Thanks to Blaine Higgs’ strong management, New Brunswick’s debt is at historically low levels and the province is now positioned to cut taxes in a historic way.
As Higgs seeks another mandate this year, now is the time for him to maintain his signature fiscal prudence and couple it with a tax relief agenda that would put New Brunswick on the map as one of the lowest-taxed destinations in Canada.
Just five short years ago, New Brunswick’s debt was spiralling out of control and the idea of tax relief seemed like a distant dream.
The year before Higgs was elected, former premier Brian Gallant increased New Brunswick’s net debt by more than $1 billion as his government ran the province’s tenth straight deficit. Money spent on interest charges alone exceeded New Brunswick’s post-secondary education budget.
Today, New Brunswick leads the nation when it comes to sound financial management. Between 2018 and 2023, Higgs led the only government in Canada that posted a surplus every year, including throughout the pandemic.
As Higgs enters his sixth year in charge of the Legislative Assembly, New Brunswick is poised to run its sixth consecutive surplus. Higgs also managed to lower New Brunswick’s debt by more than $2 billion.
New Brunswick’s debt-to-GDP ratio has declined from more than 40 per cent (when Higgs took office) to roughly 25 per cent today, one of the lowest levels in Canada.
And consider this: as most provinces and the feds have seen their debt interest payments soar due to higher interest rates, New Brunswick’s interest charges have gone down. Since Higgs has repaid so much debt, New Brunswick will spend $70 million less this year on debt interest charges than it did the year before Higgs took office.
After years of careful management, it’s now time for Higgs to deliver on historic tax relief for New Brunswickers. He should do so by slashing the sales tax.
At a time when taxpayers are confronting higher prices virtually everywhere and living costs remain high, lowering the HST would allow New Brunswickers to save money on almost everything, from gas to clothing to home heating.
A report recently released by the Fraser Institute suggests that New Brunswick could afford to start lowering the sales tax this year and eliminate it altogether over the next decade so long as politicians in Fredericton maintain Higgs’ cautious approach to government spending.
A fully implemented phase out of New Brunswick’s 10 per cent sales tax would save the average New Brunswick family $4,100 a year.
Higgs could make a start by cutting the HST by two percentage points this year in his 2024 budget. That move alone would save the average New Brunswick family $820 a year.
This October, New Brunswickers are scheduled to go to the polls. Higgs has built a strong record over the past five years. He’s slashed the province’s debt and introduced modest income tax cuts. But if Higgs wants to truly make his mark on the province, he must deliver significant tax relief.
New Brunswick families are dealing with many of the same struggles taxpayers across Canada are facing. More than 50 per cent of families say they’re $200 away from not being able to pay their bills. Nearly 1.1 million Canadians are working multiple jobs just to make ends meet.
Families could benefit immensely from a sales tax cut that would put hundreds of dollars back in their pockets. Thanks to Higgs’ careful management over the past five years, New Brunswick is positioned to deliver exactly that.
The time for Higgs to pull the trigger on tax relief is now.
Jay Goldberg is the Interim Atlantic Director of the Canadian Taxpayers Federation