FREDERICTON – New Brunswick’s finance minister has begun preparing his final budget before the next provincial election, but Blaine Higgs says no one should expect a fiscal plan full of pre-election goodies.
Despite a promise before the 2010 election to return to balanced budgets by 2014, the Progressive Conservative government has run large deficits each year, with the projected deficit for 2013-14 now at $538 million.
Higgs has blamed lower than expected revenues for the fiscal situation, which means a realistic view of the province’s finances in 2014 as well.
“The people in the province are not expecting us to show any signs of an election budget, they are expecting it to be real,” Higgs said in a recent interview.
Auditor general Kim MacPherson has called the deficits and growing provincial debt a disturbing trend. In her annual report this month, MacPherson said the net debt of more than $11 billion puts a higher demand on future revenue to pay past expenses.
Since becoming finance minister in 2010, Higgs has pushed every government department to find ways of cutting costs and that led to $1 million in savings in the first year, which is expected to grow to $11 million in savings during the current fiscal year.
Higgs has also reduced the size of the public service through attrition. At its peak in 2010, there were almost 53,000 employees in the New Brunswick public service, but that’s been reduced by 2,300 people so far.
Higgs won’t set a target for how small the public service should get.
“What we are trying to do is have every department continue to analyze their needs, because we have significant attrition retirements over the next five to 10 years,” Higgs said.
Despite a pledge not to raise taxes, the government hiked personal and corporate income taxes in July, but Higgs doesn’t expect new tax increases in the next budget.
“I really don’t see any dramatic new taxes or fee increases that aren’t already announced,” he said.
Kevin Lacey, Atlantic Canada director of the Canadian Taxpayers Federation, says the cuts haven’t gone far enough.
“What taxpayers are expecting in budgeting is for government to spend the same amount of money that they collect,” Lacey said. “So far they are getting further and further in the hole.”
He said the government should be looking to privatize NB Liquor and sell the government’s private airplane without replacing it with an executive charter service.
Lacey is also skeptical about the government repeatedly banking its economic turnaround on emerging natural resource projects, such as shale gas, new mines and the proposed Energy East pipeline.
“But those are two, three or four years out,” Higgs said. “We’ve got to live within our means here going forward and keep putting a balanced approach out on our spending and revenue forecast.”
The shale gas industry has faced a strong public backlash in New Brunswick during the exploration stage. Companies have yet to determine if there’s enough gas for a full-scale industry.
The 2014-15 provincial budget will be delivered Feb. 4, more than seven months ahead of the election in late September.
Higgs has begun pre-budget consultations and is seeking suggestions through the department’s website.
As part of his presentation, Higgs says he’s looking for “accelerated expenditure reductions through program changes or eliminations.” But he said decisions on suggestions like amalgamating small schools would have to be made by the departments.
“That is not something for me to decide independently on a financial basis.”
Liberal finance critic Roger Melanson said the government has to be more strategic with its spending and focus on job creation.
“Every time there is a dollar spent there needs to be some significant returns,” he said.
Higgs defends the government’s plan, saying proposed projects from the province’s natural resources will grow the economy.