The 2017-18 provincial budget was released earlier this week and there are some major red flags for the business community. While the Province’s operating deficit may be declining, the bigger concern for New Brunswickers and our member businesses is our collective debt exceeding $14 billion. The government’s revised total debt for the end of 2017 was $670 million higher than their estimate and the 2018 estimate is to add another $362 million. Considering that New Brunswick pays nearly $2 million per day in interest payments, this figure is the major concern for the provincial finances.
Despite a provincial debt that amounts to nearly $20,000 for every person in the province, Finance Minister Cathy Rogers’ budget speech stated that the government is not introducing new revenue measures or expenditure restraint in the 2017-18 budget. We were quite surprised that the government is not attempting to further restrain spending in 2017-18 - it was broadly understood that the Strategic Program Review would require a sustained effort on restraint over multiple years and multiple mandates. Of course, we didn’t want to see new taxes or other costs to business as our members are experiencing tax fatigue and the costs of increases in recent budgets continue to accumulate and act as a drag on the economy.
The Fredericton chamber has recommended that the government do a comprehensive tax policy review to ensure that the province is following jurisdictional best practices and that New Brunswick’s tax structure is aligned with and an extension of the Province’s economic development policy. More than anything, individuals and businesses want to know that their tax dollars are being put to good use. After a two-year Strategic Program Review and a steady stream of tax and cost increases over that time, we would have expected some progress to be made on the debt.
There are individual measures in this budget that have potential to have a positive impact and are smart investments by the government. Increased funding for population growth measures is very positive, particularly in the long-term. Economic immigration and retaining international students will be key to fulfilling our population and skilled labour needs in the future. Similarly, increasing the tourism budget will pay direct dividends in all parts of the province. We see the model of Fredericton’s Downtown Community Health Centre as an efficient and effective way to deliver health care - hopefully it can be replicated throughout New Brunswick.
In our 2017-18 pre-budget submission, we recommended that the government invest in education at all levels as a long-term growth strategy. Post-secondary educational institutions are not only credential-granting bodies - they are also the hub of entrepreneurship, innovation and skills-acquisition in our communities; they are the centrepiece of our 21st century economy and one of the safer investments a government can make in terms of return on taxpayer investment.
Enhancing access and participation in post-secondary education is therefore a concrete return on investment for the province of New Brunswick. Not only will it increase the number of individuals in the skilled workforce, but it also has significant financial benefits in its own right. In order for New Brunswick and its businesses to take advantage of potential opportunities, job creation and upskilling must be a singular strategy, with roots in our post-secondary education system. New Brunswick is already competing on a global stage in the knowledge sector and has room to grow with the right investments in infrastructure and skills training.
We appreciate that the government has a difficult task of reducing the debt in the short term while investing in long-term growth solutions. It has to make the right decisions on where to put limited taxpayer funds, but therefore must be willing to make tough decisions in other areas. Without getting the debt reduced and ultimately eliminated, no investment will matter. The business community is looking to government to provide leadership and sustainable solutions. We all are.
Krista Ross is CEO of the Fredericton Chamber of Commerce. With more than 950 members, the Fredericton Chamber of Commerce is one of Atlantic Canada’s largest chambers of commerce. A dynamic business organization, the Fredericton Chamber of Commerce is actively engaged in policy development that affects the competitiveness of our members and of the Canadian business environment. It’s vision is Community Prosperity Through Business.