by: Charles Cirtwill
No one was celebrating more enthusiastically as the Conservatives swept to power in New Brunswick then the Nova Scotia Finance Minister.
Well, perhaps the gas jockeys and store operators in Amherst might have been cheering a bit too, but rest assured Graham Steele was Mr. Alward’s biggest fan. You see, Mr. Steele has bet his political life on the fact that New Brunswick will have to – have to – raise taxes.
So please, raise the HST, raise personal income taxes, raise user fees, raise something, anything, Mr. Alward. It will make Mr. Steele look good and it will be a token of friendship to the shopkeepers of Amherst, who have been losing sales to the people you represent in Sackville.
The competitive gap between Nova Scotia and New Brunswick is a deep one and if the tax cutting, and talk of expenditure controlling went on any longer, Nova Scotia simply would never have caught up. Yes, the Liberals under Shawn Graham may well have been forced to slow their cuts down, or not cut as deep into programs as they had promised. But it was certain that politics being what it is, the Liberals were far more likely to continue on adding debt and lowering taxes then the Conservatives.
The Conservatives are far more likely to add both debt and taxes (after all, a little of both will go a long way to “solving” N.B.’s fiscal imbalance). An indebted New Brunswick with lower taxes, while mixed news for New Brunswickers, was the kiss of death for Nova Scotia.
Problem solved. The Tories have no ideological baggage on this front. OK, in theory they are supposed to be the party of tax cuts and small government, but let’s be realistic here.
On this day, in this New Brunswick, Mr. Alward has no skin in the game. He is free to slow or even stop the “Graham” tax cuts; indeed, he is far freer then Mr. Graham would have been to raise the HST, introduce new user fees and expand, not cut, programs. You can hear the cheering from Halifax even now.
Now, to be fair, Mr. Alward shouldn’t raise the HST just to make Mr. Steele his new best friend forever. In fact, raising the HST should have been part and parcel of the tax reform undertaken in New Brunswick from the very beginning.
The Organization for Economic Development and Cooperation (the OECD), among others, has consistently argued that higher consumption taxes, greater direct supports for individuals in need of support, and lower income taxes (which are taxes on jobs) is the best recipe for growing an economy and ensuring the greatest participation in the resulting prosperity. Lowering personal taxes without increasing consumption taxes and without controlling spending leads to exactly what you now have in New Brunswick, a structural deficit.
So, congratulations, Mr. Alward. Now please, move quickly and cut Nova Scotia a break. Raise some taxes, any taxes.
I, for one, have a trip coming up to New Brunswick and I know the folks in Amherst would appreciate it if you could make it cheaper for me to buy gas on their side of the border, not yours.