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What does balanced approach mean?

• reducing taxes to increase economic growth and job creation
• sharpening our competitive edge in taxation
• making sustainable investments in health care and education
• renewing our compassion for those most in need

How will New Brunswickers benefit from balanced results?

• a record $1.683 billion investment in health care
• a record $1.039 billion investment in education
• personal income tax reductions totalling $34 million
• corporate income tax reductions totalling $14.3 million
• second consecutive budgetary surplus of $34.8 million
• projected two-year reduction in net debt of $67.9 million
• a new fiscal stabilization fund of $100 million to ensure New Brunswick has the fiscal capacity to invest in the future

Striking the right balance

“With our first budget, this government struck a balance between key public priorities and the means with which to fund them… It is a balance we must continue to strike.”

Balanced Approach

• provincial expenditures and revenues well managed in 2000, resulting in a projected surplus of $33.1 million for 2000-01
• a budgetary surplus of $34.8 million projected for 2001-02

Balanced Results

• the establishment of a $100 million fiscal stabilization fund
• gross capital budget of $197.2 million for 2001-02
• $25.3 million under Strategic Assistance Program
• $2 million over four years for the modernization and consolidation of New Brunswick Acts
• new funding for New Brunswick’s participation in the Canada/New Brunswick Framework Agreement on Agricultural Risk Management

Continuing our economic growth

“New Brunswick benefited from a strong economy last year… As we look ahead to 2001, we are cautiously optimistic for continued positive economic growth.”

Balanced Approach

• economic growth in 2000 stronger than forecast
• real GDP growth for 2001 projected to be 2.1 per cent
• continue to build a more competitive environment in our province
• continue to be prudent in how we manage our economic and financial affairs

Balanced Results

• unemployment rate reduced to 10 per cent
• a record 334,400 New Brunswickers were employed in 2000
• increases in New Brunswick manufacturing shipments, exports, housing starts, and restaurant receipts surpassed national rates
• manufacturing shipments and exports increased over 20 per cent
• housing starts reached their highest level since 1994
• growth in the job market was strongest in full-time jobs which account for 85 per cent of employment gains

Building new job opportunities

“Building new job opportunities is at the core of this government’s economic growth agenda. And lowering taxes for people and businesses is at the heart of our priority to build those new job opportunities.”

Balanced Approach

• reduced taxes result in increased spending, promoting economic activity and that means new jobs
• balance between the traditional economy and the new economy
• have set ourselves the goal of achieving the lowest personal income tax burden in Atlantic Canada

Balanced Results

• $30 million Total Development Fund, over the next three years, to help revitalize our resource-based industries in agriculture, fisheries and aquaculture, forestry, mining and tourism
• strategic investments in critical industry clusters
• growing larger economic base ensuring that our investments in key public priorities such as health care and education can be sustained at reasonable tax levels over the long term

Specific tax reductions and changes

“Last year, this government delivered considerable tax reductions to individual New Brunswickers and to businesses.”

• reduced small business corporate income tax rate from 6 to 4.5 per cent, putting $6 million back into the hands of small business owners in the province
• reduced personal income taxes by 5 per cent, saving taxpayers $54 million for the 2001-02 fiscal year

“What we must do is strike the right balance between the need for taxes to fund key services and tax cuts to foster jobs and growth.”

Balanced Approach

• we must balance the need for more revenue with the need for a growing economy
• creation of a “made-in-New Brunswick” taxation system by moving to a tax on taxable income system
• competitive and compassionate tax reductions and changes

Balanced Results

• second phase of provincial income tax reductions will put some $34 million back into the hands of New Brunswickers in fiscal 2001-02
• low-income tax reduction: all taxpayers with income less than $10,000 and families earning less than $16,000 will no longer pay provincial personal income tax; 15,000 will be removed from the provincial tax rolls
• non-refundable amounts for calculation of provincial credits are being increased to equal the federal amounts
• disability tax credit amounts will increase from $4,293 to $6,000; the caregiver and infirm dependent tax credit amount will go from $2,386 to $3,500
• education tax credit amounts will double from $200 to $400 per month (full-time students) and $60 to $120 per month (part-time students)
• indexation of personal non-refundable credit amounts and tax brackets to the federally indexed amounts
• replacement of high income surtax with a new tax bracket at $100,000 and a rate of 17.84 per cent
• combined personal income tax savings of last year’s budget and this budget are estimated at $88 million in fiscal 2001-02
• continue to provide $100 annually to approximately 32,000 low-income seniors and the New Brunswick Child Tax Benefit and the Working Income Supplement to some 40,000 families
• small business corporate income tax rate reduced from 4.5 to 4 per cent and threshold increased from $200,000 to $300,000 of active business income for a total benefit of $5.3 million to small businesses in 2001-02
• general corporate income tax rate reduced from 17 to 16 per cent; worth $9 million; this is the first reduction in the general rate in 20 years
• Film Tax Credit is being extended
• implementation of a mineral exploration tax credit

Sustaining our health care system

“Sustaining our health care system continues to be a top priority of New Brunswickers and of this government. In 2000-01, this government will spend a record $1.6 billion in health care. The government remains committed to ensuring stable and sustainable health care funding well into the future.”

Balanced Approach

• government must ensure that we are balancing today’s health care needs with tomorrow’s health care needs and that we have the funds available to pay for both
• set up an accountability framework with the Region Hospital Corporations
• Province has begun operational reviews to identify further savings

Balanced Results

• $1.683 billion for health care, an increase of 5.1 per cent over revised spending estimates for 2000-01
• a $27.1 million increase in funding for Hospital Services
• an increase of $21.8 million for long-term care
• a further $11.4 million in the Prescription Drug Program
• a $3.5 million increase for Ambulance Services
• capital investments for health include $6.9 million in capital improvements and renovations to hospitals and $2.5 million for capital equipment in hospitals
• region hospital corporations are realizing direct savings as a result of better borrowing rates and as a result of their own strategies to manage spending

Investing in education and children

“This government is committed to investing more in education and in children. This government is also committed to empowering parents and communities by giving them a voice in the decision-making process concerning education… As a government and as parents, there is no better tool we can give our children for empowerment and success for the future than a quality education.”

Balanced Approach

• record investments in education over the past year and a half
• continuation of last year’s initiatives such as Healthy Minds school nutritional program
• in 2001-02, expenditures for K to 12, grants to universities, funding for community colleges, as well as capital investments in educational facilities will total $1.039 billion

Balanced Results

• invest a further $1.1 million to reduce maximum Grade 3 class size from 32 to 30
• hire another 50 teaching assistants
• invest $7 million over three years to provide access to high-speed Internet bandwidth in all schools
• invest $3.1 million as the second year of the three-year increase in university funding
• invest $300,000 in e-learning Spanish courses for high school students
• invest $34 million in capital funds for schools, including $25 million for the ongoing Healthy Schools program
• $2 million for repairs and renovations to community colleges
• $7.3 million for early childhood development
• invest $1 million to hire 20 social workers for child protection

Managing smarter

“There is perhaps no issue that challenges government more to make the right choices and to manage smarter than delivering a fair compensation package to our employees. This government firmly believes in treating its employees fairly.”

Balanced Approach

• internal equity
• external market competitiveness
• affordability
• comprehensiveness

Balanced Results

• Voluntary Early Retirement Window (VERW) offered last year; to be taken by 1,335 civil servants over two years
• departments are developing plans to manage changing human resources needs and to ensure smooth transitions once the VERW is fully implemented
• new opportunities for civil servants currently working in the system
• eNB Co-ordination Office will mobilize government’s eNB efforts and support the Premier’s Roundtable on eNB and Innovation
• creation of Red Tape Reduction Office
• eNB will be a comprehensive approach to take full advantage of the knowledge-based economy
• Roundtable on Local Governance under way
• Unconditional Grant amount for 2001-02 will be $67 million