The Moody’s briefing on New Brunswick (read the brief here and the TJ article here) gave three reasons for the province’s weak near term revenue outlook: the recession, the tax cuts and what they term as risks associated with the Lepreau refurbishment.
I thought the tax cuts probably were mis-timed but just about every expert interviewed in the media (that I saw or heard) said it was a good thing to cut taxes. At least Moody’s calls a spade a spade. As for Point Lepreau, I find that curious. Haven’t the cost overruns been discussed in the press? What is the uncertainty?
I agree with Charles Cirtwell on this:
Charles Cirtwill, executive vice-president of the Atlantic Institute for Market Studies, said the tax cuts could have been handled better by the Liberal government. “It’s interesting that Moody’s went out of its way to mention that the tax cuts will be good for the long-term economy of New Brunswick but the ability to meet debt in the short term is weakened by it,” he said. “We made the point earlier that if the province is cutting income tax, it should take back the two points on the HST because that would have allowed the province to maintain some of its revenue and probably would have avoided this.”