New Brunswickers brace for highest taxes in Canada
As in Maine and other states, New Brunswick, Canada’s leaders are confronting the problems of an aging population, unemployment and government debt.
On Feb. 2, 2016, Groundhog Day, the provincial government, led by Premier Brian Gallant, proposed an $8.9 billion (Canadian) 2016-2017 budget raising the combined federal and provincial goods and services tax from 13 to 15 percent, while avoiding major reductions in education and healthcare funding.
The provincial government’s capital budget would total $656 million — $53 million less than last year. More than $400 million is slated for road and bridge construction and maintenance, and building renovations aimed at energy efficiency. Another $108 million is earmarked for investment in the province’s K to 12 school system and $72 million is for healthcare facilities.
The budget also calls for consolidating a number of government services, eliminating 1,300 government jobs in middle management and administration over the next five years, reducing 50 teaching positions and a plethora of other nips and tucks.
Despite the tax increase, giving New Brunswick the highest sales taxes in Canada, provincial finance minister Roger Melanson said the budget will avoid other alternatives — major reductions in education and health spending, or tolls on the highway.
“By investing strategically, we can ensure that New Brunswick has a well-maintained network of public assets, which respond to our ongoing needs and contributes significantly to our safety, economic well-being and quality of life,” Melanson said in a press release. “Brunswickers expect no less.”
The budget would still leave the province with a deficit this year, of $347 million, and net debt that will accumulate to $13.4 billion in 2017 but if all goes according to plan, the province will have a balanced budget by 2020 and 2021, Melanson said.
For the average New Brunswicker, it’s not clear whether the budget offers “a glimmer of spring” or “a long winter still ahead,” said Dean Butterfield, a retiree in Victoria County, NB, who writes a column for the Blackfly Gazette.
The 15 percent “harmonized sales tax” does exempt basic groceries, but it may hit some hard. “If you take your vehicle in for work, not only the parts but the labor as well will be subject,” Butterfield noted.
“Yet, as an alternative to highway tolls, it can be preferable, he said. “Although NB is often referred to as the ‘drive through province’ that argument can be applied to basically any Canadian province. And, the idea that one should be able to travel coast-to-coast in Canada on a free Trans Canada Highway is paramount.”
There are also the concern that “the devil is in the details,” Butterfield said. “For most NB’ers it all comes down to the simple ideas of: ‘What will it cost me? How will it benefit me? Where are the jobs?”
That latter question is one on the mind of Butterfield, who worked in Canada’s Geologic Survey as a well as a prison guard, and it’s one that leads to more questions.
“Where will new jobs come from? With increased competition in manufacturing in a global economy and a shrinking youth growth but a blossoming growth in the senior rate, an other question in NB is often: How will we keep our kids here?” Butterfield said. “We want to see a future where our children and grandchildren will feel confident in their future here in New Brunswick.”
