We’ve knelt around this bonfire before, watching the flames grow higher, hungrier. The kindling is the first to go, then the wild alder branches, and finally the great stumps of driftwood, charred black, vanish in the inferno.
Inevitably, we reach the point of knowing that time is short and we’re running out of fuel. Still, we can’t seem to move. Our feet and hands are stuck in the sand, to be followed, any day now, by our heads.
“Net debt is one of the most important measures of the financial position of the province,” New Brunswick Auditor general Kim MacPherson reminded us, with the patience of a camp counsellor, last week in her annual report. Although she’s led this sing-a-long for months, we still can’t remember the words.
“For the year ended 31 March 2013, net debt increased by $931.8 million to $11.1 billion. Net debt has increased $4.3 billion since 2007. The 2013-2014 Main Estimates budgets for an increase in net debt of $594.4 million for the year ended 31 March 2014. Based on 2013-2014 Main Estimates, net debt of the province could be in excess of $11.6 billion for the year ended 31 March 2014.”
We interrupt her just long enough to toss another log from our dwindling stash onto the fire. Excuse us, Ms. MacPherson, you were saying. . .
“This continued increase in net debt represents a very disturbing trend. An even higher demand will exist on future revenue to pay past expenses. Such continued negative trends impacted the Standard & Poor’s decision to downgrade the province’s bond rating from AA- to A+ in 2012. This rating change will ultimately result in more
expensive borrowing costs. As well, New Brunswick’s increased borrowing may constrain future borrowing capacity and affect future provincial operations and delivery of services. The A+ rating remained unchanged in 2013.”
That does sound serious, Ms. MacPherson. Do go on. . .
“Another way to assess the significance of the size of the province’s net debt is to compare it to the net debt of provinces with similar populations as New Brunswick in absolute amount, per capita and as a percentage of GDP. Comparable provinces include Nova Scotia, Manitoba and Saskatchewan. . .Over the last five years, within this comparable group, New Brunswick has had one of the highest increases in net debt (45 per cent) The rate of Net Debt growth has also increased in the past year (growing by nine per cent).”
You don’t have to be Finance Minister Blaine Higgs to realize that all is not well in the purple violet province, where the annual deficit now looms large at $538.2 million. But, it helps. He may be the only citizen of New Brunswick who isn’t stoking the all-consuming fiscal fire.
“While it is true that our expense reductions have prevented a much larger deficit, we cannot turn a blind eye to the revenue challenge that our province now faces,” he said following Ms. MacPherson’s report to the Legislative Assembly. “No one is immune to the fiscal situation we are facing in this province and we are asking our stakeholders to be prepared to discuss how we can get back to balanced budgets.”
Translation: Hey stakeholders, be prepared for more cuts.
In Higgsian terms, is New Brunswick’s infrastructure “bigger than it needs to be”? Is he correct when he says “we need to work on that”?
Is the solution, effectively, to downsize our infrastructure and with it our appetites and expectations?
Says Mr. Higgs: “When you look at he situation we have in the province with declining enrollment in our schools and the number of schools we have. . .if you look at the number of hospitals we have for a province our size. . .you look at the roads we maintain for a province our size. . .we have to look at serious changes in how we do business and how we can deliver services on a continuous basis in a more effective way. . .How do we give the best education unless we have the critical mass there to do that and do that reasonably?”
Of course, right-sizing the province would be the antithesis of “politics-as-usual”.
Then again, this is the one highly combustible commodity that we, in New Brunswick, should be happy to see finally go up in smoke.