Study suggests N.B. government not doing enough to reduce debt
Published Tuesday, May 20, 2014 9:39PM ADT
Last Updated Wednesday, May 21, 2014 12:17PM ADT
With a provincial election looming and the New Brunswick legislature about to adjourn, Premier David Alward is in the hot seat over his party’s spending habits.
The Atlantic Institute for Market Studies says that while New Brunswick has taken steps to curb spending, it still needs to tackle its massive and ballooning debt.
A new study from the institute suggests the government isn’t working hard enough to reduce the deficit and trim what will soon be more than $12 billion in debt.
The study’s co-author, David Murrell, says with Ontario and Quebec now receiving equalization payments from Ontario, reducing debt in a small province like New Brunswick is critical.
“So now they’re receiving a lot more than the entire Maritimes are and why is that? In my opinion is they’re becoming more de-industrialized and their per capita incomes are starting to fall and it’s just like having two big guys come to the dinner table and want most of the food,” says Murrell, an economics professor at the University of New Brunswick.
The Liberals say, while the Tories have reduced spending through sweeping service cuts, the government has failed to boost revenues.
“The fundamental issue here is that they didn’t have a plan to grow the economy, to increase tax base and then, fundamentally, increase revenues to balance the books,” says Liberal MLA Roger Melanson.
The Liberals questioned the Tories on their spending habits and the province’s mounting debt in the legislature on Tuesday, but the government says it tackling the debt as best as it can.
“Pension reform that results in a reduction of 47 per cent in our pensions Mr. Speaker, that’s real money where your mouth is,” said New Brunswick Finance Minister Blaine Higgs in the legislature on Tuesday.
Authors of the study say, despite some risks, resource development and pipeline construction may be the only way out for the province, regardless of which party is in power.
With files from CTV Atlantic's Andy Campbell