New Brunswick·Analysis

Liberals' sunny economic outlook shaped by selective stats

The Gallant government is justifying its big-spending budget by pointing to what it calls positive trends, but the Liberals are also asking New Brunswickers to not look too closely at some of the numbers.

New Brunswick's 1 per cent GDP growth projection ranks tied for last among Canadian provinces

The Liberal government has blown a hole in its balanced-budget target, choosing to run a deficit for an extra year as it ramps up spending ahead of the September election. (Stephen MacGillivray/Canadian Press)

The Gallant government is justifying its big-spending budget by pointing to what it calls positive trends, but the Liberals are also asking New Brunswickers to not look too closely at some of the numbers.

Finance Minister Cathy Rogers said Liberal spending has fuelled "consistent growth" in the provincial economy, along with a record-high population and rising retail sales.

And to keep that growth, Rogers said, the government needs to liberally spend even more taxpayer dollars in the coming year — including $73 million in new funding for senior care, youth employment and business competitiveness in the budget she introduced last week.

"It was quite crucial that we look at those three challenges that were identified in the budget and that we make an urgent investment now so we can maintain that growth," Rogers told CBC News.

"These are areas that if we don't give urgent attention to now, we could jeopardize some of the economic growth that we're seeing, and we don't want to do that."

While it's true the economy is growing, the Opposition Progressive Conservatives point out Liberal spending hasn't yielded results in several other areas.

PC finance critic Bruce Fitch said Liberal spending hasn't produced results. (Jacques Poitras/CBC)

They cite a Fraser Institute report indicating New Brunswick has the longest wait times in Canada to see a specialist — a measure that got worse from 2016 to 2017.

The Opposition also pointed out recent test scores showing Grade 6 students falling far short of provincial targets in math and science.

"People can't pay anymore, but if they're going to pay more, let's get results," PC finance critic Bruce Fitch said in his response to the budget.

The most important result for any government is economic growth — and here the Liberals find touting a number that looks OK from one perspective and terrible from another.

The province is forecasting gross domestic product will grow by 1.1 per cent in 2018. Private-sector analysts at banks and investment firms expect growth of one per cent.

I think we have to compare New Brunswick to New Brunswick.- Finance Minister Cathy Rogers

Compared to the last PC government's term in office, that's not bad. New Brunswick's GDP shrank in 2012 and 2013 and grew at only 0.8 per cent in 2014, the party's last year in office.

So the Liberal numbers represent an improvement — though not great compared to the rest of the country: one per cent growth for 2018 would tie New Brunswick for last place along with Newfoundland and Labrador.

British Columbia's economy is expected to growth the fastest, at 2.5 per cent.

Not surprisingly, Rogers doesn't want to talk about the last-place ranking. She'd rather compare this year's number to the Tory numbers.

"I think we have to compare New Brunswick to New Brunswick," she said.

Rogers attributed that one-per-cent growth forecast directly to Liberal decisions to "invest," as she puts it.

"We're trying to take a balanced approach and it is working," she said.

Finance Minister Cathy Rogers speaks at a press conference prior to delivering the provincial budget in the Legislature in Fredericton. (Stephen MacGillivray/Canadian Press)

But the minister would not say how much of the 2018 GDP growth comes from the $73 million in new spending — or how much smaller the growth would be if the new spending wasn't there.

"I'm not going to quantify that right now," she said in an interview. The new spending, she added, is "helping us to maintain our healthy environment that fosters growth."

But economists say the pattern of big spending and only tepid economic growth can't go on.

Even though the province's population has hit a record high of 759,655 people, the labour force shrank by 1.2 per cent, or 4,700 workers, in 2017, according to the government's budget document.

If that trend continues, there will be fewer workers in the province to generate the economic activity, and tax revenue, to pay for a growing number of senior citizens who require more expensive health care.

Green Party Leader David Coon. (CBC)

"We're in a period of low growth based on fundamental changes in our economy and in our society," said Green Party Leader David Coon, who criticized the Liberal decision to spend additional millions this year to help New Brunswick companies export more goods.

"What's going on is government is continuing to try to apply the same old means to prime the economic pump, which are no longer capable of working."

As for Rogers' insistence that the best measure of Liberal growth is to "compare New Brunswick to New Brunswick" — that, too, is selective.

Just last month, Gallant was happy to put his numbers up against those of other provinces, as long as the figures were from 2015.

Premier Brian Gallant delivers the state of the province address on Jan. 25. (Stephen MacGillivray/Canadian Press)

"By working together, by investing in our multi-year economic growth plan we grew the economy at the third-fastest rate in Canada," he said in his state of the province speech.

"Ontario and British Columbia were the only provinces ahead of little New Brunswick when it came to growing the economy."

It's a comparison that worked for the Liberals with 2015 numbers — but that makes more new spending a tougher sell when you plug in New Brunswick's last-place rank in 2018.

About the Author

Jacques Poitras

Provincial Affairs reporter

Jacques Poitras has been CBC's provincial affairs reporter in New Brunswick since 2000. Raised in Moncton, he also produces the CBC political podcast Spin Reduxit.