City of Fredericton

The Canadian Federation of Independent Business is taking aim at spending by municipal governments. (CBC)

The owners of small businesses across New Brunswick are taking aim at municipal governments with ballooning budgets.

Jordi Morgan, vice president in Atlantic Canada for the Canadian Federation of Independent Business, says small business owners are being left with the bill for what he calls "extravagance" at cities and towns across the country.

"What we're concerned about is the amount of money obviously that people are paying in taxes and fees and all the other money that you give to your municipal government in order that they can increase their spending at what we are saying is an extravagant rate."

The CFIB has launched a national campaign called Canada's Municipal Spending Watch.

Nationally, Morgan says, municipal spending is out of control and is increasing at four times the rate of inflation and population growth combined.

"There's something seriously wrong with the spending habits of municipalities," he said.

Morgan, who says he met with the chief financial officer in Fredericton this week, blames a combination of growing bureaucracies and demands of labour contracts.

He says the Fredericton numbers, calculated in 2001 dollars, show the average spending per person in the city was $940 in 2001 and in 2010 it was $1071 per person, which represents a growth rate of 14 per cent.

Fredericton doing better than Moncton or Saint John

Morgan says there is a huge wage gap between public and private sector workers and he wants to see it reduced.

"So essentially municipal wages begin to reflect wages in the private sector in similar jobs a little more closely."

He says Fredericton is doing better than Moncton or Saint John at keeping its operational spending under control.

"When we look at the spending per capita growth, Moncton has grown by 25 per cent, Saint John around 23 per cent and Fredericton around 14 per cent."

Morgan says rising taxes and fees at the federal, provincial and municipal levels are pushing many small businesses to the breaking point.

"Folks are saying, 'I simply can't pay any more.'"

"The economy is extremely fragile, people are having a tough time making money in these businesses...these businesses are running with razor thin margins."

Morgan says municipalities should be adjusting their operational spending growth according to population growth and inflation rates to come up with benchmarks for spending that are "sane".

"We can't spend beyond our means anymore," he said. "You can't do it in your household and the municipalities can't do it either because municipalities don't make money, they take money out of your pocket and they spend it and I think it's a matter of being responsible with that money."