New Brunswick has a fiscal mal de ventre

We've become regrettably disconnected from one another here in the Maritime provinces. For example, in Nova Scotia the only thing we seem to know about New Brunswick these days is that prices are cheaper over the border, causing embarrassment for the Nova Scotia government.

Gas stations and other businesses are wobbling and closing in the Amherst area because people are flocking to New Brunswick to gas up and buy stuff. Business people complain, with the accusation that Nova Scotia's taxes are too high.

But watch the New Brunswick election for an eye-opener. Thanks to continuous tax cuts, which are great for shoppers but not great for deficits and debt, New Brunswick's finances are spiralling out of control. You'll remember the theory: If you cut taxes -- the lower the better -- you make the economy boom, end up with even more government revenue and live happily ever after, especially if you also slash public services. In actual fact, you get suckered by powerful interests and their think tanks and ruin your public finances. For one small province, it's now two consecutive deficits of three-quarters of a billion dollars, and growing.

The Liberal and Conservative parties are now caught in their own trap: stay the catastrophic course, or admit they were wrong and explain to the public they have to raise taxes. They're staying the course, and more: They're desperately promising all kinds of expensive goodies.

Meanwhile, get this: The NDP is emerging as the voice of fiscal sanity. It has gone from five per cent at the last election to somewhere in the 20s in the polls, and is talking about needing the balance of power to rein in the Liberal/Tory wastrels. Sound familiar? Even more interesting is that the good example it's using is Nova Scotia's NDP government, which has a sound plan for deficit reduction, has put an end to "March madness" (wherein departments blow any surplus they might have so they won't get cut the following year), and has just signed a painless agreement with the public service despite its plan to cut it by 10 per cent during this mandate.

There's been an interesting see-saw dynamic between Nova Scotia and New Brunswick over the past half-century. From the mid-1950s, Nova Scotia was getting all the kudos. There were the good vibes from the economic successes of the Stanfield government, and the province had a romantic image for the growing tourist trade. New Brunswick was seen as struggling amid English-French conflicts, and in tourist talk was sometimes referred to as "the road to Nova Scotia."

All that all changed after 1980, when Nova Scotia entered its descent into debt and scandal during the 1980s, followed by the hapless effort of the John Savage government to set things right in the 1990s. Meanwhile, New Brunswick had been getting its act together, and under premiers Frank McKenna and Bernard Lord, both touted as possible national leaders for their parties, it was New Brunswick's turn to get all the positive national attention.

One little moment of truth from those years remains with me. It was the mid-1990s and there was talk of Maritime co-operation (again) on something or other. Meanwhile, some new budgetary horror story had emerged from the Savage government. One day, listening to Radio-Canada out of Moncton, I heard the New Brunswick Chamber of Commerce president, who I believe was the mayor of Richibucto, warn in a low voice that New Brunswick, with its sound administration, would be damaging its reputation to be seen co-operating with such fiscal riff-raff as Nova Scotia.

But New Brunswick had started sipping from the poisoned chalice of neo-con ideology. It started with McKenna, who went on to be a hero of corporate Canada. The result is a massive mal de ventre. New Brunswick is just a minor example. There are others. The granddaddy is, of course, the United States.

After some 30 years of tax-cutting starting with President Ronald Reagan, the U.S. did in fact have an unprecedented boom, in which the poor and middle-class actually lost ground, with the billionaires getting all the benefits and more -- and are now financing the Tea Party, the Republican Party and other rackets to keep the deception going. Meanwhile, budgetary deficits are out of sight and the result is a near-depression.

New Brunswick Premier Shawn Graham was on the North Shore recently saying he's sticking to the program of radical tax cuts, promising that it would all come out in the wash because he was going to create "20,000 jobs" in the area. I wonder how many people bought that.

Ralph Surette is a veteran freelance journalist living in Yarmouth County. This article was originally published in The Chronicle Herald.

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