by Joshua Errett
Appeared on page A4
New Brunswick’s annual budget arrived with a thud Tuesday, with personal and corporate taxes rising along with the provincial debt.
In his first-ever crack at the books, Finance Minister Victor Boudreau weighed expenditures against revenues and managed to predict a $37-million surplus. But critics quickly reduced his efforts to two words: tax increase. It is the first hike since the last Liberal government under Frank McKenna raised personal income taxes in 1994.
The Opposition Progressive Conservatives immediately pounced.
“This is way too much. There was no need for any increase at all. None!” said former finance minister and interim Tory Leader Jeannot Volpé, calling it “an attack on the middle class.”
“If that’s the way (the government) wants to be self-sufficient, they have a long road ahead of them.”
Volpé funneled his outrage into one catch phrase, which he repeated several times: “Hands in your pockets.”
Boudreau, though, defended the move as a way to avoid a deficit for the year.
“You have to give New Brunswickers the services they expect, and that’s what we’re doing with this budget,” he said. “We had to raise the tax side of things, but that’s to keep everything in check. We have to make sure that the expenses and the revenues line up. Nobody – not one single person – told me we should be having a deficit.”
Boudreau also shifted some of the blame for the increase on the tax-cutting policies of the previous Conservative government.
“We all enjoy lower taxes. But when the level of taxation is insufficient to ensure the continued provision of essential public services, it needs to be addressed.”
Outside the legislature, taxpayers’ advocates maligned the increases.
John Williamson, federal director of the Canadian Taxpayers Federation, said the Liberals are proving themselves to be a tax-and-spend government.
“Under both McKenna – in his later days – and (former Premier Bernard) Lord, there was a focus on trying to keep taxes down. The new Liberal regime seems to have thrown that out the window,” he said. “That is not a recipe for success we’re seeing here. It’s a recipe for economic stagnation.”
Williamson further pointed to the increased net debt, now up by $355.9 million, as a negative.
“The government has increased taxes, yet they’re still increasing debt at the end of the day,” he said, adding that “debt amounts to a tax increase on the next generation of taxpayers.”
Ian Munro, director of research for the Atlantic Institute for Market Studies, suggested the budget was counterproductive to the province’s well-stated goal of reversing negative population growth.
“With personal taxes going up, it will make moving to other provinces with lower taxes that much more attractive,” he said. “That isn’t going to help keep people in New Brunswick.”