Debt does not become us

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Is New Brunswick officially a black hole?

In cosmology, the phenomenon generally refers to a gravity well that’s so dense, so impenetrable that not even photons escape its event horizon.

Here’s what Canada’s national debt clock says about our particular partner in Confederation: $12.8 billion in arrears to domestic and international creditors, which translates into more than $17,000 for every man, woman and child in New Brunswick. (Add that to your mortgages John and Jane Doe if, that is, you’re lucky enough to have them).

The right-leaning Fraser Institute likes to portray this province as one of Canada’s weaker sisters. I, in turn, like to portray the Fraser Institute as a bunch of fatuous blowhards. But, alas, not this time. This time, they appear to be right on the money, which they keep in their big, fat billfolds.

Still, consider their latest analysis: “The growth in government debt over the past eight years reversed a positive trend from the mid-1990s to late-2000s when Canada’s federal and provincial governments made considerable progress in reducing their debt burdens. After a period of debt reduction, combined federal and provincial debt reached a low of $833.8 billion in 2007/08.

“However, the economic recession in 2008/09, combined with the significant increases in government spending that took place in 2009/10, meant that every government fell into deficit in either 2008/09 or 2009/10. This started Canada’s governments down their current path of persistent deficits and growing debt. The trend has largely persisted since then and will likely continue in 2015/16 through the upcoming round of federal and provincial budgets.

“Total debt in 2015/16 is estimated to be just shy of $1.3 trillion. This growth in combined federal and provincial debt has not been limited to just a few jurisdictions. The federal and every provincial government increased their debt levels between 2007/08 and 2015/16.”

In New Brunswick, for example, the provincial government now pays $685 million a year to service its long-term debt. That’s money that does not go to improve and expand health care, public education, city streets, and cultural venues. It’s a giant’s share of a shrinking pie that does not feed the poor, educate the illiterate, invest in private-sector innovation, bolster entrepreneurial diversity, or keep our universities and colleges vibrant, relevant places where our children might purchase a real sense of hope in this region.

In fact, we’ve all been circling the drain for some time in this province. So have Nova Scotia, Newfoundland and Labrador, and Prince Edward Island. We’ve all been living on borrowed time and money. It’s merely a cold comfort to be reminded that so has the rest of the country.

“Canadian governments (including local governments) collectively spent an estimated $60.8 billion on interest payments in 2014/15,” the Fraser Institute’s analysis concludes. “That works out to 8.1 per cent of their total revenue that year. To put the amount spent on interest payments in perspective, it is more than what is spent on pension benefits through the Canada and Quebec Pension Plans ($50.9 billion), and approximately equal to Canada’s total public spending on primary and secondary education ($62.2 billion, as of 2012/13, the last year for which we have finalized data).”

Ouch, indeed!

Of course, New Brunswick has a way out of this black hole, this gravity well. Embrace, for once, the idea of community. Reject the partisan bickering that keeps good notions on the lonely blueprints of policy wonks.

Recognize that New Brunswick must prepare for a new event horizon, where imagination escapes pessimism at the speed of optimism every time.

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