MONCTON: The Canadian Union of Public Employees (CUPE) New Brunswick is calling upon the Gallant Government not to repeat the same mistakes as previous governments have done about the deficit.
CUPE President Daniel Légère and CUPE Economist Toby Sanger at the press conference on NB financial situation
“Four years ago, the Alward government started their term in office with alarmist warnings prepared by Don Drummond that the province would soon run deficits of $2 billion a year”, explained Daniel Légère, President of CUPE NB. “This was highly exaggerated based on faulty assumptions. The budget could have been balanced without cuts to programs, largely by reversing regressive tax cuts.”
Last week, Finance Minister Roger Melanson announced that the deficit wouldn’t be as high as planned but is still planning to go ahead with major cuts to public services.
“Once again the New Brunswick government is exaggerating the province’s fiscal problems to impose austerity and spending cuts going along with those who alleged that NB will be “over the cliff” if it didn’t start to cut spending. It’s absurd–but it’s just the type of scaremongering they use to force through cuts to public services and sales of public assets–because they know the public wouldn’t stand for it unless they were spooked.”
“It isn’t just socially and morally wrong to focus on cutting public spending while ten percent of the New Brunswick workers are unemployed, it’s also economically and fiscally damaging,” explained Toby Sanger, CUPE Senior Economist.
“To repeat the same mistakes of their predecessors and continue with these policies is, at best, ignorant or stupid. At worst, it’s a deliberate attempt to keep unemployment high, suppress wages and harm New Brunswick’s economy for the benefit of a select few”, added Sanger.
“Austerity has failed: in New Brunswick and around the world. If Greece and Spain are Europe’s cautionary examples for the absolute failure of deep austerity policies, New Brunswick is the poster child for the failure of austerity policies in Canada”, said Sanger.
“Instead of following CUPE’s advice to responsibly restore revenues, the Alward government cut program spending in its first budget by 1.7%. This led to a sharp slowdown and then decline in the New Brunswick economy–so much so that it had the worst economic record of all provinces from 2010 to 2014. It is also the only province that had significantly higher unemployment rates in 2014 than in 2009 and 2010 during the financial crisis and recession”, explained Sanger.
“Austerity doesn’t work: we’ve seen that time and time again. What do they expect this time? What’s the definition of doing the same thing over and over again and expecting a different result?”
“The province’s structural program review asks the wrong questions when it asks what the province should stop doing. Instead it should ask what other things it can do to benefit the people of New Brunswick in the most effective way, increase revenues and grow the economy”, stated Légère.
The province could eliminate its deficit if it restored corporate tax rates, closed loopholes and increased taxes on top incomes. In total, a few of these measures could generate an extra $400 million annually, which would be more than enough to eliminate the deficit and run a surplus–or to have additional funding to invest in public services.
New Brunswick’s revenues as a share of the economy are close to the lowest they’ve been for a quarter century. If they were increased by just 1.5 percentage points to what their 25-year average had been, the province’s revenues would be $500 million higher–once again more than enough to eliminate its deficit and to invest in additional public services.
“The province should focus on growing the economy, improving wages, jobs, incomes and public services for New Brunswickers, and not on cutting public services to eliminate the deficit”, concluded Légère.