Minister Forecasting Big Budget Cuts

21 décembre 2018 – Times & Transcript Minister forecasting big budget cuts Ernie Steeves says he’ll make tough decisions to balance the books JOHN CHILIBECK LEGISLATURE BUREAU Ernie Steeves PHOTO: JOHN CHILIBECK/LEGISLATURE BUREAU New Brunswick is considering cuts to the biggest government departments to help balance the budget and avoid higher debt costs, says the province’s finance minister. Ernie Steeves will deliver the Progressive Conservative government’s first budget March 19 when the legislature reconvenes. He said in an interview with the Telegraph-Journal he wasn’t worried about losing popularity over a lean budget, just like he wasn’t concerned when he delivered a capital budget earlier this month that slashed spending for big public works by almost one-third, or $265 million. “The Liberals didn’t want to make those hard choices, so they’ve left them to me to do that. And I’ll make them,” said the former radio broadcaster and small business owner from Moncton.“I might lose my popularity, but am I going to worry about it? No.” But Liberal finance critic Roger Melanson said his previous government had indeed made difficult decisions, including raising taxes like the HST to help avoid deep cuts to health and education. 21 décembre 2018 – Times & Transcript “We were always able to not only meet our fiscal targets, but surpass them,” said the former finance minister and treasury board president. “Ernie Steeves needs to go back to the four years when Blaine Higgs was finance minister and there were cuts, cuts and continuous cuts to the budget without meeting financial targets and having an economy that shrunk.” Before becoming premier, Blaine Higgs served as finance minister in David Al- ward’s government between 2010 and 2014, during a period of high deficits. Steeves said this time, Higgs had told him to balance the budget no later than 2020 and stave off private agencies from downgrading New Brunswick’s credit rating, a move that would cause the province to pay much higher interest on its $14.2-billion debt. Annual interest payments are already north of $700 million. New Brunswick has been in the red for the better part of a decade. The previous Liberal administration managed to balance the books once during its four years in office, but returned to deficit spending. “I’ve guaranteed I will balance the budget by 2020,but if I can do it this time, I’ll do it,” Steeves said. Some observers, such as Melanson and political scientist Roger Ouellette, say the task has been made easier because Ottawa recently announced it would increase health, social services and equalization payments to New Brunswick by $185 million next year, a more than six per cent jump. “If you saw the capital budget, the will was certainly there,” said Ouellette, a Université de Moncton professor.“And it’s a minority government, with the People’s Alliance guaranteeing support for only the next two years. So they have to act now on the next two budgets.” But Steeves said the increased equalization payments was an oversimplification, given inflationary pressures. He said with the rising costs of goods and services, the $9.75-billion budget for 2018-19 would make it closer to $9.85 billion by next spring. So to get the province back in the black -- its latest deficit projection is $131 million -- cuts will have to take place. 21 décembre 2018 – Times & Transcript The minister said it was obvious where most of the savings would be. “You’re not going to whittle much out of a department like Agriculture, Aquaculture and Fisheries because their budget is already so small,” Steeves said. “So when you talk about cuts or efficiencies, they are going to come from the big ones.” Those departments, he said, include health, education and early childhood development, social development, and transportation and infrastructure. “They’re all super important departments. Social Development, for instance, is the reason government was formed for. I won’t go preaching to you, but we all know government is meant to help people who can’t help themselves. So it’s awfully hard to find savings there, but there have to be.” Cuts to those areas are sure to anger plenty of people. Melanson said education needs to be accessible and quality of care for seniors protected. “This budget is going to mean austerity and job losses,” he predicted. Ouellette said he expected to see management positions left vacant in the public service when people quit or retire, a pledge made by Higgs during the election that as many as 600 positions could be eliminated through attrition. One economist argued the most obvious place for cuts would be in schools and universities, given that enrolment had dropped so dramatically in recent decades. “I’ve been saying they should cut there for years,given the demographic trends,” said David Murrell, an honorary research professor in economics at the University of New Brunswick. “It’s harder to cut in health because of our rapidly aging population.” .

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