Victor Boudreau's voodoo-nomics
New Brunswick Telegraph-Journal
Sat 17 Mar 2007
Page:
A11
Section: OPINION
Byline: Lisa Keenan

There are three immediate conclusions one can reasonably
draw after reading through Finance Minister Victor Boudreau's first provincial
budget.

1. Few, if any, members of the Liberal cabinet have ever run a small
business.

2. There is a significant financial problem in the credit union sector.

3. The Finance Minister himself is a fan of astrology and searched the zodiac
for the perfect day to deliver his budget.

Readers will have to determine which of the three causes the most concern.

A quick review through the biographies of the provincial cabinet can be most
enlightening. Although well represented with lawyers, teachers, doctors and
retired civil servants, only Fisheries Minister Rick Doucet and Tourism Minister
Stuart Jamieson can lay claim to having lived the true life of an entrepreneur.
Entrepreneurial experience aside however, in a province in which 90 per cent of
businesses are either small- or medium-sized enterprises (fewer than 50
employees), radically jacking up taxes on the smallest of home-grown firms is
hardly a way of saying that New Brunswick is "open for business."

Budget 2007 managed to accomplish something that most neutral observers would
have deemed impossible for a government that was, mere weeks ago, claiming it
was too poor to honour its election promises to the neediest of New
Brunswickers; it increased spending by almost $400 million (6.5 per cent) over
the budget passed last spring.

However, in the interim, the Liberals also managed to increase spending for
this year by $200 million, borrowing money to put away for spending in future
years. Most of the $200 million went into three funds; $68 million to continue
the Ponzi-like university funding scheme started by the Tories; $26.6 million to
be set aside for Saint John harbour clean-up, which will be spent over several
years; and $60 million for the "stabilization and support" of the province's
credit unions and caisses populaires.

Stabilization funds are the equivalent of deposit insurance for credit unions
and are, ordinarily, funded by the credit unions themselves. Why the working
poor are being taxed so as to support these financial institutions continues to
be the million-dollar question (no pun intended).

Did the Finance Minister visit a physic or have his palm read before choosing
the date for the budget? The answer is unclear, but it seems certain that he
must have had some supernatural assistance to choose the only week when the
Grits could plausibly raise taxes without suffering a political backlash.

With last week's by-election in Moncton East safely behind them, the Liberals
apparently feel secure enough to veer away from the infamous Charter for Change
yet again. Anyone browsing through the 33-page document would be hard-pressed to
find any mention of raising taxes in the Liberal program.

This week, New Brunswickers learned that price, to the tune of more than $100
million in new taxes. However, the window for imposing new taxes is, this year,
a very narrow one. Next Monday, federal Finance Minister Jim Flaherty will bring
in his second budget and any sentence he utters that contains the words "New
Brunswick," "equalization," and a dollar amount will undercut any argument that
Mr. Boudreau has used to justify raising taxes on ordinary New Brunswickers.

Is Minister Boudreau already aware how much New Brunswick's federal payments
will increase in next week's budget?

Probably not formally, but informed speculation says that the only issue will
be whether the province's equalization payments increase by more than, or less
than, $100 million a year. Any way you slice it, the Finance Minister picked a
fortunate week to unleash "Red Tuesday" on an unsuspecting province.

Was the budget a bad one? Probably not. Funding was increased for the three
departments New Brunswickers value most: Health, Education and Family and
Community Services. The new income taxes that all New Brunswickers will be
paying, however, will more than eliminate any savings they might have reaped
from the gasoline tax reduction. And, although not immediately apparent, the
Liberals will soon have a nest egg (courtesy of federal equalization transfers)
to jump start the Premier's "self-sufficiency" project.

Unfortunately, the burden of rising provincial income taxes will fall
heaviest on low-income families, a complete reversal from the bad old days under
the Tories.

In the end, the Finance Minister delivered a stand-pat budget without any (so
far) radical policy shifts. There will be time enough for those later, with a
fiscal update, scheduled to be kick started this forthcoming Monday when the
federal budget is introduced.

Almost from the day they were sworn in, the Grits have been spreading tales
of vast financial shortfalls off in the future, shortfalls which they alone seem
to see.

Most other observers of the province's financial health (the banks, the
Auditor-General, the C.D. Howe Institute) gave the provincial books a favourable,
even commendable, rating. Notwithstanding, the Finance Minister continues to
blow his fiscal dog whistle, playing a tune of future deficits that only
Liberals can hear.

Now, after having delivered a budget that raised taxes unnecessarily, and
failed to recognize tens of millions in revenue coming from Ottawa, the minister
continues to bleat out his mournful tune. Perhaps it's time for a return trip to
the Tarot Shoppe.

Lisa Keenan of Saint John is a lawyer and the former president of the New
Brunswick Progressive Conservative Party. Her column normally appears on Friday,
but was pre-empted this week by the Opposition's response to the budget.

© 2007 Telegraph-Journal (New Brunswick)

Length: 899 words