I am now under the belief that the New Brunswick provincial budget is in a structural deficit and we will not be able to grow or trim spending to get out of it. We will either need sizable new growth or new sources of tax revenue or big cuts or a combination of all three.
New Brunswick’s share of the Equalization pie has dropped from 12 percent to 9 percent since 2006 and our share of total federal transfer payments from the federal government has dropped from 4.9 percent to 4 percent. That may not seem like a lot but if we still got 4.9 percent, it would have added roughly $560 million to our revenue which, incidentally, is just about our provincial budget deficit. Of course, Ontario needs it more than we do these days I guess.
Anyway, we can’t expect the feds to bail us out – nor the Boomers.
Note the following chart. Forgive the clunkiness of it but I’m not much of a graphic designer. The number of taxpayers under the age of 44 in the province is declining and the number of folks over the age of 55 is rising sharply and after the age of 65, the average taxpayer pays 45 percent less in income taxes than someone aged 45-54. So just when we need the bucks to beef up public health care the Feds and the Boomers are running for the Exit.
So what do we do? You tell me. We really need to rebalance the taxpayer matrix – we need more young ‘uns to balance the old fogies (of which I am heading in said direction myself).
Maybe we need to convince the feds to carve off a little more revenue from Saskatchewan, BC and Alberta shale gas proceeds to pay for our health care? Old Bernie Lord threatened to take the Feds to court to uphold his Constitutional Right to more Equalization. Maybe we will have to beg or sue our way to more revenue.
I prefer economic growth but I’m not sure how may agree with me on this.
Based on total income taxes paid (fed and prov).