More and more debt – Telegraph Journal – 2 February 2018
“It’s disappointing the premier has decided to drive the deficit back up after driving it down the last three years,” said Green Party leader David Coon. “There’s no excuse for it.It suggests to me, this is just election spending.”-David Coon
Article by : JOHN CHILIBECK Legislature Bureau
Brian Gallant’s Liberal government is breaking its promise to eliminate the deficit by 2020-21, arguing it has to make urgent investments that will push getting the books back to balance by another year.The decision angered the business community, which has been urging the government to stop spending more than it takes in and address its enormous debt, which is now expected to be $14.5 billion by the end of fiscal year 2018-19.
That’s about $19,000 owing for every single person in New Brunswick.It’s also $1.4 billion higher than March 31, 2015, when the Gallant government was in its infancy.Finance Minister Cathy Rogers, who is fond of saying her Liberal government has met or exceeded all its fiscal targets since coming to power, defended running the province further into the red to reporters at a news conference Tuesday morning, where details of this year’s $9.6-billion provincial budget were released.
“We have made a very conscious, carefully deliberated decision to delay our return to balance one year,” she said. “We think the risk of not giving attention to these urgent matters was greater than the risk of delaying balance by one year.”Speaking to reporters at the legislature following the budget speech, Progressive Conservative finance critic Bruce Fitch held up visual aids to show how little progress the Liberals had made, despite record spending in health and education.
One showed a graph with wait times in hospitals going up. The other was a blank page to illustrate the fact standardized tests for students in upper grades were cancelled last year because the government said there were staffing issues.“The taxpayers of New Brunswick are giving a billion more dollars on the revenue line and yet were still having trouble getting results.”
John Wishart, interim CEO of the Greater Moncton Chamber of Commerce, called the budget a failed opportunity.
“The minister began her budget speech by saying her government ‘was facing our challenges,’” he said in an interview Tuesday. “We see it as government having postponed meeting our challenges.”Wishart also questioned how urgent the spending needs were, given the province’s steadily aging population, exodus of young people and skilled labour shortages have been problems for years.
“They are only suddenly urgent because it’s an election year.”Much of the extra spending was already announced in recent weeks – $28 million more to support youth employment and retention, including a new internship program in the civil service for recent graduates, $20 million more to help seniors, including better wages for home care and special care home workers, and $25 million more to help spur the province’s economic competitiveness.
Rogers said all of this extra spending was to address three urgent needs: youth leaving the province for better opportunities, seniors who are not getting the proper care they need and protectionist trade policies south of the border that are making New Brunswick businesses vulnerable.“If we don’t spend extra on seniors care, we’re going to spend more on the back end in higher levels of care and more health costs,” she told reporters. “And if we don’t invest in economic competitiveness, we’re going to see more vulnerability with our businesses that are export-oriented.
“And if we don’t help our youth engage with employment here in New Brunswick, we have the potential of losing them altogether.”With a provincial election only seven months away, the 2018-19 deficit is forecast to grow to $189 million – even greater than the current fiscal year’s latest quarterly estimate of a $115-million deficit.
The province has already run deficits for 10 years in a row and the latest prediction shows it will total 13 consecutive years before returning to balance.
Meanwhile, the Nova Scotia Liberal government posted a $21 million surplus in its latest budget update in September, and Prince Edward Island’s Liberal government boasted a $600,000 surplus at budget time last spring.
The red ink on New Brunswick’s books means debt servicing costs will be $675 million in the upcoming fiscal year. That’s greater than the budget for several government departments.
There’s also much more spending in health (a $98-million, or 3.7 per cent hike), education (a $73-million, or 6.1 per cent boost) and tourism (a 2.5-million, or 4.1 per cent increase).There are no tax hikes in the budget. The only tax cut is to small businesses, who were already told they could expect their rate to drop from three per cent to 2.5 per cent this April.
“It’s disappointing the premier has decided to drive the deficit back up after driving it down the last three years,” said Green Party leader David Coon. “There’s no excuse for it. There’s $165 million in extra revenue to work with to fund the social initiatives in the budget.”“It suggests to me, this is just election spending.”
NDP leader Jennifer McKenzie told reporters she thought the government could have reduced the deficit further by putting a bigger income tax on the wealthier one per cent. Kris Austin, leader of the People’s Alliance, said the government appeared to have its priorities skewed, boosting tourism spending while winter maintenance on rural roads continues to suffer.
2018-19 provincial budget highlights
Deficit – $189 million
Debt – $14.5 billion
Revenues – $9.4 billion
Expenses – $9.6 billion
Service payments on debt – $675 million
Health care budget – $2.8 billion (+3.7 per cent)
Education budget – $1.3 billion (+6.1 per cent)
Tourism budget – $63 million (+4.1 per cent)
Post-secondary education, training and labour budget – $645 million (+4.1 per cent)
Extra spending for youth employment and retention – $28 million
Extra spending to help seniors – $20 million
Extra spending to spur economic development – $73 million
Economic growth projected for 2018 – 1.1 per cent