In the Media

Just as the coming election season will no doubt serve as a springboard for more potentially costly political pledges, a new study from the Atlantic Institute for Market Studies has highlighted how New Brunswick has little fiscal room left to maneuver. The study, prepared by University of New Brunswick economist David Murrell and AIMS policy analyst Shaun Fantauzzo, argues that because of expected declines in federal transfer payments over the near term New Brunswick must quickly adjust its expenditures in order to better reflect an era of diminished revenue. The numbers coming out of the report are certainly a sober read for any politician who may be tempted to promise grandiose pledges in a few short months.According to AIMS,the provincial debt is equivalent to 37.7 per cent of New Brunswick’s GDP. On a per-capita basis, every single New Brunswick resident is burdened by more than $16,000 in provincial government debt.

With a provincial election looming and the New Brunswick legislature about to adjourn, Premier David Alward is in the hot seat over his party’s spending habits. The Atlantic Institute for Market Studies says that while New Brunswick has taken steps to curb spending, it still needs to tackle its massive and ballooning debt. A new study from the Institute suggests the government isn’t working hard enough to reduce the deficit and trim what will soon be more than $12 billion in debt. The study’s co-author, David Murrell, says with Ontario and Quebec now receiving equalization payments from Ontario, reducing debt in a small province like New Brunswick is critical.

A new report by the Atlantic Institute for Market Studies is making what some may consider controversial recommendations on the best way to deal with the New Brunswick debt problem. Shaun Fantauzzo is a co-author of the research paper. He says, beyond the language situation, New Brunswick has a lot of duplication in its health and education systems. “We recommend looking at that and pursuing a rationalization program similar to Saskatchewan’s in the 1990_s when that province faced bankruptcy”, says Fantauzzo.

New Brunswick’s growing debt is primarily the result of declining federal transfer payments, according to a new report analyzing the province’s fiscal situation. The report also suggests the closure of some rural hospitals and the consolidation of schools to counteract the province’s financial woes. The research paper released on Tuesday by the Atlantic Institute for Market Studies finds that New Brunswick faces a“significant”public debt problem. It recommends that spending restraint is the “best available solution”–suggesting some controversial ways to turn things around. The report maintains the cause of the fiscal trouble is largely a loss of federal money. “Economic weakness in Quebec and Ontario has led to those provinces consuming a greater share of equalization payments and other federal transfers, resulting in revenue losses in New Brunswick and other small provinces," reads the paper entitled New Brunswick’s Debt and Deficit Problem: A Historical Look. “New Brunswick

AIMS Director of Research and Programmes Ben Eisen discusses the Institute's new paper on New Brunswick's provincial debt on CTV Atlantic