Fiscal surplus, debt reduction comes at poor people’s expense, says activist [video]

New Brunswick’s Minister of Finance says the latest quarterly budget update is evidence of “strong fiscal management” under the Higgs government.

But one anti-poverty activist says gains cited by the province come at a steep price for people struggling with poverty, who survive on the lowest welfare rates in Canada.

“When welfare rates are so low, the poor are carrying the provincial debt,” said Robert MacKay, community co-chair of the NB Common Front of Social Justice. 

He said many welfare recipients get stuck in a cycle of debt with payday lenders, noting ongoing campaigns against predatory lending. 

Finance Minister Ernie Steeves announced the latest figures, including a $200 million surplus, during a virtual news conference on Monday. 

The overall debt has fallen from its peak in 2018-19 at nearly $14 billion to a projected $11.7 billion this fiscal year.

But critics say the kind of austerity policies favored by “fiscal hawk” and former Irving Oil executive Blaine Higgs lead to greater inequality and more people living in poverty. 

The Higgs government has faced criticism for a pattern of higher-than-forecasted surpluses amid the ongoing cost-of-living crisis.  

New Brunswick currently has the lowest welfare rates in the country, according to a recent report from Maytree, a Toronto-based think tank. For example, single persons with disabilities received just $10,884 last year. 

WATCH: NB Common Front interviews Jennefer Laidley, co-author of Welfare in Canada, 2022

As part of reforms to social assistance In recent years, the Higgs government has indexed social assistance to inflation. 

The province has also raised the limit on how much welfare recipients are allowed to earn in wages before those funds are subject to a “clawback” by the province, a change that followed pressure from the Common Front. 

But welfare recipients must scrape by on social assistance payments that fall well below conventional measures of poverty in Canada. 

And this week’s quarterly budget update included no increase to those rates, a decision that MacKay said was “not surprising.”

Social Development Minister Jill Green has acknowledged Maytree’s findings while defending the province’s approach.

She recently told the Telegraph-Journal that the study “doesn’t take into account all the other benefits that are potentially available” to welfare recipients, such as insurance for prescription meds.

Jennefer Laidley, co-author of the Welfare in Canada report, admitted that those factors aren’t taken into account, but “just about every province and territory has the kinds of benefits that the minister is referring to.” And accessing them typically involves a “long and sometimes onerous process.” 

People on welfare account for about 40 per cent of people living in poverty in Canada, she said.

“If we want to effectively reduce or eliminate poverty, we need to deal with the very low incomes that people on social assistance are receiving from those [welfare] programs,” she said. “And in the New Brunswick case, we can see that that need is particularly urgent.”

On Monday, the NB Media Co-op asked Finance Minister Steeves about calls for the fiscal surplus to fund better social assistance rates. 

He said the matter will be discussed in Cabinet, which “will come up with the appropriate spend.” He also cited investments in housing and lower taxes as efforts meant to “help all levels of New Brunswickers.”

But MacKay suggested the provincial government’s approach reflects a callous attitude toward people like himself, who depend on welfare to survive.

“It appears to me that our government’s financial choices clearly indicate a belief that poor human beings in New Brunswick are worth less than all other poor Canadians,” he said. “Maybe the government even thinks they are worthless.”

David Gordon Koch is a journalist with the NB Media Co-op. This reporting has been made possible in part by the Government of Canada, administered by the Canadian Association of Community Television Stations and Users (CACTUS).