Budget Choices: Boudreau talks with MO)))

Minister Victor Boudreau says Premier is listening to tax payers who don't want to see cuts in Health Care and education. But other tough choices have to be made. Does this mean the government is guaranteeing results from the next budget?

Victor Boudreau, the Minister in charge of the Strategic Program Review that will culminate in an austerity budget on February 2nd, spoke with MO))) this afternoon about the process and about the importance of public participation in the process.  There will be a public forum on January 19th at the MAEA where the public can have their say about the “CHOICES” report that lays out 32 possible areas of spending cuts and revenue increases that will tackle the Province’s $453 million budget deficit.

Boudreau said the process has been long and thorough.  “ I am glad to be seeing the light at the end of the tunnel.  It is getting close to the end of a process that started over a year ago, and there is no question that it has been a big undertaking.  But I think it has been a positive one as people are paying attention to the challenge we are facing. 

Q1.  Minister Bourdreau, you urged participants in the public sessions to be more specific with their recommendations for ways to cut the budget deficit, and CUPE who said they attended all the sessions said many of the options in the “Choices” report were not mentioned at any of the public sessions.  So, how was public participation  helpful in the Strategic Program Review helpful?

“ I think the public participation has been very important in this process.  The process has been lengthy and exhaustive.  We had 14 stops around the province that thousands of people attended, hundreds of ideas were generated that went into the “What Was Said” report.  The civil service has been working for the past few months to narrow down those ideas to come to the 32 options that are in the “Choices” report, because we have to now make some decisions.

“When we talk, for example, about administrative efficiency that could bring between $10 and $50 million in savings, you can list all the ideas under that heading one by one.  We are trying to do this in a way that is feasible and courage people to take the time to read the report, that is why we wanted to keep the report,  14 pages, as brief as possible.  It has highlighted the 32 choices and we have to do about half of what is in that report to meet our goal.”

The target was $600 million.  In our first budget last year, we looked at ourselves first – the politicians and the senior civil servants , we came up with about $115 million in savings in the first budget by freezing salaries for MLAs and ministers and reducing the number of ministers and freezing the budgets of legislative officers.  We did a lot internally because we knew if we were going to ask New Brunswickers to do with less, we were going to have to lead by example.”

Q2.  Today the CBC is reporting that the budget deficit you are reporting in the “CHOICES” report is a lot lower when compared to more recent audited financial statements  (2013-14 deficit was $600 million, todays deficit $303 million plus $150 million in contingency fund).  Does this reduction in the deficit indicate that current budget measures are working and that a hike in the HST may not be necessary?

“That’s Blaine Higgs trying to rewrite history.  The last quarter the projected deficit was $53 million.  There are things in there however like a one-time adjustment for the shared risk pension adjustments.  We have had consistently for the last 7 or 8 years a structural deficit in the $00-450 million range.  That’s why through SPR the target was going to be between $500-600 million so we can be sure we get what we need to return to surpluses, and to account for a possible negative impact on the economy caused by an austerity budget.”

“We are on track.  We have been hitting targets that we are setting for ourselves, and the last update shows a 453 million deficit, and that does include a contingency fund of $150 million that is only there if we need it, and if we don’t need it, it will come off the bottom line.”

“The $453 million is still a pretty sizable chunk left to deal with.  The Premier earlier this week said he has been listening to concerns about Health care and education, and how we hold those two program near and dear to our heart, he said he is prepared to protect them, but that’s going to mean that the 30 other choices in the report are that much more important.”

“There will not be any radical changes to those two departments based on the feedback the Premier received from new Brunswickers.  He is prepared to take those two off the table so to speak, but that doesn’t mean the work is done.  We still need to address this deficit which would equate to about half of what’s in the CHOICES report.  And I believe you have to take a balanced approach, and do about half on the revenue side and half on the expenditures side.”

“There are still some tough decisions left to be made, and this whole exercise is to let New Brunswickers have one last chance to have their say.”

“We are paying $685 million a year just on the interest on our debt.  That’s more than we invest in Post-Secondary Education Training and Labour.  That’s more than we invest in the departments of Agriculture, Tourism, Public Safety and Justice combined.  Status Quo is not an option.  New Brunswickers have to identify which options they are prepared to live with.”

Q3.  It appears the budget the public either will pay more, do with less, or a combination of both.  What assurances do New Brunswickers have from the government that their sacrifices will yield results?

“There is no question that the budget we table on February 2nd will make a difference.  We will be able to demonstrate that the decisions we make will lead to a balanced budget in 5 years.  We had committed in our platform to balance the budget in 6 years, and the balance sheet will show we will balance the books in the next 5 years as promised.”

“The idea here  is that on February 2nd people will know where the stand for the next few years.  But then there is the implementation of these plans that might take several months  for saving or revenue streams to occur, but the trend line will show a reduction year over year until we get to a balanced budget 5 years from now.”

Q4.  Miramichi has some specific concerns about the regional economy.  Will the budget address any of those?

“There is no question we are looking at this from a Provincial perspective, but we are also making sure that when we make the decisions on the budget no one region in the province is penalized or that no one segment of the population id penalized disproportionately.  There is a bit of a regional scan that goes along with this exercise as well.”