What’s new? The Feds are awash in cash. According to the G&M this a.m., Ottawa is running a $6.7-billion budget surplus five months into the fiscal year, $2-billion ahead of where it stood one year ago.
The Globe believes this “poses a political dilemma for Ottawa.”
Here are the options for spending this surplus (a few) and the potential impact in New Brunswick:
1. Pay down debt. National implication: Girds the national finances, lowers debt rating, etc. New Brunswick implication: It’s a bit like speeding up your mortgage payments while your house is crumbling from the lack of maintenance. Not a wise move.
2. Reduce taxes. New Brunswick implication: At the risk of being labeled a ‘beer and popcorn’ guy, this is akin to spending more at Walmart when you should be investing in your RRSPs. If you could strategically invest $70 million more in economic development or give every family in New Brunswick a $10 tax break per month, which would you do? I’d spend the $10 on double lattes while I would hope the government would spend it on infrastructure, supporting targeted industry growth and investing in workforce attraction and development. Lattes (popcorn) or targeted investment in economic development? I report. You decide.
3. Fix the fiscal imbalance (translation: give Quebec $3 billion more and whatever left over to the other have nots). Politically, this may be the best vote getting approach (although a good tip would be to also give Daulton a few billion – he could cause trouble) but if the NB Libs spend the increased Equalization like the former NB Tories did – it will have absolutely no effect on economic development and will end up with us requiring even more Equalization down the road. If the NB Libs plow any new dough into growth-oriented investments, then I’m up for that.
4. Partner with the have-nots on province-specific, long term economic development models. This would beat Iggy to the punch and make the Tories the party of regional development. They would need to at least restore regional development funding to Mulroney levels (indexed for inflation) which would require a serious investment.
Now, given that Mike Harris – oops Jim Flaherty – is the Finance Minister and Stephen -I’m-going-to-impose-economic-development-on-you Harper is Prime Minister, which option do you think they will take?