Perhaps the most honest assessment of the Graham budget I have witnessed. This is not about Liberals vs Conservatives to my mind... this is about the people of Atlantic Canada taking responsibility to lead for ourselves. If we don’t, we will suffer the death of a thousand cuts through incompetent leadership and apathetic citizens. To paraphrase an old proverb, we must ask ourselves: Did we inherit New Brunswick from our parents, or are we simply borrowing it from the future generations of New Brunswickers? I think we’re borrowing it.... and it deserves more than pathetic leadership and higher taxes.
N.B.'s backsliding budget
By Neil Reynolds, From Wednesday's Globe and Mail
Eighty-seven fewer babies were born last year in New Brunswick than the year before. One hundred and twenty-four more people died. The province's natural increase in population declined again, falling below 300 - in a population of 750,000 people - for the first time ever. Only a decade ago, it was 3,000. The province remains trapped in demographic decline. Fewer births and more deaths.
Fewer young children and more old people. Fewer teenagers and more retired people. Fewer self-sufficient families and more people dependent on government. One person in seven is a senior citizen. People between 50 and 64 years form the fastest-growing segment of the population, expanding last year by 20 per cent, and people over 50 now comprise more than one-third of the population.
It took a while. In the first decade after Confederation, 1867-77, New Brunswick's population grew 30 per cent. A century later, in the decade 1967-77, it grew 10 per cent. In the first decade of the 21st century, assuming present trends persist, it will have fallen for eight consecutive years - marginally but inexorably. (Driven by people leaving the province, New Brunswick's population has declined 0.1 per cent a year for four years; 0.3 per cent last year; and the provincial government anticipates a sixth "slight decrease" this year.) From July 1, 2005, through June 30, 2006, the province shrank by 3,000 people, the largest decline in its history - despite the arrival of the most immigrants (1,387) in 25 years.
New Brunswick isn't alone in losing people in Atlantic Canada, a region with 11 per cent of Canada's population 50 years ago, 7 per cent in 2007. (Newfoundland lost 7 per cent of its population in a single five-year period, 1996-2001, and now has roughly the same population it had in 1957.) And New Brunswick isn't alone in making policy mistakes. But New Brunswick has now chosen a unique way to make things much worse.
In its March budget, the first since taking office in October, the Liberal government of Shawn Graham increased taxes across the entire economy - raising personal income taxes retroactively, rescinding corporate and small-business tax cuts, raising liquor prices. At the same time, the province has hit homeowners with dramatic increases in property assessments - in some instances, charging them a $50 "service fee" to pay for the requisite paperwork.
You can almost always tell when governments deliberately deceive. Here is Finance Minister Victor Boudreau as he explains why the government increased provincial taxes by $100-million and increased the province's debt by $356-million (to $7-billion): "Structural change was required to realign revenues and spending," he said. "[This] is a transactional budget which lays the groundwork for future transformational change."
This assertion, in all its puffy bureaucratese, is so utterly bereft of meaning as to render it insulting. In fact, the government conceded in a background paper that it raised taxes to pay for its election promises - such as hiring an additional 280 teachers in a province with declining enrolments. The province already employs more public sector workers than the Canadian average.
This kind of destructive "structural change" - returning the province to the old Maritimes tradition of tax-and-spend - ends more than 10 years of modest government restraint. (The province's last increase in personal income taxes was in 1994.) Started by former Liberal premier Frank McKenna and continued by Progressive Conservative premier Bernard Lord, New Brunswick had slowly worked itself toward Mr. McKenna's announced goal of economic self-sufficiency, an objective that implied much more reliance on work and much less reliance on welfare.
In its abrupt change in direction, Mr. Graham's "transformational" government has now chosen to retreat from work and to embrace welfare, to make public sector growth more important than private sector growth. On the margin, where many New Brunswick families live, some businesses will close.
Some marginal families will migrate. Some marginal people will need further increases in public assistance. All together, more people will be rendered marginal.
Although it progressed too slowly, New Brunswick had moved in the right direction in the past decade. The number of people with jobs (355,400) hit a record high last year. Capital investment, at $5-billion, reached a record high.
Personal income was rising steadily. The Irving liquid natural gas terminal, now under construction in Saint John, will make the province an important East Coast "energy hub." But the province is now making a huge mistake, investing in dependence rather than in self-sufficiency. Despite Mr. Graham's appointment of a Secretariat for Population Growth (upfront cost: $3-million), the overall tax increases will make it harder, on the margin, for working families to cope - and will beget not a single child.
