There's plenty of fodder for slaying New Brunswick's debt
This column was published in the New Brunswick Telegraph-Journal on February 21, 2019.
Move over, debt. There’s plenty of room for spending cuts in the coming New Brunswick budget. Premier Blaine Higgs has set goals to manage the debt, cut taxes and increase competitiveness and he needs to find savings to do it.
We’ve all heard the ridiculous, dramatic claims from critics that spending cuts will make the sky fall. But the key is finding places to scale back without dramatically impacting services and, in New Brunswick, there’s plenty to be found.
New Brunswickers have lived under a decade of deficits as governments have lived well beyond their means, racking up unsustainable debt. If spending had been capped at the rate of inflation and population growth starting in 2011, the government would have easily run a nearly $300 million surplus in 2018-19.
New Brunswick’s spending is a significantly larger share of GDP than any other province other than Prince Edward Island. In the province’s third quarter update, spending had risen $83.3 million over budget.
The problem is clear. But where to cut?
For starters, New Brunswickers are paying twice for worse service. The province’s political hot potato – language duplication in New Brunswick’s bureaucracy – simply isn’t a good use of tax dollars.
What matters most is that families receive quality services, from timely life-saving medical procedures to high quality education that produces competitive results. Paying for double the bureaucracy takes money away from these goals.
From double the school busses to double the bureaucrats, New Brunswickers are paying more. Taxpayers bankroll two health authority presidents’ salaries, between $250,000 and $299,999. They’re paying for double the number of top health bureaucrats pulling in $150,000 to $299,999 each, plus travel, benefits and perks. End the double-bureaucracy and put the money in to emergency rooms and classrooms for New Brunswickers instead.
Looking long-term, government employee compensation is a major cost to taxpayers. Like all government spending, compensation has to be kept at a reasonable level, reflective of the resources available to government at the time – not a future based on tax hikes.
Government employee unions push for raises even if taxpayers don’t have the money to cover them. The government can ensure arbitrators consider whether taxpayers have the cash before inking any sweet deals. A bill introduced in Ontario in 2012 provides a good blueprint for ability-to-pay legislation, which New Brunswick can introduce to help ensure that the outcomes of labour arbitrations between government and unions do not hinge on the future ability to raise taxes.
Ending the province’s addiction to corporate welfare is a good place to save money without impacting services in the slightest. Government after government has promised New Brunswick is “open for business” by throwing subsidies at corporations. Taxpayers dished out $34.1 million on Opportunities New Brunswick last year.
Instead of letting politicians make bets on big businesses with taxpayers’ money and watching young people leave the province when those gambles go bad, New Brunswick should provide tax relief for real job creators: entrepreneurs.
It’s time to start thinking differently about spending, asking how taxpayers can get the best value for dollars spent, rather than throwing good money after bad.
Don’t believe those who tell you there is nowhere to cut in the upcoming budget. To create a better environment to attract jobs, spending needs to be reduced – and there is plenty of fat to trim.