New Brunswick

Victor Boudreau releases review with proposed cuts, tax hikes

The New Brunswick government is proposing a long list of cuts, measures to boost revenue and overhauling the delivery of government services to eliminate the province's $600-million structural deficit.

Strategic program review lists $600M in possible cuts and revenue-raising ideas for the provincial government

Health Minister Victor Boudreau, the minister responsible for the strategic program review, released a report with $600 million in possible cuts and ways to boost revenues at a news conference on Friday. (CBC)

The New Brunswick government is proposing a long list of cuts, measures to boost revenue and ways to overhaul the delivery of government services to eliminate the province's $600-million structural deficit.

Health Minister Victor Boudreau, the minister responsible for the strategic program review, announced the report at a news conference on Friday.

Boudreau told reporters the final decisions will be made in the next provincial budget.

The cabinet minister said he wants to hear from New Brunswickers about the options. He said there will be opportunities to provide feedback on the long list of cuts and revenue-raising ideas.

"We want to provide for more opportunity for New Brunswickers to comment on the report. But it is not necessary another round of public consultation, like I did before," Boudreau said.

The Liberal cabinet minister said the provincial government is committed to hitting the $600-million target. He also said the government will not be deterred by the impact on its approval ratings.

Boudreau acknowledged that some ideas are popular but only to a point.

"A lot of people think we should have tolls, but no one wants to pay them," Boudreau said.

He indicated that people living in urban areas want the tolls on highways.

Green Party Leader David Coon said he believes the report should be sent to a legislative committee so it can hold hearings on the various options.

"We've got the time according to the minister, a couple of months," he said.

'Get it done'

Boudreau and Michael Horgan, a former federal deputy minister of finance and the chair of the review's task force, discussed the report on Friday. (CBC)
Michael Horgan, a former federal deputy minister of finance, who led the review's task force, said the action is needed to correct the province's fiscal situation. He said the province is in "very poor shape."

He noted the fifth largest payment in the New Brunswick budget is for service on the provincial debt. He pointed out that is while interest rates are low.

When interest rates start to increase, he said it will only ratchet up the financial pressure on the provincial government and could create a situation where deeper cuts would be needed.

"The alternative, I think, is something that down the road that New Brunswickers wouldn't want to face," he said.

"If you are going to do it, do it. Get the job done because you don't want to be doing this exercise again five years from now, try and get the job done now."

One financial watchdog says the list of possible remedies to the financial problems is too heavily weighted on taxes.

Kevin Lacey, the Atlantic director of the Canadian Taxpayers Federation, said the report spends little time looking at how to trim the provincial government.

"The government is making taxpayers wallets thinner, while keeping the government fat," Lacey said in a statement.

He said the maximum amount of money proposed in government cuts is $392 million compared to $531.5 million in new tax or revenue measures.

Review was an election promise

The strategic program review was a key election promise for Premier Brian Gallant's Liberals and it was launched in January.

Over the past week, Boudreau has been releasing several smaller initiatives that could be adopted by the provincial government.

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Some of the ideas have included selling the naming rights to certain government-owned buildings, allowing drivers to renew their vehicle registration for two or more years and consolidating government call centres.

Boudreau said on Thursday he wanted these individual ideas to get some publicity, because he expects proposals on the Harmonized Sales Tax and highway tolls will get most of the attention.

The report listed several options to turn around the province's financial situation.

Some of the options for spending cuts in the report, and the potential savings:

  • Reducing the civil service: $20 million to $45 million

  • Cutting routine spending on items such as computers, phones and printing; limiting the carrying-over of unused vacation time: $10 million to 15 million

  • Merging government call centres: $3 million to $5 million

  • Merging non-medical laboratories: $1.5 million to $3 million

  • Cutting tourist information centres: $200,000 to $300,000

  • Reducing legislative officers: $400,000 to $700,000

  • Increasing classroom sizes: $50  million $70 million

  • Cutting teachers to match declines in enrolment: $10 million to $12 million

  • Cutting education assistants to match enrolment declines: $3 million to $6 million

  • Privatize school custodial services: $5 million to $7 million

  • Changes to funding for universities to base it on performance targets: $15 million to $45 million
  • Local government reform, including making voluntary municipal mergers easier and giving municipalities the power to promote job creation: $25 million to $30 million

  • Changes to motor vehicle registration renewals: $200,000 to $500,000

  • Privatizing highway maintenance:  $11 million to 22 million

  • Modernizing the Department of Transportation and Infrastructure: $10 million to $14 million

  • Selling surplus government properties: $1.5 million to $3 million

  • Transforming health care, including the possible closure of some hospitals or their conversion to community health centres, and the "realignment" of services in major urban hospitals, such as centralizing some specialized services in single locations, $50-80 million.

  • Creating a single medical laboratory system for the entire province: $20 million to 23 million

  • Shifting more employees to a shared-risk pension plan: $7.5 million to $9 million

Revenue options with potential amounts are:

  • Selling naming rights to provincial buildings: $1 million to $2 million

  • Privatizing the running of government data registries: $8 million to $10 million

  • Partial sale of NB Liquor or changes to how it operates: $15 to $20 million

  • More private sector running of parks and attractions: $3 million to $5 million

  • Cracking down on illegal tobacco: $2 million to $4.5 million

  • Higher tobacco tax: $7 million to $25 million

  • HST increase to 15 per cent: $175 million to $295 million

  • Increase to corporate income tax: $12 million to $35 million

  • Highway tolls, with eight electronic toll booths around the province that would cost, e.g. $24 for a round-trip car trip from Moncton to Edmundston and $96 for a truck: $60 million.

  • Diesel tax hike: $40 million to $45 million

  • Increase to real property transfer tax: $4 million to $10 million

  • Increase to insurance premium tax: $15 million to $20 million

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