Category Archives: Government

Mar 24 2016
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Democracy, Government, Politics

The wisdom of the crowd

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When protesters shut down access roads to a Donald Trump rally in Arizona recently, prompting the improbably coiffed billionaire and reality-show host to instruct the interlopers to “go home” to their “mommies”, media broadcasters readily assumed those in his audience stood solidly with him.

I’ll wager, though, the truth was a little more complicated.

If I had conducted a straw poll onsite and at the time, I’m almost certain a third of the participants would have said the protestors should be arrested and tried for public nuisance, another third wouldn’t have cared much, and a final third would have shrugged their shoulders and mumbled something about every person’s right to free speech, even the disagreeable variety.

Politicians (especially candidates for office) and members of what was once classified so quaintly as “The Fourth Estate” expect black and white responses from John and Jane Q. Public on any issue – large or small, consequential or insignificant, even though they almost never get them.

Yet, the mantra is wearingly familiar: You are either for us or against us. You can’t be both. You certainly may not cradle any notion that democracy, in practice, is anything but fractious and polarizing.

It’s the same assumption that the chattering classes in the Atlantic Provinces make about the East Coast hoi polloi right around election and budget times, when the partisan bunting luffs ever so vigorously in the hot air.

Lately, however, in my travels around New Brunswick, a different picture of average members of the body politic emerges – one that’s more nuanced than monolithic. It suggests that most people are willing to entertain often-radical points of agreement to reach consensus on how to solve the persistent problems that afflict regional society.

Surprising are the number of voting citizens who firmly believe, regardless of their party affiliations, that forging much closer economic ties between provinces is a durable way to cut public deficits and debts.

They also think that the amount of government spending is less worrying than the lack of material return on each dollar invested. They are, for example, more likely to concur with the proposition that small-p politics should play no role in allocating (or curtailing) resources to higher education.

In fact, they are broadly convinced that entrepreneurship and innovation are functions of literacy and numeracy (not the other way around); that culture and the arts are engines, not byproducts, of prosperity; and that health care planning lacks only from a paucity of imagination among public officials who refuse to consider delivery models other than those prescribed by the status quo.

Most striking, perhaps, are the definitions people embrace for that long-abused rubric – the favorite of every politician, wearing his or her partisan colours proudly, who ever went to Government – leadership.

The notion that good leadership is “strong” or “unwavering” – that it springs, unbidden, from the souls of the anointed few who assume elected office; that it is impervious to the corrupting influences of circumspection and changing conditions – is, most average folks contend, ludicrous.

Rather, good leadership is about “respect” and “listening”. It’s about “setting an example” for others to emulate. Yes, it’s “decisive” and “consistent”, but it’s neither “rash” nor hidebound.

Few, it seems, are alarmed about peaceful, deliberate protest – except, of course, politicians and other members of the chattering classes who attend them.

Few are prepared to concede the point that holding an opinion precludes changing one’s mind.

These are the principles around which effective governments must finally rally if we have any chance of solving the problems that plague our various societies.

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Mar 23 2016
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Democracy, Economy, Employment, Government

Banking on survival

Resurgo is action in latin. And that's a dead language. Get 'er done boys and girls

A government budget is not that different from a personal one: In either case, we invariably break our promises to ourselves.

We start with the best information and the best possible intention. We tell ourselves that our revenue and income streams are stable; we make spending and savings plans accordingly. We close the books and go along our sunny ways until a computer model or online robot tells us we’re way too optimistic; too stupid to trust our own flawed perceptions of reality.

That’s precisely how the global economic collapse occurred in 2008. To my American cousins, I will provide a recap. (And listen up my fellow Canadians, because this affects you, too).

It all started with the assumption that the housing market in the United States was impervious to ups and downs. After all, weren’t mortgages the safest investment vehicle since God created sliced bread? No bank would make credit default agreements against this industry’s eventual failure. Until, of course, they did. In the end, that made the short sellers – who bet on a housing downturn thanks to utterly irresponsible interest rate spreads between homeowners and mortgage companies – rich, and the rest of the turtles. . .well, poor.

The poorer they, the average turtles, got, the richer they, the short-selling fund-managing sharks, became. Home-induced bankruptcies fuelled the new instruments of financial insurance, which finally decimated almost every major lender in the United States, before the feds swooped in like a batman with a broken wing to save them, with public money, from imminent perdition. In other words, my American cousins were twice. . .um. . .compromised through no particular fault of their own.

Welcome, dear reader, to the way the world works.

Welcome to the meaninglessness of splashy federal budgets.

Prime Minister Justin Trudeau’s latest economic report does little for New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador. How could it?

To compensate for the utter lack of investment in strategic infrastructure – education, health care, roads, innovation and technology programs – by the former government of Stephen Harper, Mr. Trudeau would have had to drop the country into the $100-billion-deficit range, as opposed to the current $30 billion he’s just barely willing to tolerate.

Again, this is not precisely Mr. Trudeau’s fault. Oddly enough, it’s not even Mr. Harper’s. In their own ways, both have had to pretend to run Canada’s budgets in the interests of all Canadians. But the cause of the Great Recession of 2008 – the global financial meltdown of 2007 – is still with us, still perniciously affecting us today.

It reveals itself in the way so many middle-class people in New Brunswick can no longer buy affordable homes, pay for their kids’ university educations, build durable retirement accounts, or acquire sufficient credit to invest in small enterprises.

It continues to keep our revenue-generating private enterprises gun shy. Many no longer hire worthy youngsters to train. Banks no longer readily lend capital. Debt-riddled government guarantees are no longer worth what they used to be.

In the end, we continue to break all the best promises we ever made to ourselves in sunnier days.

Still, none of this is inevitable.

We can remake the world, right here in New Brunswick, without recourse to federal budgetary promises that are, at best, temporary, and, at worst, illusory. We can, in vibrantly unique ways, re-energize the entrepreneurial culture we once exported to the rest of Canada.

We merely need to remind ourselves that the promises we make to ourselves, our children and our grandchildren are the only ones that are worth fulfilling.

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Feb 28 2016
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Economy, Government, Politics

Becoming a debtor’s paradise

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Suddenly, the Great White North, recently famous for its probity and prudence the world over, appears ready to throw itself off a fiscal cliff.

What was forecast to be a small budget deficit in 2016-17 and 2017-18 now looks very likely to balloon to $25 billion in each of those two reporting years. The causes depend, of course, on whom you consult.

The Liberal government of Justin Trudeau blames its predecessors under former Prime Minister Stephen Harper, who, they say, underplayed the effect of falling oil prices even as they systematically told Canadians a far rosier tale of the nation’s basic economic strength than was probably justified.

The Opposition Tories, meanwhile, insist that the incoming Grits simply blew the budget by promising to pay for things they could never hope to afford (and, in the process, scrupulously avoided informing Canadians about the fundamental flaws in their accounting logic).

Indeed, there are a few skeletons in the fiscal closet that neither political party is especially keen to reveal.

For starters, the Conservative government never did have a handle on this whole business of running productive surpluses. It had a notion – and not a great one – that it could fool the country into believing that book entries in ledgers and cutbacks to essential programs, like infrastructure, would generate durable black ink in the public accounts for years to come.

Forget about crumbling roads, highways, bridges, canals, and military materiel. That was always someone else’s problem to solve. (It would have been theirs’, but electoral history spared them the humiliation of admitting to their own three-card-monte version of responsible government).

Secondly, the Harperites saw the writing on the oil sands years before they admitted they might be obliged to adjust their deficit and debt projections. In fact, the claim that no one saw cheap oil and gas prices coming down the pike as far back as 2012 is simply incredible.

At that time, the Americans were already moving aggressively towards oil and gas independence precisely because the Saudis and other OPEC nations were goosing their own production schedules and slashing margins at their state-owned facilities to squeeze western producers between a rock and a shale bed.

As for the nascent Trudeau government, it could never achieve its goal of simultaneously holding the line on deficits and opening the spigot. Anyone who thought it might. . .well. . .I own a bridge in Brooklyn you might be interested in taking off my hands.

In New Brunswick, we might properly wonder why we’re so concerned about our own province’s annual deficit, especially if the feds are so willing to increase the national one.

After all, Ottawa’s yearly shortfall could now increase by a per-capita factor of $1,000 (measured against the country’s population). That’s about 40 per cent less than ours in this East Coast jurisdiction.

But there is a difference, and it’s an important one.

Ottawa enjoys economies of scale that New Brunswick does not. The federal government has 33 million people whose open pockets they can pick. This province, meanwhile, still relies on the legal apparatus of transfers and Equalization from the ‘Centre’ with which to cover its debts.

Now, multiply that by 10 provinces and a territory or two, and you begin to get a sense of why a federal deficit is an entirely different animal than a provincial or territorial one. The former suddenly, if lamentably, becomes necessary.

If we want Ottawa’s books to balance, then we ought to begin in our towns, cities and regions. The fiscal cliffs are, in the end, our own to avoid.

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Feb 24 2016
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Economy, Education, Government

Smart money from slow learners

 

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New Brunswickers should harbor no doubt that Premier Brian Gallant, with the best of intentions, wants to transform the province into an oasis of educational innovation and attainment. But where’s his plan?

Some intrepid reporting by Brunswick News reveals that there isn’t one – or, at least, not much of one. A big chunk of the $261-million ‘smart-province’ initiative has yet to be assigned.

In fact, so little is known about the government’s priorities on this file that a legislative committee convened to review spending plans at the Department of Post-Secondary Education, Training and Labour has been adjourned until more information becomes available.

Predictably, this has aroused the ire of the official Progressive-Conservative opposition. “The education minister (Serge Rousselle) could not answer the simplest questions about the premier’s new education and economy fund,” Tory Leader Bruce Fitch thundered.

For their part, Liberal spokespeople are buttressing the ramparts. Says one Molly Cormier, a mouthpiece for the province’s rather attenuated departments devoted to education (there appear to be many): “Senior officials as well as the minister are meeting with stakeholders in the post-secondary sector. . .The (new education and economy) fund was created to ensure government makes strategic investments into New Brunswick’s priorities of jobs and education.”

Fair enough. But Mr. Fitch and his colleagues across the aisle also make a decent point: If education is so important to the Gallant government – if, indeed, it is the architecture necessary for creating a brand, new, economically productive society in this part of the country – then why doesn’t it know what it’s doing, down to the penny, with $261-million in scarce, publicly raised capital? Why can’t it answer the questions its laudable ambitions have raised?

Some months ago, Premier Gallant told me: “I am a huge proponent of the role that education can play in developing our economy, and, of course, what it does for every individual in giving them opportunities in our province. So I am very happy, despite the fact that we face many challenges both fiscally and economically, that as a government we were able to prioritize education to the extent that we did, increasing the budget by $33 million.”

Still, specificity is the jewel in the crown of democratic leadership.

What value does the Gallant government assign to publicly accessible early childhood education?

How much money is it willing to designate to the training and support of early childhood educators?

As it cuts primary and secondary-level teaching positions, how much material value is it investing in literacy, numeracy and critical thinking to benefit the flower of New Brunswick’s youth?

Should all of this cost $100 million, $200 million, $300 million? Shouldn’t we know that $261 million in a government spending priority is properly appropriated before it’s charged against the taxpayer’s ledger?

Or, if this government doesn’t have a smart-money fund to build an innovative, creative province, then say so. And say it now.

I have heard this sort of tripe from our provincial leaders almost daily and for years: “Fellow citizens, we have nothing to fear but fear itself. We must embrace the better angels of our own nature. . .blah. . .blah”.

I would rather hear honesty, however brutal, from Freddy Beach.

“Fellow New Brunswickers,” Mr. Gallant might say. “I made a mistake. I should have done my homework before I decided that $261 million was sufficient to meet my ambitions for a smart province. I should have figured out what that sum was supposed to do. I didn’t. Now, though, I will.”

Then, perhaps, we’ll have a plan we can trust.

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Feb 19 2016
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Climate, Environment, Government, Society

A fossilized vision of the future

 

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As the planet continues to warm, the battles lines in the debate over the causes continue to retrench and harden.

Where once climate science informed popular understanding about carbon dioxide emissions from human industry, and the effect these have had on average global temperatures over the past century, now this research is being hijacked by two diametrically opposed ideological camps bent on formulating fundamentally irreconcilable solutions to the present crisis.

On the one hand, the rising tide of environmental radicalism argues that the only way to save the world from ecological catastrophe is to abandon every mine and every drill. “Leave the carbon in the ground, where it belongs,” the mantra goes. “We must become clean and renewable; and we must do it now.”

It’s a nice, even necessary, idea. But it fails to recognize the essential truth about global society’s dependence on the stuff: It’s cheap and addictive. Virtually nothing we do or consume is unaffected by oil, gas and coal. Going cold turkey overnight is simply no option.

On the other hand, the burgeoning call for more drilling, more mining posits that fossil fuels are the glue that binds civilizations together. Without them, the argument goes, humanity will simply devolve into brutal clans forever warring over scarce resources; after all, internationalism is predicated on more or less equal access to the same suite of energy resources.

This, too, can be persuasive. Still, the reasoning also conveniently ignores the inconvenient truth of our shared predicament: Science indisputably proves that our time plundering the earth for cheap sources of energy is running out; sooner or later our industrial habits will make much of the planet uninhabitable.

In either scenario, the outcome is disastrously similar: millions will die and millions more will become economic refugees, merely waiting to die.

To avoid the coming zombie apocalypse, there is, of course, a third option: We could start using our minds (which are, I am reliably informed, in great abundance) and stop flapping our gums from the ramparts of our two fortresses of solitude.

If we can’t quit fossil fuels altogether, and we can’t live with them as we do today, then why don’t we stop thinking about them as commodities to burn and begin to appreciate them as strategic assets to deploy in the effort to build a largely clean, broadly renewable future?

In other words, use them as the feedstock for new manufacturing technologies that more effectively capture and distribute in-situ wind, solar and tidal sources of energy. Use them to power research into cleaner forms of short- and long-range transportation systems. Use them to, in effect, eliminate them as anything but the necessary evils they are for advanced research and development.

To some extent, this process is already underway in countries that maintain offshore drilling operations and yet pull as much as a third of their non-locomotive energy from clean, renewable sources.

Lamentably, it’s not underway in any convincing fashion in Atlantic Canada. New Brunswick may possess one of the world’s greatest wind resources, but its infrastructure woefully lags its renewable energy potential. Thanks to its high concentration of universities and advanced institutes, this province could become a living laboratory for this type of urgent research, the results of which might actually spark a durable, sustainable economic development boom with global consequences.

Naturally, this would require the sort of foresight, vision and collaborative determination we rarely witness in this province.

But without this resource available to policy makers, politicians, industry representatives, and environmentalists, our fossilized vision of the future is secure.

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Feb 19 2016
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Business, Economy, Government

Between ‘The Rock’ and a hard place

Newfoundland's debt is as immoveable as a neolithic obelisk

Newfoundland’s debt is as immoveable as a neolithic obelisk

For an object lesson on the capricious nature of economic dependence on fossil fuels, we need not cast our weary eyes westward to Alberta. We need only scan the eastern horizon to where Newfoundland and Labrador hover into pale view.

Not long ago, we may recall, this province was Canada’s miracle child – for decades, a perpetually slow learner that, seemingly overnight, became the highest achiever in the land.

Oil and gas reserves were plentiful (they still are) and commodity prices went through the roof. The province of fish and cut bait was reborn as the proverbial one of milk and honey. Public coffers were full to brimming with billions of bucks. Incomes in St. John’s soared, as did house prices. Road works and other infrastructure projects dotted the craggy landscape.

Then, a funny thing happened on the way to the Big Rock Candy Mountain: The bottom fell out. A reckoning was nigh. In fact, it’s right about now.

According to a recent report by the Fraser Institute, a private think tank based in the West, writing about the newly benighted East, “Newfoundland and Labrador’s provincial finances are in a dire state. The government’s latest projections have the province facing a nearly $2 billion operating deficit, equivalent to almost a third of its total annual revenue. After adjusting for the size of its economy and population, Newfoundland and Labrador will have by the far the largest deficit among the provinces in 2015/16.”

Indeed, says the Institute, “It gets worse. The government currently projects deficits averaging approximately $2 billion from now until 2020/21. Meanwhile, provincial net debt (a measure that adjusts for financial assets) is set to almost triple in nominal terms from the recent low of $7.8 billion in 2011/12 to $22.9 billion in 2020/21.”

What’s the cause? It’s simple: Overspending based on rosy projections about a singularly fickle industry.

Says Fraser’s researchers: “A popular narrative holds that falling revenues are to blame, particularly as the energy sector and consequent government revenues have been hit by depressed commodity prices. And there is no doubt revenues have taken a big hit in recent years, declining by 31 per cent since 2011/2012 and placing considerable pressure on government finances.      “Nevertheless, the view that declining revenues alone are responsible for the province’s fiscal problems ignores the important role that provincial spending growth has played in creating the crisis.

“Government spending in Newfoundland and Labrador took off after 2004/05, coinciding with the commodity boom when energy prices and development began to rise. Subsequently, the provincial government continued to aggressively increase spending as revenues quickly poured into the provincial coffers. In fact, program spending is now almost 80 per cent higher in nominal terms than in 2004/05. From 2005/06 to 2011/12, the government increased program spending by a whopping 8.4 per cent each year on average – much faster than the rate needed to keep pace with increasing overall.”

All of which may only prove that governments, when faced with a windfall of found money, are loath to replenish their “rainy day” funds in favour of spending like sailors on shore leave.

In any case, by comparison, New Brunswick’s rather ill fiscal condition looks almost robust. After all, with a population about the size of Newfoundland and Labrador’s, our $400-million deficit and $13-billion debt seems almost manageable.

Still, it only seems this way. Unless we begin to diversify and innovate, own resource-based, commodity-dependent economy will surely find itself in the circumstances those of our brethren to the northeast now face:

Between a rock and a hard place.

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Feb 12 2016
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Economy, Government, Municipal Affairs

Dear Dad: Send money soon

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Canada’s municipalities want the federal government to avoid the middlemen and send them their allowances directly and without delay.

Given that the middlemen in this instance are the nation’s provincial governments, can you blame the burgermeisters for their impudence?

The country’s tripartite system of democratic rule has been, since Confederation, both a blessing and a curse. Lately, it’s been more of the latter than the former.

Cities – big ones, in particular – have become the indisputable magnets for international and domestic migration. Simply put, these are where most people in Canada now live, work, build businesses, and care for their families; in the process, they exert enormous pressures on physical, technological, social and economic infrastructure. These burdens are now beyond the capacities of many urban areas to shoulder.

At a recent meeting with Prime Minister Justin Trudeau, several mayors made their case.

Said Calgary’s Naheed Nenshi: “Ideally, the funds should flow directly from the federal government to the municipalities. If we have to involve the provinces in another layer of authority, it’s going to slow everything down.”

Added Vancouver’s Mayor Gregor Robertson: “Prime Minister Trudeau is breaking down the silos between cities, provinces, federal government and First Nations. Canada’s cities compete against cities around the world that have more jurisdiction, more tax revenue to work with. And frankly for us to compete economically, our cities need to have more resources and (a) stronger partnership with the federal government.”

Or, as Montreal’s Denis Coderre declared, “Cities are no longer just creatures of the provinces.”

Uh-huh. . .Tell that to the provinces. Here, in New Brunswick, this is exactly what the province’s three major cities are: creatures of provincial jurisdiction.

We love talking about our civic innovation, vibrant cultural amenities, dynamic entrepreneurship and “punching above our weight”. But, let’s face it, we’re still fly-weights in the arena of government funding and, with populations denuding across this province of ours, we’re not likely to land a palpable blow against the status quo anytime soon.

Still, perhaps we can learn from our more muscle-bound brethren across Canada (you know, in case we do have an even chance of someday emerging from our 98-pound-weakling cocoons).

According to a recent survey conducted by the Federation of Canadian Municipalities, “The 2016 (infrastructure poll) included a section on asset management for the first time. These questions shed light on the state of Canadian municipal asset management practices. Survey results point to varied asset management practices according to community size. For instance, 62 per cent of large municipalities, 56 per cent of medium-sized municipalities and 35 per cent of small municipalities reported having a formal asset management plan in place. All communities, particularly smaller municipalities, would benefit from increased asset management capacity.”

Read: More direct control over federal government assets specifically targeted at municipalities; fewer provincial middlemen.

In fact, the prime minister does seem cautiously optimistic about embracing a new paradigm for cities – though, by doing so, he would surely bite off a chunk of constitutional reform that would, by comparison, render a Senate makeover appear like child’s play.

“We are restarting a relationship that had been significantly neglected over the past 10 years,” Mr. Trudeau said at the mayors’ meeting. “Ensuring that we get the money flowing in a responsible and rapid way is a priority for all of us.”

If ‘Dad’ and his cabinet do manage to pull this off, of course, think of all the money that would liberate for the provinces to. . .oh, I don’t know. . .lure multinationals.

After all, middlemen never waste money.

Not ever.

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Feb 12 2016
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Corporate Responsibility, Culture, Government

Mother Nature trumps ‘Mother Canada’

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Rarely do governments come to their senses in time to make an efficacious difference in the lives of the people they represent. But when they do, it’s occasion for commemoration.

So it was last week when agents of the Liberal government of Justin Trudeau announced that a planned war memorial for Cape Breton Highlands National Park – the brainchild of a private consortium that had received fulsome, moral support from the former Conservative government under Stephen Harper – would not proceed.

The so-called ‘Mother Canada’ monument would have been a 24-metre-tall testament to the dogged determination of a Toronto businessman who, having seen the graves of the nation’s war dead in Europe, thought it would be a swell idea to erect a statue in honour of them along one of the prettiest and ecologically significant coastlines in the country.

Writing in the Halifax Chronicle-Herald last year, columnist Ralph Surette fairly foamed at the mouth about the proposal and the evident support it received from the federal government at the time.

“For those who still don’t fully understand the game, the ‘Mother Canada’ controversy should provide some enlightenment,” he wrote. “The discovery that Parks Canada has furnished $100,000 to the project – after swearing that the statue in Cape Breton Highlands Park was a purely private project – blows the lid off the scheme. The political engineering comes from the Prime Minister’s Office.

“This is Stephen Harper building yet another monument to himself. It’s not just the money. The fact that the rules governing national parks have been casually trashed to accommodate the project has the PMO’s fingerprints all over it. No use hollering at Parks Canada bureaucrats. Like everyone else in government, they’ve been reduced to yo-yos of the PMO, detached from their guiding principles.”

Not anymore, it seems. Parks Canada officials, now presumably untethered from their partisan leashes, have correctly adjudged that Canada requires another war memorial of this monstrous sort like it needs a hole in its head. After all, what possible benefit to memory and national pride does a stone giant facing Europe – which can be seen properly only by denizens of international fishing trawlers – actually provide?

For their part, government reps are explaining their decision in more diplomatic and circumspect terms. According to a report in the Globe and Mail this week, “Daniel Watson, the chief executive officer of Parks Canada, said that the agency reviewed the war memorial proposed for the Cape Breton park and concluded there were too many problems preventing its completion by July 1, 2017, the date of its planned unveiling, including the availability of funds to the private foundation backing the project.”

Specifically, Mr. Watson stipulated, “As a result, the project will not be moving forward on Parks Canada land.”

It may, however, move forward in another guise on private land. More’s the pity. Still, that’s not a matter for public policy to settle.

In truth, the most irksome feature about this project was never its grandness or aesthetic effrontery; it was the very notion that land held in trust by the Government of Canada on behalf of the people of Canada – all people of Canada – could be so easily and cavalierly betrothed to private interests who may, or may not, have an ideological bone to pick with our common heritage.

Good Lord! What would be next?

Carving the faces of Canada’s first prime ministers, Mount Rushmore-like, into New Brunswick’s world-famous flowerpot rocks? Erecting the ‘Tomb of the Unknown Corporate Donor’ to boot?

Governments don’t do many things right. But when they do, it’s time to commemorate.

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Feb 07 2016
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Government, Politics

The dummies of small things

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Let’s face it, no government drops a budget without engaging in a substantial amount of tortuous explanation and twisted logic.

The problem, of course, is that elected officials are notoriously poor spin doctors; voters, more often than not, easily penetrate their veils of assurances and, worse, never forget the degree to which political prevarication undermines everyone’s faith in public institutions.

Still, two measures in the New Brunswick government’s most recent budget, announced last week, are precious, to the point of being almost adorable, for their utter lack of perspicacity.

It’s almost as if communications personnel at Freddy Beach downloaded a page from some apocryphal version of “Public Relations for Dummies” and attached it to their media emails.

In the first instance, provincial brain trusts thought they could explain a palpable drop in the personal income-tax rate (to about 20 from 21 per cent) for the highest earners in New Brunswick (those netting $150,000 or more a year) by emphasizing that the feds are planning to raise levies on these putative one-percenters anyway: a kind of glass-half-full-empty sort of argument.

In the second, the Gallant government justified its $400,000-a-year cut to the New Brunswick Arts Board – a move that would effectively render the arms-length organization extinct – by absorbing its staff into the civil service, which would then prosecute the defunct group’s mandate. This is despite the fact that the Province intends to eliminate as many as 1,300 public employees before its reigning Libs head to the polls again.

Uh, huh. . .What, pray tell, is credible about any of this?

If we were, for example, to accept the Gallant government’s contention that fat cats in this province will still wind up paying their fair share in taxes, we must also perceive that a substantial amount of these levies will now travel to Ottawa’s coffers, leaving New Brunswick with an unfunded shortfall (based on original expectations) of close to $10 million a year.

That’s ten million bucks that won’t be available to offset the cost of the HST hike here, which affects pretty much all but the poorest. It’s certainly not going to defray the price of higher education or health care.

It is, purely and simply, a political giveaway to a higher level of government pursuing its own agenda, but which wears the same-colored jersey on the political football pitch.

Again, if we were to accept, in principle, the evisceration of the province’s arts board, what assurances do we have that the new ‘civil service’ to cultural workers will be fair and politically unmotivated. How do we know that it will even survive the next round of budget cuts?

As Akoulina Collins, the Arts Board’s executive director, lamented to the CBC last week, “We were informed that the (government) wished to respect the arm’s length nature of (the organization), yet in the same breath (they) informed us that they would be making contact with our employees to move them over to become employees of the government. . .It’s problematic.”

You bet it is. Political interference is always a danger in arts funding.

To be sure, these two, juvenile adventures in budget butt covering are minor; given New Brunswick’s enormous fiscal challenges, they amount to nothing but chump change.

Still, they are troubling for a government (in fact, all governments in recent years) that fails to appreciate the effect even its littlest decisions have on its ability to govern.

It is, after all, the small thing voters remember.

Remembering that might save the next government from torturing its explanations to justify its logic.

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Feb 05 2016
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Government, Politics

The deficit facts of life

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Balance the budget, certainly; but not just yet. In a nutshell, this was what New Brunswick Finance Minister Roger Melanson told assembled ladies and gentlemen of the press and other observers at Tuesday’s provincial budget announcement.

Still, though it seemed to take almost everyone off guard, the news that annual deficits – despite this year’s combination of tax hikes and spending cuts totaling nearly $600 million – would be facts in our lives until at least 2020-21 was not actually surprising.

In fact, a careful review of the budget measures reveals that some sort of pernicious shortfall was always in the cards.

On the revenue side, yes, the Gallant government raised the Harmonized Sales Tax to 15 per cent, from 13 per cent, effective July 1. And, yes, it also goosed the corporate income tax rate to 14 per cent, from 12 per cent; increased tobacco taxes by three bucks a cigarette; boosted the one-time property transfer tax; and hiked capital tax rates on banks.

On the other hand, the finance department decided against tolling any roads in the province, and even snuck through a modest decrease in the income tax rate the province’s top earners face.

On the spending side, yes, the government announced it was slashing 1,300 civil-service jobs over the next five years; 30 per cent of middle-manager positions were on the chopping block. And, yes, it also terminated the Gagetown ferry; amalgamated its 40 contact centres across the province into four; and froze operating grants to universities.

Again, though, it left both the departments of education and health virtually untouched – at least, in any significant way. Both Mr. Melanson and Health Minister Victor Boudreau recently confirmed that there’s very little appetite among the voting public for dramatic cuts to these, the province’s largest and most expensive program portfolios.

The results, then, are largely predictable: a deficit this year of $347 million; a deficit of $267 million in 2017-18; $167 million in 2018-19; $49 million in 2019-20; and a yet-to-be determined surplus in 2020-21.

Said Mr. Melanson about his “fun-with-figures” exercise over the past few weeks: “The decisions we are announcing today on expenditures and revenues will lead us to a balanced budget and meet our commitment to get our finances in order. This is very important because we currently spend more on serving our debt than we do on post-secondary education.”
Complicating matters, of course, is the economy, which isn’t broadcasting especially cheerful signals these days. “Economic activity is expected to be tempered by demographic realities, private-sector investment, fiscal measures, and the recently announced suspension operations at the Picadilly mine,” Mr. Melanson reported.

Naturally, what frustrates close political watchers in this province is the fact that a $300-million tax-revenue boost haul will have only a modest impact on New Brunswick’s bottom line.

The deficit is now running at approximately $466-million. If the Province’s projections prove to be accurate (and, be honest, when have they ever?), the next-year-over-this-year improvement in the annual shortfall will be somewhere in the neighborhood of $100-$120 million.

That’s not bad, but it’s nothing to write home about. And it’s certainly not likely to quell the concerns of business lobbyists, who think taxes are the devil’s work, and fiscal hawks, who believe New Brunswick can find multiple savings in its health and education systems if its political leaders are willing to close surplus classroom, consolidate hospitals and clinics and take a meat cleaver to the associated labour force.

To be fair, though, who’s going to do that?

Our deficit, it seems, will be with us for a while.

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