No Tax Hikes Campaign

Opposition parties, government bureaucrats and special interest groups that had been preparing for a long battle over government cut backs are now breathing a sigh of relief. Without firing a single shot, the Alward government seems to have thrown up the white flag, surrendering in the war over spending cuts and instead placing tax increases on the table.

The Finance Minister who once told the Saint John Board of Trade that New Brunswickers need to expect less from government, is now saying the province is not ready for spending reductions aimed to balance the budget.

A very disappointing concession from a government who, just one year before, stepped up and claimed to be willing to get tough on spending. The premier and his finance minister promised the budget would be balanced in four years without tax increases.  

It’s hard to argue there is no room for cuts after the previous government increased spending by more in any four year period in the history of the province. Spending has gone up $1.7 billion since 2006-07 – that’s a larger increase than during the world wars, the great depression and the stock market crash of the 1980s. Moreover, the second quarter financial update showed spending was up, yet again, and the deficit climbed nearly $100 million more than projected.

To be sure, some small measures were taken to chip away at the government’s spending problem. The most symbolic of which was a 30 per cent cut in MLA pensions and reductions in the number of public servants. However, most of the action taken failed to make much of a dent.

Plans to shave the education budget by a meager 1 per cent led to a battle with the District 1 school board resulting in the department making huge compromises. The Fredericton capital commission was done away with but that didn’t even save a million dollars.

A few half-hearted ideas were floated as trial balloons, but were unsurprisingly shot down. For example, the department of health consulted on cutting free flu shots for those at risk and pregnant women, but backed down after the minister had to admit almost no one wrote in to support the cut. 

Yet, for much less obvious reasons, the government still refuses to do away with cabinet ministers’ private plane that is costing taxpayers about $1.6 million annually.

What was missing from the government’s approach to cost cutting is a few bold reforms – the big ticket items. For instance, the public sector’s rare defined-contribution pension plans are costing taxpayers over $300 million each year. The health care system eats about 34 per cent of the entire province’s budget, yet it’s treated like a sacred cow. Nobody’s even talking about why the government still owns a monopoly chain of liquor stores.

None of these changes would be easy to make. But the alternative of raising taxes comes with its own perils. Already, the economy in New Brunswick is stumbling. A recent report from the Atlantic Provinces Economic Council (APEC) says growth will be just 1.3 per cent next year.

Taxpayers in the province are tapped out. According to Statistics Canada wages are just barely able to keep up with inflation. A tax increase would make it even more difficult to make ends meet.

Before Premier Alward and his finance minister move to raise taxes they should first make a genuine effort to explore all options for costs cutting – that’s the kind of leadership New Brunswick deserves.