Can we fix the revenue generation problem?

“We will find efficiences and cut waste”

During election campaigns, political parties make various promises to the electorate. They seldom tell us where the money to fund the programs will come from, and, to be fair, when economies are growing quickly and tax revenue is flowing in, money might very well be available. These days, however, regional economies are not so robust and new dollars to fund new promises are hard to come by. Federal and provincial tax cuts in recent years have further reduced available revenue. Consequently, the new mantra is to make the promises and then state that funding will come from ‘finding efficiencies’ or cutting ‘waste’. It is rare for politicians to admit that certain taxes might have to be raised in order to fund their campaign promises.

Canadians expect to receive similar services from governments, regardless of which province they live in. Provincial governments have to find the revenue to meet those voter expectations. There is not much point in claiming we can eliminate a large number of those services and thus make large expenditure cuts – if you feel that way, you might find it more productive to go bark at the moon. As I showed in a previous post, when we adjust spending for inflation, non-healthcare government spending in New Brunswick has been fairly flat since the early 90s. Since then, the major contributor to rising spending has been growth in health care costs. That does not mean that new non-health programs have not been launched – it just means that they have been funded either by taking money from other programs or via debt financing. So it comes as no surprise that when Messrs Alward and Higgs promise to make spending cuts but not service cuts, they have a hard time doing so. Most of the ‘efficiencies’ have already been found over the past decade. That does not mean more can’t be found, but it can become increasingly difficult to do so.

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Text of the Penobsquis report and comments

Recently, the Mining Commissioner of the Province of New Brunswick released his report on the complaint by residents of the Penobsquis area regarding damage to their property they claimed was the result of mining activities by the Potash Corporation of Saskatchewan.

As is detailed below, the Commissioner’s report deals mainly with a land subsidence claim put forward by some residents. Water damage claims were withdrawn – some reasons for that withdrawal are given here. The whole story is quite an indictment of the Province’s apparent complete lack of regard for the concerns of its citizens. In short, the Province has failed to show that it ‘has the people’s back’. That, in fact, is the most alarming aspect of this decades-old story. I am not in a position to evaluate the damage claims made by Penobsquis residents, but the’ hands-off’, ‘let the lawyers decide’ attitude of successive Provincial governments is chilling.

The text of the Commissioner’s report is below. This text was formatted for this website from a PDF version of the report. Some errors may have been introduced during this formatting – for those, I apologize (please send me an email if you find errors that mislead).

I am not a mining expert and cannot comment on the technical issues here. But I will make the following comments:

1. The Mining Commissioner appears to be a lawyer and there is no evidence that he has sufficient technical backgound to judge the merits of the evidence before him. Given the powers of the Commissioner, it seems to me that it would be preferable (and more fair) if the Commissioner had considerable technical backgound in the issues at hand, but had access to legal advice where needed. Here we have the opposite – in fact, it is worse than the opposite as there is no evidence that the Commissioner had access to any independent technical advice.

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New Brunswick and Nova Scotia doing poorly in comparison to other provinces – update

Provincial job creation comparisons: Is Quebec the new ‘boom’ province? January 2012 – January 2013 shows Quebec with the largest % gain year-over-year when compared to NB, NS, ON and AB. New Brunswick and Nova Scotia both had significant job losses year-over-year for January. See details here.

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