New Brunswick’s growing debt is primarily the result of declining federal transfer payments, according to a new report analyzing the province’s fiscal situation. The report also suggests the closure of some rural hospitals and the consolidation of schools to counteract the province’s financial woes.
The research paper released on Tuesday by the Atlantic Institute for Market Studies finds that New Brunswick faces a“significant”public debt problem. It recommends that spending restraint is the “best available solution”–suggesting some controversial ways to turn things around. The report maintains the cause of the fiscal trouble is largely a loss of federal money.
“Economic weakness in Quebec and Ontario has led to those provinces consuming a greater share of equalization payments and other federal transfers, resulting in revenue losses in New Brunswick and other small provinces,” reads the paper entitled New Brunswick’s Debt and Deficit Problem: A Historical Look.
“New Brunswick’s provincial government has not adjusted to the reality of declining revenues and spending now significantly exceeds revenue, resulting in large deficits and growing debt.”
Authored by University of New Brunswick economics professor David Murrell and Atlantic Institute policy analyst Shaun Fantauzzo, the report examines fiscal indicators over a 35-year period, concluding that New Brunswick’s revenue capacity has declined and spending restraint is necessary to balance the budget and reduce the province’s debt burden.
*This appeared on the May 21 front page of the Telegraph Journal and Daily Gleaner