The Bruce Report

There is, for example, the “tax-and-spend” indictment issued by the propertied class and its right-wing fellow travelers. There is the “cut-and-run” complaint leveled by social reformers representing the interests of the downtrodden. And there is the time-honored “good-news” assessment cherished by the perpetually confused middle class.

But for healthy, unaligned skeptics, the New Brunswick government’s 2006 budget deserves a different, if no less unruly, moniker. How about “sleight-of-hand”, or “shell-game”, or “desperate-attempt-to-curry-favor-among-voters-who-ought-to-know-better-but-who-actually-don’t?”

That’s because what’s missing in this budget is, in fact, a budget.

Think about it this way: When you review your paycheque, you know which parts of it need to cover, in sequence, housing, food, clothing, transportation, retirement and education savings, contingencies, debt, and discretionary spending.

If you’re like most people, you deal with a capped revenue stream, and do your damnedest to fatten your contributions on each line item of the balance sheet. If you’re somewhat more entrepreneurial, you devote yourself to expanding your income in every way your talent, drive and circumstances allow.

The bottom line, however, is always the same: You either live within your means, or you grow the means within which you live.

Not so with provincial governments – or, at least, this provincial government. The premier’s promise to New Brunswick is to cut taxes, increase spending, and deliver a modest surplus just to keep the tails of international credit watchdogs wagging.

And he will accomplish this remarkable feat, in a province where the population is actually shrinking, by banking on the dramatic increase, since the beginning of the decade, in federal government transfers, and reallocating provincial funds previously earmarked for investment and export development to other, more voter-friendly ‘priorities’.

I’ve crunched the numbers, but just to prove that I’m not the only crank crying in the wilderness, here’s what Moncton-based economic researcher and commentator David Campbell recently had to say about Budget 2006:

“Consider $397 million more in Equalization in 2006-2007 than in 1999-2000; $265 million more in health and social funding from the feds in 2006-2007 than in 1999-2000; and $63 million more in ‘conditional grants’ from the feds in 2006-2007 than in 1999-2000.

“That’s a total of $630 million more [from Ottawa] on a declining population base. There’s 48 per cent more in new Equalization than from new provincial corporate and personal taxes combined.

“Meanwhile, there’s only $6.4 million for ‘investment and exports’. That’s one-tenth of one per cent of the entire budget. There’s only 8.6 million for ‘strategic assistance’. Now flash back to 2000-2001. In that year’s budget, the Tories allocated $15.8 million for investment and exports, and $25.3 million for strategic assistance.

“So, to sum up, New Brunswick’s population is in the first period of decline since the Great Depression. And the provincial government has cut the budget for attracting businesses and increasing exports by 50 per cent since coming into office. In addition, they have cut the budget for strategic assistance by 70 per cent.”

Exquisite.

The long-term economic health of New Brunswick (indeed, of every jurisdiction in the world) literally depends on its ability to generate more, not less, commercial capacity. If governments have a role to play, surely it is to encourage business relocations that bring new skills, capital, infrastructure and, yes, tax rolls to their regions.

This provincial budget mocks the principle of rational economic development by abrogating these crucial responsibilities in favour of the very sort of dependence on national largess that keeps other Canadians comfortably convinced of our ineptitude.    

Now is the time for real, effective action from Fredericton. Not more smoke and mirrors.

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