2008-09 budget supports transformational change in New Brunswick (08/03/18)
March 18, 2008
FREDERICTON (CNB) - Finance Minister Victor Boudreau delivered a balanced budget, with no tax increases, today at the Legislative Assembly in Fredericton.
The 2008-09 budget, which shows a modest surplus of $19 million, provides an increase of $113.3 million in health-care spending; an increase of $63.5 million in K-12 education; an additional $12 million in financial assistance to universities, which will result in a tuition freeze in the coming academic year for the four publicly-funded universities; funding to hire 43 new social workers; an increase of 3.4 per cent for the Department of Social Development; and details about a process for significant tax reform. These investments will build on important investments already undertaken by the government.
"Achieving self-sufficiency requires fundamental change, and it includes taking bold action," Boudreau said. "Today's budget illustrates our commitment to providing the necessary leadership to implement transformative change. It lays the groundwork to grow the economy and create more wealth for our people, deliver more efficient, effective and affordable public services, and provide better lives for all New Brunswickers."
Transforming New Brunswick
The 2008-09 budget includes a number of measures that will begin transforming the province, the government and its relationships, the workforce and the economy.
Today's budget includes:
A Competitive Tax System for a Self-Sufficient New Brunswick
Boudreau also unveiled a plan on the future of the overall taxation system in New Brunswick.
In April, the government will table a green paper that will outline options to significantly reform the tax system, with the purpose of better facilitating wealth generation by all New Brunswickers, and making the province more attractive to investment and high-paying jobs.
The focus of this paper will be the entire tax system: personal income tax, corporate income tax, property taxes for individuals and businesses, consumption taxes, and fuel taxes.
"The New Brunswick tax system raises revenues to pay for the services the province delivers, such as health care, education, social programs, and highways," Boudreau said. "The tax system plays an important role in supporting economic growth and wealth creation. It must be equitable to all New Brunswickers, and it must place New Brunswick in a favourable position with respect to competing jurisdictions. One of the pillars supporting our self-sufficiency objective is transformation of the tax system. New Brunswick's overall tax burden is competitive, but significant reforms will be required to support self-sufficiency."
A select committee of the Legislature will be appointed to conduct consultations with stakeholders over the summer. This committee will report back in the fall with recommendations for government to consider and act upon.
Boudreau provided an economic and fiscal update for 2007 and 2008. He said that the Department of Finance is projecting a modest surplus of $19 million in 2008-09.
The current slowdown in the U.S. economy - the main export market for New Brunswick - will have implications throughout Canada in 2008, including here in New Brunswick. Combined with the impact of the high Canadian dollar, this will serve to constrain economic growth. Overall, New Brunswick's economic growth in 2008 is anticipated to be moderate, but remain healthy, supported primarily by capital investment and strong world demand for mineral products. The Department of Finance is forecasting real gross domestic product (GDP) growth of 1.8 per cent for 2008.
Construction of the liquified natural gas terminal in Saint John and refurbishment of the Point Lepreau nuclear power plant are major investment projects in 2008. The record level of spending in the 2008-09 capital budget will also provide economic stimulus throughout the province. As well, the $1.7-billion expansion of the potash mine near Sussex, and the recently announced wind-farm projects, can be expected to strengthen business investment.
For 2007-08, the Department of Finance is projecting a surplus of $18 million.
The Fiscal Responsibility and Balanced Budget Act provides for a balanced budget over the 2007-08 to 2010-11 periods, and a reduction in the net debt-to-GDP ratio from the previous fiscal period. With today's budget, government is anticipating a cumulative surplus for balanced budget purposes of $37 million for the first two years of the current four-year fiscal period, and a reduction in the net debt-to-GDP ratio from 26.1 per cent at the end of 2006-07 to 25.6 per cent in 2008-09.
MEDIA CONTACT: Vicky Deschênes, communications, Finance, 506-453-2451.