New Brunswick.

• Author: McCleave, John-Patrick
• Position: Legislative Reports

[ILLUSTRATION OMITTED]

The Second Session of the 58th Legislature resumed on February 2, when Finance Minister Roger Melanson delivered the second budget for the Gallant government.

"This budget marks the close of the Strategic Program Review process and will set a foundation that our province can build upon so we can invest in New Brunswick's priorities and create jobs" said Mr. Melanson.

The provincial government estimated a deficit of $347 million for 2016-17. Revenues of $8,719 billion are projected, a 5.1 per cent increase over 2015-16 revised estimates. Excluding the revenue measures in the budget and prior-year adjustments, revenue growth is estimated to be 2.3 per cent. Expenses are expected to grow 3.5 per cent, an increase of $303.8 million. The budget included a multi-year plan to improve the province's bottom line and return to balanced budgets by 2020-21.

Revenue measures from the Strategic Program Review will yield $293 million once fully realized. Specific items included increasing the general corporate income tax rate from 12 to 14 per cent; increasing the provincial portion of the HST by two percentage points with a refundable provincial FIST credit designed to protect low-to-middle income households to return approximately $100 million to New Brunswickers; increasing the tobacco tax and establishing a dedicated enforcement unit to disrupt the trade of contraband tobacco; and allowing the purchase of rights to name government-owned assets such as buildings, parks, and bridges.

The Strategic Program Review will yield $296 million in expenditure reductions including $115 million in 2015-16 and $181 million announced in 2016-17. Expenditure reduction initiatives included rightsizing management and an organizational realignment of the civil service to save $46.4 million; reducing senior and middle managers by 30 per cent; and the Department of Transportation and Infrastructure shifting non-core functions to the private sector.

On February 4, Finance Critic Blaine Higgs delivered the Official Opposition's reply to the Budget. Mr. Higgs spoke in support of the move to an integrated pension services corporation to ensure independent and cost-effective pension administration and investment management. He raised concerns regarding the concept of privatization of services as the answer to improved efficiencies; the unfair taxation program for First Nations; spending initiatives contained in the Main Estimates without real definition...