Friday, March 16, 2007

Budget retrospective, part deux

I missed Jeannot Volpé's speech in response to the budget yesterday but the Tory criticism seems to largely focus how it "destroys" the legacy of the Bernard Lord government by undoing their tax cuts. I hate to agree in part to this statement, but as I said in my first budget post, the small business tax cuts were the only legitimate legacy Lord left New Brunswick and it is gone. However, especially having re-did the math, I don't think it is that bad on the personal income tax side or on the big corporate tax side. The problem rests with the small business tax hike which I strong oppose.

Anyway, moving into by budget retrospective, today I will cover departmental spending changes and capital/infrastructure spending.

Departments with spending going up

Agriculture & Aquaculture (+10%)
> Increase almost all in Agriculture programs
Energy (+47%)
> Increases across the board
Efficiency NB (+67%)
> Administrative costs do not increase, but program funding raises by 78%
Fisheries (+34%)
> Increase across the board
Intergovernmental Affairs (+13%)
> Administrative costs cut by 14% and Trade by 15%, but North American relations budget increased by 48%
Premier (+40%)
> According to the Liberals in the press, it is because some of Lord's staff's salaries were paid by other departments but all are paid by the Premier's Office for transparency. The Tories do not deny this, but say that that accounts for only half of the increase of $500,000. I wonder if the remainer may be Claudette Bradshaw's task force which is called a "premier's task force" and, unlike the Self-Sufficiency Task Force, isn't listed as a budget item under general government.

Departments with spending more or less the same

Attorney General (+1%)
Education (+6%)
Environment (-2%)
Executive Council (+2%)
Family & Community Services (+8%)
Finance (+3%)
Health (+7%)
Human Resources (virtually no change)
Justice & Consumer Affairs (+5%)
Local Government (+2%)
Natural Resources (+2%)
Post-secondary Education, Training & Labour (+4%)
Public Safety (+4%)
Supply & Services (+3%)
Tourism & Parks (+2%)
Transportation (+4%)
Wellness, Culture & Sport (virtually no change)

Departments with spending going down

Business New Brunswick (-23%)
> Decrease is all in "Business & Industry Development", which is slashed by 45%, while the adminstration of the department and monies for the population growth/immigration secretariat go up.
"General Government"(-13%)
> Cutting of the Advisory Council on Seniors ($216,000), decreasing the Public Service Internship Program by 38%, cutting Communications New Brunswick by 5%, no one-time expenditures for Harbour Clean-up and Credit Union stabalization,
Legislative Assembly (-24%)
> MLA committe stipends drop by over 7%, less cost for Elections' agencies because non-election year,
Regional Development (-21%)
> Cuts in actual departmental spending are only 1% and it is all focused on adminstration, the rest of the decrease is due to less capital and special spending this year due to the completion of projects.

So we see some unusually high jumps in a number of departments and some unusually high drops in a number of departments. Some are explained away rather easily. Energy is the top priority for the government and that explains the increases for the Energy Department, the Efficiency Agency and perhaps in part the hike for North American relations.

All New Brunswickers who whine about the salaries of MLAs should see they are taking part of the hit by having their committee "top up" payments cut by 7%.

Agriculture and Fisheries increases are inline with the Liberals longtime complaint that services for New Brunswickers in these areas declined improperly when the Tories merged the two departments.

I think that the Premier's Office increase is relatively fairly explained but I will be curious to see where the specific money is being spent when we see main estimates.

The problem comes up in the other priority of the government: job creation. Businss New Brunswick takes a big hit - the biggest in real cuts - of any department. Why? Regional Development, despite appearences, is not really cut but the BNB cuts on their own are unusual. Throw in the cuts to the Trade arm of Intergovernmental Affairs and one is left to wonder what the approach is and how it syncs with "making job creation a priority again".


Eugene said...

What's your problem with the BNB cuts? Any fool can take $30 million and create enough economic activity to generate $1.4 billion in government revenues. Self-sufficiency, here we come!

Anonymous said...

And why do you 'comment' on tax increases, yet those who complain about MLA's salaries are 'whining'.

Not all MLA's sit on committee's, and 7% isn't that much of a cut, particularly since some of it is tax free.

Once again, New Brunswick spends twice on salaries to MLA's than Maine does, and they also have twice as many representatives. Perhaps if there were fewer 'professional politicians' and more regular folks then some of the decisions they make would benefit regular folks.

nbpolitico said...

Anon - New Brunswick MLAs are some of the worst paid in the country and all politicians are under paid.

People like to scream about politicians but it is a hard job with no security. You have to work virtually 24/7 and people call you at home at midnight if their neighbours are being too loud and on Sunday afternoon if their driveway is flooded.

They work as hard as any top business executive but receive very little comparative pay and have NO job security.

I remember a long time MLA once putting it to me this way: "I work 80+ hours a week, 52 weeks a year to try to make life better for these people and my thanks is to have to go door-to-door and beg them not to fire me every four years."

I think politicians are way under paid. However, I think it is a nice thing to see that if they are making cuts elsewhere, they are taking some cut too.

Spinks said...

I'm with you on this one NBPolitico. MLA's in NB are underpaid. They know that going in and that's fine but it is hard work. Long hours and you have clowns like us criticizing all the time on top of that. :) I never begrudge an MLA his/her salary.

However, I'm still having a tough time swallowing the tax increase though especially when a the majority of $60 million dollars for credit unions (why's the province involved in that anyway?) is going to a single Caisse Populaire in Shippagan. Why's every New Brunswicker having to pay for what would seem to me to be bad management. What finanical institution doesn't make piles of dough these days? Plus this line form Boudreau, "well we couldn't get out of the gas tax" is bull. Or what about $2000 handed to every post secondary student in their first year. How about $1000 or $1500 if times are tough? They bailed out of the HST rebate and didn't look back. I'm just finding them a little less than forthcoming. The tax hike in my mind is paying for Liberal promises plain and simple. I am certain they were short and I'll go as far as to agree perhaps the Tories painted a brighter picture financially but everyone knows health care rockets up 7 or 8% or more per year so that shouldn't have come as any great suprise. The Liberals are smart. You don't pull this stuff in the last year of your mandate, you do it in the first, but I am still EXTREMELY disappointed and my trust for the moment is gone.

nbpolitico said...

Well note the $60,000 credit union stuff was for last year (i.e. before March 31) not this year, so the tax increase doesn't really have a lot of effect on that.

I think the difference between the HST thing and the other things you are talking about is that the latter were "top 5 priority" commitments which the pledged to do, and did do, on their first day in office. Scrapping one of those would be far more dishonest than scrapping the HST program which was scrapped due to a combination of Tory mismanagement of provincial finances and Tory deception in not budgeting for it and Tory incompotence in not planning the program.

Moral of what I am trying to say? Are these guys perfect? No. Am I disappointed? Yes. Notwithstanding this, am I a lot happier that they are in office and not the Tories. YOU BETTER BELIEVE IT!

nbpolitico said...

Also on the credit union thing. Banks are federally regulated, credit unions are provincially regulated, which creates a far different set of circumstances.

Federally, there is the CDIC which protects Canadians' money in the case a bank goes tits up. In New Brunswick, there is no such agency to protect those who have money in credit unions if there is trouble there, so, if something goes wrong, the province has to step in or else a lot of ordinary New Brunswickers could stand to loose their life's savings.

scott said...

In New Brunswick, there is no such agency to protect those who have money in credit unions if there is trouble there, so, if something goes wrong, the province has to step in or else a lot of ordinary New Brunswickers could stand to loose their life's savings.

Hey, if they chose to invest their money with an unstable institution, so be it. The government doesn't bail out Nortel Betworks on the premise that a lot of shareholders will lose their hard earned life savings, so why the exception with the credit union?

IMHO, it's up to the markets to decide who will be a winner or a loser when it comes to the private sector or the banking industry.

Moreover, it's not a crime for the government to form policies which directly affect the mobility and policies of banks [i.e. mergers, etc.], but to get involved directly with their finances is unjust to say the least.

I guess this is no big deal for Liberals as they have always been in the business of big government chosing winners and losers instead of forming policies and gettingout of the way so that it is much easier for business and banking industry to succeed.

Anonymous said...

First, I made a typo, in Maine there are TWICE as many representatives as in New Brunswick yet NB politicians make twice as much. No security? Come now, after two elections they are set up for life, and if they are really good, they can get in on federal senate seats and virtually have first dibs on jobs-take a look at Brent Taylor's new job!

But you guys are in the waaaaay minority thinking such high thoughts about politicians, and I bet you've never tried calling an MLA at home. It doesn't work, you get a machine or their number is unlisted. It is extremely difficult to even get an appointment. Anybody that thinks they work 24/7 is listening to too many politicians.

Making almost twice the average salary is hardly 'unfair', and listening to complaints, when they happen is a hell of a lot easier than HAVING those complaints. Ever watch them on days during question period? Their job consists of pounding thd desk and applauding.

In the province which previously had the highest paid premier in canada its a hard sell to state they are underpaid. There is evidence that in the maritimes they are paid less than elsewhere, but I couldn't find a source that listed salaries.

However, just go to their websites. Ontario politicians pass about six times as much legislation than in New Brunswick. Even Nova Scotia passes substancially more.

Since they've come into power they've passed a total of ten bills. Keep in mind also that politicians don't write bills, there is staff that does that.

And of course then you've got almost half the MLA's who literally have NOTHING to do. Everybody in Edmunston knows full well there is no point griping to their MLA about something, because there is nothing he can do about it.

Even a backbencher has very little power in their own government. The 'work' they do is primarily in committee's, but agian, not all of them do that. And even that is pretty light work. Go work in a garage sometime if you want to see what work is like.

And Scott, I think you're being a little tough on Shippagan. I looked it up, and posted at Spinks website, that no other banks are even in the area. The CU has 227 million in loans on 261 million in assets. It has 505 commercial loans worth 17 million. Clearly this credit union is doing what the province does for Irving, which is act as their bank anytime they want.

Nortel, by the way, was literally saved from bankruptcy by the federal government. The question that should be asked, is if bank deposits are insured federally, why aren't credit unions? Then at least those people wouldn't lose all their savings and have to go on welfare (the outcome of which is far worse than guaranteeing a loan to keep the CU functioning). But from looking at their statements, this CU clearly deserves any small help the province can grant.

Anonymous said...

PS, that was unfair on the Shippagan CU, its doubtful they act like the province does with Irving since they don't get special tax breaks and from their records it seems that they keep pretty good accounts over the years. I don't want to imply that every business in Shippagan can do like Irving does and just walk in and get their credit union to bend over backwards for them. That MAY be the case, but we don't know that yet.

Spinks said...

No other banks in Shippagan Mike (anon 1:48)? Have you been there? There's at a Bank of Nova Scotia and a National Bank on the main drags through town.

Anonymous said...

Having a retail outlet isn't the same as having a bank presence. The question is, how much investment do those banks have in town? How many commercial loans? How much industry have they fostered?

nbpolitico said...

In the province which previously had the highest paid premier in canada its a hard sell to state they are underpaid.

Bernard Lord was in that category because the PC Party of New Brunswick gave him $60,000 in addition to his approximately $90,000 salary as premier.

That has nothing to do with MLA/politician pay.

Spinks said...

Um, I don't want to belabour a point Mike but since you're such a stickler to everyone else for 100% perfection, you did say there were no other banks in Shippagan. There are. You can do your business in there just like the CP. The CP just has more customers. Just keeping you honest. :)