Response to the Budget: An Opportunity Missed

Mr. Speaker, Monsieur le Président, j’ai le plaisir de présenter ma réponse au budget proposé pour l’année fiscale de 2016-2017. Je comprends que formuler un budget ces temps-ci n’est pas facile. Nous sommes dans une période de basse croissance pour l’année prévisible, ce qui est le cas pour tous les économies matures à l’intérieur et à l’extérieur du Canada. Nous observons aussi un plus grand nombre de gens quittant le marché de travail, prenant leur retraite. Il s’agit simplement d’une question de démographie.

But as both the Minister of Finance and Minister Responsible for the Strategic Program Review have repeatedly said, this budget is about choices.  Choices reflect our priorities, so I want to speak to those priorities with the constituents in mind that I see in my riding office every week.

The Minister of Finance ended his budget speech quoting Nelson Mandela, saying that in preparing this budget that the choices his government made reflect our hopes, not our fears.

It’s a questionable choice for a quote to end a budget speech.  If this government had decided to take on the formidable power and influence the Irving family has on the choices governments make, I would say quoting Mandela might be apt.  Or if this budget was about raising people out of poverty, a quote from Martin Luther King Jr. or Tommy Douglas would be appropriate.  The Minister says the budget reflects the values and needs of New Brunswickers, I don’t see it.

New Brunswickers need meaningful work, but according to this budget 1,300 good middle class jobs are going to be eliminated over the next five years. That’s three times the jobs that were eliminated by Potash Corp. in Sussex.  Hundreds of other jobs will be eliminated by this budget, this year with the centralization of government contact centres, Department of Public Safety reginal offices, and local land registry offices. Jobs will also be eliminated by contracting out public sector work to the private sector, whether it is the maintenance work provided by 200 seasonal jobs at government garages, the administration of pensions, the management of the motor vehicle registry, the management of the Extra-Mural Nursing Program, or nurses themselves such as the seven extra-mural nurses who are to be let go in Saint John at the end of March.  I thought this government’s priority was job creation not job elimination, but this budget cuts job from Castalia to Caraquet.

New Brunswick’s public service is the 4th smallest in the country, representing 20% of all jobs in the province.  It makes no sense to cut large numbers of jobs.  It will just strip the province of its ability to protect and empower our people – to advance the common good based on solid evidence-based decision-making.

Contracting out public functions to the private sector removes the moral responsibility the public service has to citizens and will end up costing more in the end.

Private employees are responsible to their owners and shareholders.  The relationship with government becomes contractual and secondary in terms of accountability.

And of course government loses the ability to control it costs between contracts in this arrangement.  Both the Auditor Generals of New Brunswick and Ontario have reported that contracting out public functions have routinely proved to be more expensive, not less.

It costs us nearly $30 million a year to have Medavie Inc. manage our public ambulance service.  Paramedics are paid by the province, but report to private sector bosses.  Contracting out the management of our much-loved Extra-Mural Program to Medavie Inc. will mean our nurses, dieticians and social workers who work for us, will be forced to report to corporate bosses.  New Brunswickers didn’t ask for this during the consultations.

Privatizing public functions is to continue apace, with the creation of something called the Alternative Service Delivery unit in the Department of Finance that will look at what other public functions are to be handed over to corporations.  This is likely to mean fewer jobs and certainly lower wages.

The Minister of Finance refers to this as finding efficiencies to save money, but it really is a wage-busting strategy.

This could explain the contradictory decision to bring the management of the Arts Board into government, which is also claimed to be a way of finding efficiencies. I don’t see how you can have it both ways.

The budget seeks an additional $20 million in revenues from NB Liquor, which will lead to the further privatization of the retailing of alcohol.

The evidence is clear.  Making alcohol more readily available through private retailers, normalizing it as a product in a convenience store or grocery, encouraging impulse buying with open coolers located near the cash where you pay for your gas, increases alcohol use, which in turn increases the incidence of diseases such as breast cancer, cardiovascular disease and diabetes, birth defects, and injuries from drunk driving.

Not only will increasing alcohol use not make New Brunswick a better place to raise a family, but it will impose costs on government that far exceed the increased revenue it seeks.

In addition to letting private corporations take over public functions from retailing alcohol to managing Extra Mural nurses, this government has decided to allow corporations to invade public space.  Corporations will be able to buy the rights to name government buildings, parks and bridges and advertise in the public areas of government offices.  This corporatization of government in this way is detrimental to the health of our democracy, a blow to our dignity, and frankly just humiliating.

The contracting out of public functions and public spaces to corporations will mean government will increasingly look like a corporate government, if we continue down this road.

The plan to legislate binding interest arbitration out of existence, justified to help out municipal governments facing rising payroll costs for police and fire services, will be extended to universities and the private sector, including construction, manufacturing and retail.  This draconian legislation will undermine the ability of New Brunswickers to exercise their constitutional right to bargain collectively.

This budget fails to change the long-time practice of cash hand-outs to corporations.  I found at least $130 million budgeted for corporate hand-outs.  The evidence from past experience is that this kind of largesse creates few jobs, fails to strengthen our local economies and sets up unfair competition against existing firms, but it does make it possible for the party in power to further its partisan ends.

I agree that corporations play jurisdictions off one another to see where they can get the biggest subsidy, and I understand that economic blackmail is practiced by some who threaten to shut down or pull-out unless they receive the subsidy they seek.  It’s time to just say no.

The state of our economy should be enough evidence that this approach to economic development and job creation doesn’t work.  Billions of dollars of public funds have disappeared down this corporate rabbit hole over decades. Are we any better off?  No.  It’s time for government to look for solutions to developing our economy here at home, working with our communities.

It’s time to look at home to build on what we have here, rather than focus all the efforts on beating the bushes elsewhere to see what we can flush out.

The $130 million dollars going to corporate handouts would be better spent in increasing income assistance levels to New Brunswick’s 40,000 families dependent on social assistance so they can climb out of poverty and contribute to our economy.  Being able to spend money on both food and rent, on clothes and school supplies, will put more money into local business.  Being able to eat healthier food and maintain a warmer apartment will result in healthier families as well.

Think of increasing social assistance rates as both local economic stimulus and preventative health care – which is exactly what it is.

The decision to introduce dollar maximums and frequency limits for the poor to access Social Development’s Health Services Program is a jaw-dropper.  I find it hard to believe people are receiving motorized wheel-chairs they do not need, or are overusing orthopedic shoe inserts.

It’s not just those on social assistance that this budget has failed, but the 20,000 New Brunswickers living on minimum wage who don’t have enough to make ends meet.  A study done by the Common Front for Social Justice found a single parent family with one child runs short at least by $5,286 a year to meet their most basic needs.  A single parent family with 2 children falls short by $9,299.  It gets worse for couples. A couple with one income and a child is short $11,887 a year and if that family has two children, they are short $12,661.

Once again we have a budget that fails to allocate money to public transportation programs forcing those living in poverty to spend money they need for basics on cabs instead.  It gets worse.

As I said, poverty is a determinant of health.  As people are increasingly forced to travel for basic health care services because they are not available locally, those without a vehicle and no access to public transportation are unable to travel for basic preventative medical screen procedures such as mammograms or appointments with ob-gyns, or to access therapeutic abortions.

This budget does not appear to address the shortage of subsidized housing, the long-waiting lists, or the inadequate management of NB Housing apartments. One thing that would immediately help, would be to significantly increase the portable rent supplements so low income seniors and those with disabilities or mental illness can stay in their apartments when their life circumstances change and they can no longer afford accommodations best suited to their circumstances.

As for people who are homeless, particularly youth, I am reminded that the Safe Harbours, the only general youth homeless shelter in southern New Brunswick had to close its doors, while the Miramichi Youth House hangs on by a hangnail. Why do we beggar those non-profits who are providing essential public services to serve the most vulnerable that government is not providing?

The budget does begin to address an important issue and that is the fact that we have not been bringing in enough revenue to meet our needs since the former Shawn Graham government dramatically cut corporate and income taxes, precipitating the structural deficit.  This has been aggravated by the new normal of low growth and a shrinking workforce as seniors retire – forcing dramatically increase borrowing to cover the resulting deficit.

I support the decision to increase corporate income taxes, but the opportunity was missed to put them on par with Nova Scotia.  As a region in the Maritimes we share common challenges and should work closely together to adopt solutions.  Our tax regimes should be consistent.

More importantly the opportunity was lost to shut down tax loopholes used to avoid paying the corporate taxes that are assessed. What percentage of corporate taxes are actually ever received by government?

This budget would have also been an opportune time to announce a cooperative effort with the federal Department of Finance to tackle the problem of tax havens, which allow the wealthiest corporations to drain profits off to places like Bermuda, legally avoiding paying their fair of the public services we need.

As for the wealthiest among us, the flip-flop on tax changes to the upper portion of their high salaries in this budget went too far.  I can understand, given the federal plans for increasing taxes on the upper portion of high income earners, that this government might want to adjust the tax rate for those with incomes over $200,000, but to reduce the tax rate for the portion of income for high income earners over $150,000 makes no sense.

The opportunity missed here was to end the preferential treatment for taxing capital gains and dividends.  The largest portion of the earnings of the wealthiest New Brunswickers do not come from salaries, but from investments.  The preferential tax treatment on the capital gains and dividends paid from these investments mean the wealthiest member of our society I am guessing pay less tax on their earnings than half of New Brunswickers.  Asking people who can afford it to pay a little more, means changing the tax structure for capital gains and dividends.

This budget does what everyone who hasn’t been sleeping under a rock, knew it was going to do, raise the HST.  The HST is truly a tax on everything which is why I have argued that we need to renegotiate the arrangement with Ottawa to give the provincial government the flexibility to remove the HST from necessary purchases such as clothing, heat, power, food, bus passes, for example, while increasing it on luxury items and services.

I support the refundable HST credit to be paid quarterly, but I note while necessary this is not sufficient to compensate for the increased costs those living in poverty will face.  Increased electricity costs, increased food costs and increased tax on everything creates a burden on the tens of thousands of poor New Brunswickers who live cheque to cheque, payday to payday loans to payday.  The quarterly HST credit does not help the cash flow or in their case the cash trickle week to week.  This is an additional reason why both our income assistance and minimum wage rates must increase now.

Once again tobacco taxes have been increased, but alcohol products were spared. Why?  They cause no less havoc to health than alcohol, and arguably more.  The costs the overuse of alcohol imposes on public spending are in fact much higher.  It feels like a double standard to me.

An opportunity was missed in this budget to take a more innovative approach to generating revenue.  That is expanding the idea of taxing tobacco to discourage its use to alcohol, drinks containing high fructose corn syrup, and putting fees on carbon and pollution.  The idea being to tax and charge for the things we want to discourage, while reducing the cost of things we want to encourage such as healthy food, recreation, efficient vehicles, public transportation, insulation products and services, heat pumps, and renewable energy technologies.

Another opportunity was missed in terms of improving revenue, and that is the establishment of tolls at our borders.  New Brunswick is known as the drive-through province for a reason, so we should be ensuring that those who drive through contribute to the costs of maintaining our roads and the companies exporting or importing goods by truck pay their fair share for the wear and tear.  It couldn’t be a better time with the price of fuel so low.

The Minister of Finance insisted it was a choice between the HST and tolls.  It’s a false choice.  I can understand making a choice between increased diesel taxes and tolls, but the decision was made to avoid both, presumably in response to lobbying.

According to the budget speech, New Brunswickers told government that the best way to contain costs in health care is to be proactive and healthier.  Early detection, better disease management, reducing obesity and use of tobacco (not alcohol) and reducing poverty were cited.  Yet the budget contains no initiatives, other than once again adding taxes to tobacco, to reduce these negative health determinants. To continue to say a priority is being placed on preventative health care and do little about it is disingenuous.

The same can be said to the rhetoric around addressing mental illness and improving access to mental health care.

I want to put our health care spending in context.

– Les dépenses en soins de la santé au N-B à 6, 352$ par personne nous place au 5e rang des 10 provinces.

– La Nouvelle-Écosse et le Manitoba dépensent un pourcentage plus élevé du leurs budget sur les soins en santé.

Yet in New Brunswick we spend only three percent of the health care budget on mental health care. Almost three quarters of youth in Fredericton have no idea how to even access mental health care.  Only 20 percent of children and youth who need mental health care receive it, yet 70 percent of mental illness first occurs during childhood or youth.

The Minister of Finance talked about preserving government’s core functions to justify choices his government has made in this budget.  Well government’s core functions are to protect and empower its people and communities. I see little in this budget that will enhance the government’s ability to protect and empower the poor, children, women, seniors, or those struggling with chronic illnesses or disabilities.

Initiatives for senior care have been deferred to the end of the year.  Seniors can’t wait.  We are told investments in families will be made after the deficit is slain.  Families can’t wait.  Youth and children can’t wait.

However, if you are a corporation looking to locate in New Brunswick, you don’t have to wait.  You can be assured a place at the front of the line and their will cash waiting for you.

Mr. Speaker, my reply to the budget speech may sound harsh, but all you have to think about are the single moms, the disabled, the youth, the seniors, and all the others in our constituencies who need help and can’t find it.  That is why I cannot support this budget.