By Ian Munro
As appeared on page D9

New Brunswick is beginning to see the start of a virtuous economic cycle; unemployment is at its lowest level in 30 years, Saint John is poised to become a major energy hub and the province is making progress on trade agreements to help businesses expand markets. That is the road to self-sufficiency.

Following yesterday’s budget many soon-to-be Albertans, former New Brunswickers, will start their tales upon arrival out west with the phrase, “Ya know, a funny thing happened to us on the road to self-sufficiency.”

There comes a time when promises and good ideas must be backed up by sound actions and policies if they are to succeed. The Graham government has missed its opportunity with the budget it delivered to New Brunswick yesterday. Raising personal income tax and rescinding on past tax breaks offered to both corporations and small businesses indicates the province has gotten lost along the way to self-sufficiency.

The only silver lining in the cloud of pending financial doom and gloom is that it has at least managed to avoid forecasting a deficit; let’s hope it will also be honest enough not to run one. The proposed $37.1 million dollar surplus is a positive sign, it shows that at least the Department of Finance is keeping a positive attitude. The premise that New Brunswick will go from a forecast deficit of $400 million to that figure may well show they have also kept a sense of humour. So where is the money going to come from?

Economic growth? Reduced spending? Not based on the numbers provided in yesterday’s budget. Provincial expenditures are expected to grow by 2.8 per cent while real GDP growth is only forecast to be 2.3 per cent.

Cuts to the civil service? Probably not. New Brunswick employs more civil servants than the national average and it might be a logical place to start. Granted front line expenditures have been frozen but this measure would have been more effective had the budget actually targeted reducing the burgeoning civil service rather than just trying to contain it.

The only place left to look and, if the trend continues the place where self-sufficiency dream ends, is taxes. The provincial budget proposes tax increases on personal income as well as reversing decreases in corporate and small business taxes. Higher taxes are counter-productive to the goals the Graham government has set for New Brunswick.

Rising corporate taxes send the wrong message to businesses from a region where economic development has traditionally proven challenging. And it does so for a relatively modest budgetary gain of $17 million. Businesses compete for customers and politicians serious about attracting businesses must show that they are willing to compete. This budget shows that New Brunswick is content to sit on the sideline and keep corporations, and all of their economic benefits, out.

What’s worse is that the budget will go a long way towards stymieing innovation through its treatment of small business. Small and medium size businesses are the primary source of new jobs in our economy. They need a welcoming environment. Tripling their taxes in one fell swoop is not welcoming.

If all that weren’t enough, the budget also proposes higher personal income taxes.

The question we should all be asking this government then is: How is New Brunswick expected to attract businesses, immigrants, and keep its skilled workers at home while raising their taxes?

The truth is – it won’t.

Ian Munro is the Director of Research with the Atlantic Institute for Market Studies, a non-partisan public policy think thank based in Halifax.