New Brunswick's Mission Is Far from Accomplished
This article was published in the Telegraph-Journal on April 30th, 2016
In 2003, former U.S. President George W. Bush called a news conference aboard the aircraft carrier USS Abraham Lincoln. Bush’s address, beamed live around the world, declared combat operations in Iraq complete. As he spoke, behind him hanging on the bridge of the vessel, was a giant banner with the words “Mission Accomplished” fluttering in the ocean breeze.
History showed that the announcement was premature. The U.S. suffered more casualties in Iraq after the announcement than they did before and the fighting continued for years after Bush’s declaration.
If you have been watching the New Brunswick government in the last short while, you would conclude they too believe their mission to steady the economic ship and wrestle down the provincial deficit has been “accomplished.” Why else would they start spending more money on risky investments and new entitlement programs?
They seem to have forgotten about the budget they introduced just a few earlier. It showed the government is spending $347 million more this year than they bring in. The debt is so big that every man, woman and child owes $18,000 towards it.
Income taxes rose by the largest amount in the past 30 years in 2013. Starting July 1st the price of just about everything is about to go up, as the HST will be raised by two percentage points, making it the highest sales tax in Canada. The province has the third highest unemployment rate in Canada with nearly 40,000 people in the province struggling to find jobs.
These priorities have already taken a back seat and the government seems ready to spend, spend, spend.
The government is now promising “free” tuition to university students. But nothing the government does is ever “free.” It turns out, the “free” tuition will benefit only a few students not already eligible for grants and bursaries at the lower-to-middle income levels, but be paid for by cutting money given to all students through tax credits. This policy will come with a big price tag – one that is only likely to increase.
“Free” tuition is now a new entitlement program, and like other entitlements it will expand and never contract. The government says “free” tuition will cost $25 million this year and $27 million by 2019-20. But those could just be a fraction of the eventual costs. The Minister of Education Francine Landry said as much. She told the Telegraph-Journal and other media that she would consider raising the $60,000 family income threshold for receiving “free” tuition at a later date. The province hasn’t yet even announced all the details of “free” tuition and already they are talking about expanding it.
This announcement made for a snappy headline. But it’s irresponsible at a time when the government cannot even fund basic services like health care or maintain our crumbling roads without running large annual deficits.
If promising “free” stuff was not enough, the government went out and bought a shipyard.
Taxpayers are now the proud owners of the Bas-Caraquet Naval Centre. This is a shipyard that could not pay their bills and would have been shut down had the government not stepped up to buy it.
All in all, the government plans to spend another $38 million that they do not have and was never budgeted for.
If the government was serious about getting their books in order, why would they engage in such a risky scheme? The only logical answer is politics. The shipyard sits in an area that has strongly supported the Liberal Party over the years, and now it’s being rewarded.
Engaging in an economic development strategy based on politics instead of good public policy is exactly the problem that got us into the $70 million ATCON mess. It seems we never learn from past mistakes.
Now is not the time for the New Brunswick’s government to fly a “Mission Accomplished” banner. Just the opposite. We need our politicians to stick to their guns and focus on the real job at hand: getting New Brunswick back to work, and getting the province’s finances back in order.
Kevin Lacey is Atlantic Director with the Canadian Taxpayers Federation you can find more information at taxpayer.com