a candidate against him. He said he hopes he can run in a byelection that may be called before the 2014 general election.

In the meantime, he said he will rely on traditional and social media to get his message across to the public.

“And of course, one of the biggest advantages that comes from not having a seat in the legislative assembly is I can continue to travel around the province meeting New Brunswickers in their ridings and their regions,” he said.

The government is also expected to introduce legislation during this session that would reintegrate NB Power. The Crown-owned utility was split into separate subsidiaries under the former Conservative government of Bernard Lord in 2004 in an effort to stimulate private sector investment.

The anticipated passage of legislation to allow for the election of Senate nominees, which was introduced in the spring, is now expected to return to the legislature next year.

The Conservatives return to the legislature with one less member after Dr. Jim Parrott was ejected from the party’s caucus in September. The former heart surgeon clashed with the government over health care, accusing it of not listening to doctors, and now sits as an Independent.

The fall session will open with a throne speech and will include a capital budget in December.

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