New Brunswick Premier Brian Gallant says his province has some big challenges to tackle in the months leading up to a provincial election this fall, and beyond.

Gallant went before a province-wide televised audience Thursday night to deliver his annual state-of-the province address, using the speech to focus on business competitiveness and job creation, and provide a preview of Tuesday's 2018-19 provincial budget.

"The most immediate threat to the growth we have seen over the last few years is the protectionist attitude in the United States," Gallant said in an interview with The Canadian Press.

New Brunswick is the most export-dependent province in Canada, and 90 per cent of its international exports go to the United States.

Gallant said Tuesday's budget will include a $20-million economic competitiveness package.

"We're going to have a program where we help small businesses that are geared towards exports be able to increase their competitiveness. We're going to have investments to help the forestry sector with the spruce budworm issue before us as a province. And we're going to make investments to boost the tourism industry, which we believe can be a huge generator of economic growth and job creation in New Brunswick," Gallant said.

"We're also going to invest in things that are going to help us diversify our markets — getting into the Asia market a bit more with our products and services, as well as capitalize on opportunities like the comprehensive economic trade agreement between Canada and the European Union," he said.

The U.S. Department of Commerce announced last November that New Brunswick softwood lumber producers, who had been exempt from U.S. tariffs in the past, will now have to pay 20.83 per cent duty, although producers in the rest of Atlantic Canada will be exempt.

Forestry giant J.D. Irving will pay a lower rate — 9.92 per cent.

Gallant said his government can help exporters without that help being seen as subsidies.

"We often forget that some of the investments that we can make to increase competitiveness the most are education and training, logistical infrastructure such as bridges, roads and airports, and other things that help ensure they have the workforce they need and get their products to market around the world," he said.

During his speech last year, Gallant extolled the benefits that could come from the proposed Energy East pipeline project — only to see it cancelled months later.

On Thursday, he said that just shows the need to diversify the economy and not just reply on one mega-project.

New Brunswick's unemployment rate now stands at 7.8 per cent.

On Monday, Gallant announced that $25 million will be included in next week's budget in an effort to boost the number of young people working in the province.

Gallant said for too many years, too many young people have left the province in search of work.

There was a bright note on the employment front Thursday, with J.D. Irving announcing it expects to create 5,100 jobs in the province over the next three years.

Gallant brushed off the suggestion that Thursday's speech was the unofficial kick-off of his campaign for the Sept. 24 election.

The Liberals currently hold 25 of 49 seats in the provincial legislature. The Progressive Conservatives have 22, while the Greens have one and there is one vacancy.

Tom Bateman, a political scientist at St. Thomas University in Fredericton, said he expects the Opposition will campaign on long term irritants the government has yet to address.

"It has not really addressed emigration from the province of young people. It has not really addressed the lack of good jobs to attract people to stay and to come to this province. It has not really tackled debt growth," he said.

But Gallant said he is looking forward to the campaign.

"We believe we have a good story to tell about what we've been able to accomplish for the people of the province. It hasn't always been easy, but we have made significant progress," Gallant said.

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