The myth of tax cuts

I know I have talked about this subject before but after the new Lord budget promising additional small tax cuts to individuals and small businesses, I felt it appropriate to raise the point again.

Bernard Lord was elected in 1999 and chose to pursue a Mike Harris-style approach to government. Cut spending (except education/health), cut taxes, get out of the way and let businesses grow the economy. As I have stated before, New Brunswick is not Ontario. After five years of this philosophy, we have seen a net out-migration of almost 6,000 people (compared to 17,000 net in-migration in Richard Hatfield’s first five years), the second worst rate of immigration in Canada (compared to a healthy rate during Hatfield’s first five years), the second worst rate of job creation, and GDP growth below the national average all but one year (and predicted to be lower for the next three).

This approach to governing is clearly not working. They brag about cutting spending in all areas except education and health. What could possibly motivate them to promote this? Is government only about education and health? They brag about their small business tax cuts. Well, they have the second worst rate of small business growth in Canada. They talk about income tax cuts. We already pay, on average, the second lowest total income taxes of all provinces. Not because our rates are low, but because our income in low and therefore taxed less.

And they brag about balanced budgets. This one always confused me – I must admit. We need between $3,000 and $4,000 for every New Brunswick (per person) in Ontario and Alberta taxpayer dollars just to cover basic government services and they talk about balanced budgets. That’s a bit like a money losing division of a corporation braggin about how good they are doing. They can brag but ultimately, the company will shut them down.

In Canada, we don’t ‘shut down’ provinces. We just let them die a slow death.

And with Lord, that slow death has been accelerated every so slightly. The average New Brunswicker doesn’t really inform themselves about out-migration, about GDP growth, about industry closure. Oh, look honey, another plant closure in Tracadie. That’s too bad. Now move on to Brad Pitt’s latest fling.

But the government should know better. They should see these numbers, realize that the Mike Harris-style is not working (and the billions in deficits in Ontario suggest that maybe it didn’t work so well there either – the effect just lagged a bit). They should dramatically change course, now.

But you can’t teach an old dog new tricks. Especially when Fido is looking to upgrade to a larger house in Ottawa.

So hunker down. Get ready for the CFIB to praise the government’s small business tax cut while an increasing number of small businesses go under. Get ready for all the gloating and preening about ‘prosperity plans’ and the wonderful success of the government. Then, as I do, take a quick look at the real economic numbers, sigh, and go about your business.

Hatfield was in for 17 years. Frank was in for 10 and could have stayed in for 20. New Brunswickers don’t like to change government.

I’ll probably be whining 5-6 years from now about the same topics.

…wait a minute, that sounds like fun!