Quick budget assessment

Since you won’t get this from any other source (likely), here’s my quick and dirty take on the new provincial budget from an economic development perspective:

$6.4 million for ‘investment and exports’ – which I assume is for investment attraction and export development. That’s 0.1% of the budget. That’s one tenth of one percent of the budget. Remember that the staff costs and other overhead comes out of this number. Lovely.

$8.6 million for ‘strategic assistance’. Given that they gave $7.5 million to Molson – I guess they are planning to do one or two deals next year that require ‘strategic assistance. I get goose bumps just thinking about it.

Now, flash back to 2000-2001 – the Tories first year to bring down a budget. In that budget they allocated $15.8 million for ‘investments and exports’ and $25.3 million for ‘strategic assistance’.

So, to sum up. New Brunswick population is in the first period of decline since the Great Depression. And the government has cut the budget for attracting business and increasing exports by half since they came into office. In addition, they have cut the ‘strategic assistance’ budget by 70%.

Can it get any worse.

Yep.

Alberta actually increased it’s economic development budget by 12%.

Ontario raised its economic development budget from $230 million last year to $351 million this year – a 53% increase.

Quebec just announced it is “earmarking $1.4 billion in additional funding for sustainable economic development. These priority initiatives are part of the government economic development strategy, The Québec Advantage.”

$1.4 billion.

And now for the grand finale. From the 1999-2000 budget to the 2006-2007 budget, total government expenditures in New Brunswick are up 36%. In Ontario, budget expenditures are up 46% but they added almost 1 million people in the same time frame. New Brunswick, has actually witnessed a slight population decline in that time frame.

The New Brunswick Tory government is a wonder. You’ve heard of tax and spend Liberals? In New Brunswick, we have ‘cut taxes and spend more Conservatives’.

Here’s how Bernard Lord’s Tories can actually cut taxes and massively increase spending while facing a declining population:

$397 million more 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
$63 million more in ‘conditional grants’ from the Feds in 2006-2007 than in 1999-2000

Yes, you say, but we must have raised some additional taxes from New Brunswickers?

You are correct, sir.

$249 million in personal taxes
$21 million more in corporate taxes
$85 million more in property taxes (this grinds me the most)
$63 million more in gasoline taxes (as I have said, they cut personal taxes by a piddly amount and made more than enough back from gas tax increases)

So to sum up,

Over $630 million more from the Feds ($400 million of it straight Equalization) on a declining population base.

48% more new Equalization than new corporate and personal taxes combined.

Keep that in mind as you read Al Hogan gushing over the wonderful budget tomorrow.

It is, in my opinion, a travesty beyond words that they can dole out tax breaks and slash economic development funding in the context that we find ourselves in circa 2006.

It is egregious.

I might have to get out the dictionary to throw in more superlatives.

Rome is burning and the Lord’s Tories just want to make it to another election.

Aw shucks.

Tomorrow I’ll be more upbeat, promise.

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0 Responses to Quick budget assessment

  1. Anonymous says:

    Thanks for that, it saves a lot of research. Lowering the corporate tax though, hey, that’s a big step! Isn’t capitalism supposed to about the market doing more, not government. Looks like some people are cheating.

  2. David Campbell says:

    Corporations don’t pay taxes in New Brunswick. $178 million in 2006/2007 on a budget of $5.8 billion. That’s 3% of revenues. That’s nothing. In Quebec, it’s 8% – 2.5 times New Brunswick. In Ontario it’s 11.4% – almost 4 times New Brunswick.

    Marginal corporate tax cuts is a cynical ploy to make it look like that are making grand gestures when it’s just another smoke and mirrors job.

    They could completely remove all corporate taxation and they would hardly feel it (3% of the budget).

  3. Anonymous says:

    However, the export and manufacturers spokesman came out and said that it was a ‘good news budget’.

    Two conclusions come out of this. First, the poorest New Brunswickers are still worse off than even any other maritime province, including Newfoundland.

    Second, little on the business investment side, and none for the poorest areas of the province. Ever get the feeling that somebody doesn’t WANT any change? Of course there’s more money for ‘health and education’ just to make sure nobody seriously challenges the status quo.

  4. David Campbell says:

    Check out Al Hogan over at the T&T. He is more than gushing over the budget. I will go to my grave believing that dopey, partisan media coverage of government actions has contributed – at least in some fashion – to the economic crisis that has been building and now faces us square on.

    The Telegraph-Journal, on the other hand, takes a different view:

    The Conservatives’ whole philosophy of government seems to have changed overnight – an acknowledgement that the policies they entered office with weren’t working.

    Who’s right? Al Hogan’s slow and steady, prudent governing that will lead us into the promised land or the TJ’s assertion that the 2006-2007 budget is a complete shift in philosphy to curry votes for an upcoming election?

    I report, you decide.

    Tee hee hee.

  5. Anonymous says:

    Yet another tidbit, part of the deal to big forestry giants is halving the tax on capital investments. In other words, the high technology that is used to displace workers. So companies not only get a buyout, but they also get a boost to encourage them to buy more machines-few of which are made in New Brunswick, which will put more New Brunswickers out of work.

    Are these people evil or what?

  6. Anonymous says:

    When was the gas tax increase?

    Whats wrong with getting more money from property taxes? The cities in the south of the province were (are?) experiencing construction growth, which obviously means more property tax. Property taxes, unless I”m mistaken, are the only financial sources for municipalities (apart from user fees and services). So wouldn’t property tax be good news?

    What ‘grinds’ me the most is that unless I”m mistaken the province maintains control over setting property tax rates with its property assessment. I could be mistaken but the provincial bill passed was specific to the LNG terminal which means that a municipality still can’t offer property tax holidays or deals to potential employers.

    That may not be true, but I”m pretty sure it is. Which makes your co-speaker on Maritime Noon incorrect that “what is good for Nova Scotia is good for New Brunswick”. When you can’t even say that what is good for Saint John is good for Campbellton, then clearly the above is rubbish.

    At least with control of property taxes municipalities could have some measure of control over investments. Somebody correct me if I’m wrong on that.