MONCTON – New Brunswick’s Finance Minister, Ernie Steeves, told a room of approximately 150 business people Monday that he plans to lower business taxes in a couple of years, as the budget is expected to show larger surpluses.
Steeves was in Moncton to speak about the 2019-2020 budget at a luncheon hosted by the Chamber of Commerce of Greater Moncton. He said he plans on lowering taxes “when it’s fiscally responsible to do so, and I hope that starts in 2021.”
The budget had no new taxes or fees. The government’s strategy, Steeves said, is to create conditions for growth over time by lowering taxes and levies including the WorkSafe NB compensation rates, among other things. The government will take more steps on WorkSafe NB rates in 2020, he said.
“One of the priorities is to energize the private sector in the 2019-2020 budget to help us unlock New Brunswick’s economic potential. A growing economy needs a strong, vibrant, and growing private sector,” he said.
The minority Tory government tabled a $9.8-billion budget March 19, projecting a $23-million surplus for 2019-2020, and a $49-million reduction in the current net debt of $14.1 billion. That would be the first such reduction in 13 years.
Provincial revenues are projected to grow by 1.5 per cent for 2019-20 while spending growth is being limited to 1.3 per cent.
Steeves expects the surplus to grow to $33 million in 2020-2021, $63 million in 2021-2022, and $71 million in 2022-2023.
He says getting the province’s finances in order will “show the rest of the world that New Brunswick is getting its act together. That it’s a good place to invest, it’s a good place to raise a family, to work, to retire.”
The Moncton Chamber of Commerce is supportive of the budget, saying that no new taxes, a balanced budget and lower debt are positives. But CEO John Wishart said he wants to see more of a vision from the government.
“Maybe we’re expecting too much in year one, but [we] kind of want to see a vision, a long-term game plan for how the province needs to be restructured or how public services can be changed in terms of delivery. I didn’t really see as much of a grand vision, but they certainly did what they needed to do in the early going to send the right message,” he said.
Wishart says he also wants more information on certain funding cuts in the budget, especially those affecting Opportunities New Brunswick, the Post-Secondary Education, Training and Labour department and the tourism sector.
“We as a chamber really believe that tourism can be a big economic booster, but perhaps over time, some of those cuts can be offset if the tourism levy comes into play. And regions like this can generate some of their own cash for tourism promotion and event attraction. But that would probably take a year or two,” he said, referring to the province’s proposed amendment to the Local Government Act that would allow municipalities to impose a tourism levy on hotel patrons.
But Steeves said this budget is only the beginning of a larger reform.
“I’m asking you to be patient. Just like any business, maintaining a sustainable balance to our finances is not a one-year task. It requires continued diligence, responsible decision making and sometimes very difficult choices.”
In a scrum with reporters after his speech, Steeves also said the carbon tax regime that took effect April 1 makes New Brunswick less competitive than neighbouring provinces.
“We all believe in climate change. There has to be a solution developed for it, absolutely….but there has to be a reasonable solution where New Brunswickers aren’t punished so much by the federal government,” he said. “We are looking for a plan of our own and just trying to delay it for a little bit till we can find out exactly how to handle it.”
“We would like to see a carbon tax that is [fair]. We would like to see a made-in-New Brunswick carbon tax solution. We’d like to see the federal government rethink the whole thing,” he said.
Wishart said New Brunswick can model its plan based on Nova Scotia, P.E.I., Newfoundland and Quebec’s carbon pricing deal with the federal government. Nova Scotia, for instance, has a cap-and-trade plan in place.
The current carbon tax in New Brunswick would make it more expensive for companies to do business. And costs from energy and fuel expenses would likely get passed on to consumers, he said.
“A lot of that will be passed on and it will probably end up in the grocery store checkout where my oranges are now 5 cents more expensive because the cost to get them here has gone up,” he said. “I’m saying all of this knowing that there needs to be a plan in place and obviously we all need to play our part to mitigate climate change. It’s just, if we’re going to do it, let’s do it so that it’s fair to everybody – business and consumers.”
He’s also open to the idea that the private sector takes the lead on coming up with a plan.
“Instead of waiting for the government to come up with the plan, maybe the private sector does have to take the lead here and say, here’s something we put together, we think this would work. This would do our bit for mitigating climate change and it will still be fair to consumers and business people,” he said.