New Brunswick

New Brunswick budget: No new taxes or spending cuts

New Brunswickers will see no new tax increases or spending cuts under the Gallant government's $9.4-billion budget for 2017-18 that was unveiled Tuesday.

Provincial debt projected to grow to $14.4B as government focuses on what it calls citizens' priorities

Finance Minister Cathy Rogers is applauded after tabling the 2017-2018 provincial budget on Tuesday. (James West/Canadian Press)

New Brunswickers will see no new tax increases or spending cuts under the Gallant government's $9.4-billion budget for 2017-18 that was unveiled on Tuesday.

While the province is bringing in more money and spending more money, it is on track with its deficit-reduction targets, the Liberal government says.

In the first budget delivered by a female finance minister in provincial history, Cathy Rogers projected next year's deficit will be $192 million, and she maintained the province is on track to eliminate the deficit in 2020-21 with a surplus of $21 million that year.

However, Rogers said the disastrous ice storm in late January and early February could have an impact on deficit projections for the last fiscal quarter of 2016-17 and the first quarter of 2017-18.

While the government is on track in its efforts to eliminate the deficit, the province's debt continues to climb.

The budget projects the debt will hit $14.4 billion by the end of 2017-18, which is about $1 billion more than was forecast in last year's budget document for the end of 2016-17. It also amounts to about $19,000 for every New Brunswicker.

Interest on the debt will cost the province $701 million in 2017-18, making it the fifth-highest expenditure behind the departments of Health, Education and Early Childhood Development, Social Development and general government.

No apologies

Cathy Rogers became the first female finance minister to deliver a budget in New Brunswick on Tuesday. (CBC)
In her budget speech, Rogers made no apologies for the measured approach to reducing the deficit.

"New Brunswickers want their government to get our finances in order, but not at the expense of our social programs," said Rogers.

"We are reducing the deficit in a steady, responsible way."

Rogers said her budget puts emphasis on what New Brunswickers have told government are their priorities: health-care, education and jobs.

"We are listening to New Brunswickers," Rogers told reporters.

"Today's budget is a reflection of the voices and priorities of New Brunswickers."

However, the Fredericton Chamber of Commerce found the debt figure to be troubling.

"Considering that New Brunswick pays nearly $2 million per day in interest payments, this figure is the major concern," said president Paul Simmonds.

Krista Ross, the CEO of the organization, was surprised the government didn't do more to restrain spending next year.

"It was broadly understood that the strategic program review would require a sustained effort on restraint over multiple years and multiple mandates," Ross said.

More money coming in, going out

The province will be bringing in an additional $362 million next year, including $200 million in HST revenue in the first full year of the 15 per cent rate.

But while more money is coming in, more money is going out, with the government spending an additional $323 million next year.

Kevin Lacey of the Canadian Taxpayers Federation said that when Brian Gallant's government increased the HST by two percentage points on July 1, 2016, it said it was done to deal with the deficit.

"Yet today the government is instead increasing spending on goodies," Lacey said.

"Working families are having a hard time making ends meet and they deserve a break. They don't deserve more spending by the government."

Education spending

The 2017-18 budget increased education spending to $1.19 billion, up from $1.14 billion last year. (CBC)
Education spending is set at $1.19 billion in 2017, up from $1.14 billion last year, representing an increase of about 4.9 per cent.

Post-secondary education also gets a budget boost of 5.4 per cent with an additional $7 million to push spending in that department to $619 million.

By Jan. 1, Rogers said the provincial government will double its budget for its daycare assistance program that assists families struggling with the cost of daycare.

Another early childhood initiative is to provide an extra $2.4 million for preschool autism interventions on top of the $1.4 million that was devoted to that purpose in 2016-17.

Health-care spending climbs

The health care budget is set at $2.65 billion, which is about $65 million more than last year.

"New Brunswickers have made it very clear that they do not want deficit reduction targets to be met at the expense of health care," said Rogers.

Rogers said the province will be adding an extra six positions to train doctors through its agreement with the school of medicine at Dalhousie University.

Another health initiative announced by Rogers was to expand the vaccination program for the human papilloma virus to include boys.

The government also intends to introduce legislature in the coming session to establish community support orders as a means to work with people with mental health issues in order to support the "deinstitutionalization" of mental health care.

Rogers also introduced a supplementary capital budget that provides for an additional $58 million for construction, maintenance and  improvements to nursing homes over the next three years.

The government will be pursing partnerships with the private sector to add to the supply of nursing  home beds.

Jobs-creation efforts

The budget document lists few specifics about job-creation efforts, other than stating employment is expected to grow through public infrastructure projects and a rebound in exports.

The only specific measure for the business community is a reduction in the Small Business Income Tax rate to three per cent from 3.5 per cent.

It is the third consecutive decrease in that rate an in line with the Liberals' 2014 election promise to lower the rate to 2.5 per cent in its mandate.

The Canadian Federation of Independent Business was "disappointed" the government's efforts to help small and medium-sized businesses didn't go beyond that single measure after it had pushed for measures to ease the tax burden on businesses.

In the last two years, business owners have had to deal with higher property and fuel taxes, personal income taxes, increases to the minimum wage and the increase in the HST. Meanwhile, businesses face another increase in the minimum wage, increased premiums for workers' compensation and the Canada Pension Plan, and an increased rate for employment insurance, the CFIB said in a release.

"It is disappointing to see that government has not recognized the needs of small businesses in this budget," said Louis-Philippe Gauthier, the organization's director of provincial affairs. "It should come as no surprise that only 14 per cent of our members say that government understands the realities of running a business in the province."

Tourism gets $8M boost

The Department of Tourism, Culture and Heritage is getting an $8-million increase in its budget, putting the department's total budget at $60 million.

But all of the additional $8 million will be devoted to tourism initiatives, said Rogers.

Rogers said the increase was the result of "having heard from New Brunswickers that tourism is one of their highest priority areas for untapped economic growth."

A comprehensive tourism development strategy will be released later in 2017, said Rogers. 

ABOUT THE AUTHOR

Alan White is a Fredericton native who has been working as a journalist since 1981, mostly in New Brunswick. He joined CBC in 2003 and is now a senior producer. He can be reached at alan.white@cbc.ca

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