David Coon’s Response to the 2015-2016 Budget
Mr. Speaker, I rise today to reply to a most baffling budget. As George W. Bush once said, “it’s clearly a budget. It’s got a lot of numbers in it.” But as an expression of this government’s vision and priorities for New Brunswick, it is perplexing.
It’s a budget that fails to address the deficit, with revenues failing even to keep pace with the small increase in spending planned. By failing to include significant new revenue initiatives, action to end the structural deficit has been kicked down the road until next year. This budget asks those with the greatest means to pay more personal income tax, which is only fair, but at the same time it requires those who have just graduated from university to pay more as well. It puts extra money into early childhood education and then cuts teachers and wraps universities in a financial straight-jacket.
It gives the corporate sector a free pass on increases in income tax and royalties, while continuing the failed practice of providing generous hand-outs. And then it targets the elderly, requiring them to pay more for nursing home care, drug coverage and ambulance use.
Extensive public engagement did take place, and the results were widely distributed in a document entitled “What was Said”. However, “What was Said” it turns out, is not what was heard by the drafters of this budget.
There are some positive elements in the budget which New Brunswickers voted for when they elected this government. Our personal income tax system is now more progressive, requiring the wealthst people in New Brunswick to make a greater contribution to the public good – a measure the Green Party campaigned on as well.
What was said? One of the most frequently contributed idea, according to the report, was to increase corporate taxes. The government even included this suggestion in it news release announcing the top ten ideas most commonly proposed during the consultation. However, corporate income taxes do not go up with this budget, despite the fact that putting our corporate taxes on par with those of Nova Scotia would generate $68 million a year in much needed revenue.
Creating budgets is about making decisions to favour one thing over another. The Minister of Finance says he had no choice in what he did, but of course budgets are all about choices.
Mr. Speaker, the Minister Finance insists we are all in this together, that the principle of fairness guided his decision-making, that those with the greatest ability to pay would be asked to do more. CIBC World Markets reported last week that corporate profit margins have hit a 27-year high with sectors such as wood products and pulp and paper among those leading the way. Forbes Magazine recently reported that the Irving brothers holdings are worth $12 billion, coincidentally about the size of New Brunswick’s debt.
This budget keeps corporate taxes low and corporate hand-outs high. This is what I mean. It’s about choices. Ask corporate New Brunswick to do more, or ask recent university graduates and seniors to pony up. It’s a choice. The Finance Minister chose the latter.
Some of the measures in this budget kick the feet out of the new economy developing in New Brunswick. The growth in our economy is in the high tech sectors, information technology, computer software, energy efficiency services, consulting and the service sector. The biosciences, renewable energy and clean tech sectors are poised for dramatic growth, while there have been only been job losses in the sunset industries involved with traditional resource exploitation.
For our economy to be sustainable, we must successfully make the transition away from the sectors that drove economic growth in the 50s and 60s. The good news has been that job growth in the non-resource sectors has consistently been positive in the past ten years. This is where the future lies. One of the principal failing of the previous government is that they devoted to many public resources in trying to prop up the old sectors. Mr. Speaker, one need look no further than the unsustainable wood supply contract signed with J.D. Irving. While the current government has placed a moratorium on shale gas fracking, it has refused to cancel this detrimental contract.
Mr. Speaker, our greatest resource is our young people, yet the Finance Minister has cancelled the tuition rebate for recent university graduates which enabled young New Brunswickers to build a life at home. I have received so many letters from young people in my riding telling me how access to the tuition rebate made the difference between them staying and leaving. The cancellation in the tuition rebate amounts to increasing income taxes for new graduates who were counting on those tax credits. The federal government provided years of warning to resource companies that it was going to eliminate tax credits in that sector so they would be prepared. This clearly was not the case with the tax credits for tuition rebates.
Mr. Speaker, there was nothing in the Liberal platform or in the Speech from the throne that said this government would cancel tuition rebates, the very thing that has led so many young people to decide to stay in New Brunswick – young people beginning their professional careers here rather than responding to the siren call of extraordinarily high salaries that are to be had in places such as Vancouver or Calgary. It is hard to think of a bigger mistake than cancelling the tuition rebates. Retaining young graduates is part of the solution to developing our economy. Redirecting the money to help university students is an altogether different objective.
Mr. Speaker, people create jobs. People are the engine of growth in the new economy, so we need to keep as many of our graduates as we can because they will be the brains behind the new economy in New Brunswick. We need highly educated innovators and entrepreneurs to make lives here in New Brunswick to build the new economy.
The old tired attempts to create jobs by attracting outside investment and throwing money at corporations doesn’t work. It is discouraging, Mr. Speaker, to hear the same old approaches to economic development being championed by this government. We need to focus on people -led creative, local development based on our own people’s ingenuity, creativity, and innovation. You can see this at work at Planet Hatch in Fredericton. Yet there was nothing in the budget about capturing investment dollars that leave the province to make them available to start-ups here. Community Economic Development Investment Funds are one way to capture investment dollars to make capital available to support local development, and have been used to great effect in the other Maritime provinces. There is no mention of this in the budget.
However, we do have Opportunities New Brunswick, which once again provides a golden opportunity for private corporations to soak up public money. I hope I am wrong.
Who will forget the $9 million provided to J.D. Irving for its railroad, or the $11 million we provided Umoe Solar for its failed solar cells plant in the Miramichi – and in that case, we even through in a million hectare Crown land license as part of the deal. There was of course Atcon. Or how about the $4.5 million loan to install a biomass boiler in J.D. Irving’s Deersdale mill, which is now fueling a mill in Maine, or the $9 million loan to Irving Paper to install a new boiler, or the $15 million loan to J.D. Irving’s Grand Lake sawmill. We are talking about financing a company that according to Forbes magazine is worth $6.5 billion with its ultimate head office in Bermuda. How is that a wise use of public money?
Opportunities New Brunswick is being given a budget of $50 M, $33M of which it can give away, and another $60 M it can provide in loans and advances. And then there is Regional Development Corporation that has another $40 M to handout.
According to the Auditor General, approximately $1 billion in financial assistance was handed-out by the former Department of Economic Development over the last 10 years without formal objectives and without reporting on how effective this was. The only known evaluation of the effectiveness of this kind of financing was done by the Office of Comptroller in 2010: 41% of the $700 million in assistance granted between 2001 and 2009 was categorized as unsuccessful or doubtful, only 15% of the assistance could be considered successful. Of the financial assistance provide to large corporations in this analysis, 10,000 net new jobs were to be created, in addition to those that were to be sustained. Exactly two new net jobs were created.
We could cut millions of dollars in expenditure if we abandoned this failed approach to economic development and job creation, rather than forcing some of our elderly to dig deep to pay for nursing home care or hobbling our universities, or cutting teaching positions.
Mr. Speaker we regularly hear about the importance of growing the knowledge economy. Yet, this budget targets our knowledge institutions, freezing funding to our universities and capping tuitions. This handcuffs our universities in doing responsible planning and in serving their students. While freezing tuitions is welcomed by students, abandoning the multi-year funding arrangements with the universities they attend will hurt students in the end. Saint Thomas University, for example, had some of the lowest tuitions in New Brunswick while Mount Allison has the highest, but zap, they’re both frozen, just like financial support from the province. How are our universities supposed to do their jobs tied up in knots this way?
Bulldozing through the budget, irrespective of the impacts makes no sense. It’s the same approach that was taken to the budgets of our Legislative officers. Ignore the merits of their individual arguments and just bulldoze over the cases they made for their budgets – and zap they are frozen.
Mr. Speaker, another one of the top ten suggestions from the “What Was Said” report was to stop giving away natural resources and charge resource corporations what the resources are worth. Yet, there is nothing in this budget that will increase the royalties on timber, potash, minerals, or natural gas.
On the expenditure side, the subsidies continue, whether it is paying the big forestry companies somewhere in the vicinity of $1,000/ha to convert natural forest into tree plantations and douse them in a herbicide – a herbicide that was recently determined to be a probable carcinogen, or providing biomass from Crown lands at a frightfully low price to burn in government subsidized boilers at the mills as an alternative to burning oil.
Mr. Speaker, while I applaud the decision to increase funding to the Voices of Women forum and recognize the Finance Minister’s insistence that he applies the principle of fairness, this budget has the consequence of disproportionately targeting women. The gender-based analysis the government committed to applying to policy development, does not seem have been used in drafting the budget.
Teaching is a profession dominated by women, so eliminating 249 teaching positions will fall more heavily on women. Cutting teachers is no way to improve education outcomes and it certainly is no way to relieve the pressure teachers are under, operating within a poorly resourced inclusion policy.
Centralizing court services in Saint John is going to make it difficult for women struggling to deal with an abusive partner or work through family or criminal court because they often need the help of victim services and legal aid. Shutting down court services in our smaller centres such as St. Stephen and Sussex and forcing everyone through the Saint John law court will undermine justice for women. With absolutely no public transportation services in many regions of our province, access to justice will become dependent on car ownership.
Targeting the savings of elderly couples when one of them needs long term care will significantly disadvantage women as well. Women tend to live longer. Their husbands, more often than not, require long term care before they do. This will mean that the life savings that should be sustaining women in their senior years could be drawn down to cover the nursing home costs for their husbands, that is until the money runs out or their husbands die. In this scenario, women may be unable to sustain themselves, and could end up in long term care much earlier than if they still had the financial means to sustain themselves independently.
Women, more than men, tend to rely on joint or spousal savings to supplement their pensions or personal savings because pay inequity and time taken off during their childbearing years the size of their pensions. Opening up their savings accounts to government will disadvantage women.
Eliminating the cap on the price seniors pay for nursing home care is unjust and is causing fear and anxiety among many seniors, as is targeting their liquid assets. And to top it off, this budget will require seniors to pay more for their Blue Cross drug coverage as well as covering the cost of ambulance trips. This makes no sense. This budget is sowing fear among our most elderly citizens. Why would the Minister of Finance choose to do this?
What about health care? Among the top 10 suggestions made by New Brunswickers and reported in “What Was Said” was to focus on wellness to create a healthier population. We will spend $2.6 billion in the budget to deal with sickness. Last year, just $14 million was spent on wellness and preventative health care through the Department of Healthy and Inclusive Communities. Will this investment appear somewhere else in the budget? Will a better balance bet struck between $2.6 billion for sick care and $14 million for wellness. I asked the Minister of Finance, but he seemed unsure.
One thing is for sure, the budget reduces funding to Mental Health Program Services. How is it that Mental Health Program Services is cut in half by $9.5 million, and mental health services delivered by the Regional Health Authorities will be cut by $2.6 million, when it is widely acknowledged that New Brunswickers, particularly children and youth have terrible access to mental health care and worse access to assessment and diagnosis.
For the life of me, I cannot understand why money is not being re-allocated to improve access to mental health care for youth and adults alike. We know the vast majority of mental illnesses begin during childhood and youth. We know the vast majority of mental illness among children and youth go undiagnosed. And we know that when help is sought, the waiting times are extraordinarily long, stretching into six, eight and ten months during which time young people can easily go into a downward spiral.
Mr. Speaker, the short-term actions to address our deficit necessarily lie on the revenue side of the equation, but this budget failed to raise that revenue despite the very strong hints from the Minister of Finance that we would see highway tolls and other measures to increase revenue beyond what was announced. This budget provided a chance to ensure that everyone pays their fair share, whether through increases in corporate income tax, increases in natural resource royalties, tolls at our borders, or a pollution levy charged to the companies importing carbon into the province, whether it is coal to fuel a power plant, crude oil at the refinery, or natural gas to fill the pipeline. The Minister of Finance chose against doing any of these things.
Significant changes on the expense side of the budge are possible over the longer term if the shift of primary care from hospital emergency rooms to collaborative care teams in community health centres were significantly accelerated, and if money were reallocated to seriously focus on preventative health care when it comes to physical, mental and reproductive health.
There is significant potential for new revenue for health care if New Brunswick made common cause with the other Atlantic provinces and Quebec to argue for adjustments to the Canada Health Transfer that recognizes the demographic realities of our region.
And who knows what might be achieved around the costs of education and senior care if the system served students and seniors better. Instead, we have hasty decisions made in this budget, targeting teachers and the elderly before the promised education and senior care plans have actually been created.
In balancing our books we must keep our eye focused on our long-term goals and objectives to serve the common good and improve the well-being of our peoples and communities. Budgetary changes must meet multiple goals and reflect our values and aspirations.
Mr. Speaker, I don’t believe this budget meets those tests. Thank you Mr. Speaker.
Response to the 2015-2016 Budget
David Coon – Green Party Leader
April 7, 2015