New Brunswickers have recently heard alarming warnings about their province’s finances.
Last November, Finance Minister Blaine Higgs warned the province was spending considerably more on public services that it can afford and its financial situation was “unprecedented”. Also in November, former Toronto Dominion Bank chief economist Don Drummond warned the province could be heading for a $2 billion deficit within five years. Early this month the province’s Auditor General reported that the province’s financial position was unsustainable and had worsened.
All of this may have been predictable when the previous government embarked on deep cuts to corporate and personal income taxes in the midst of the recession as the deficit doubled. But is the fiscal sky really falling over New Brunswick? Is there no alternative but to cut public services and sell off the province’s assets to save it from fiscal Armageddon?
Read rest of the article by Toby Sanger, a senior economist with the Canadian Union of Public Employees.