Health care is the biggest expenditure in the New Brunswick budget, just as it is in all the other provinces. However beyond that big expense our understanding of where public funds are spent is kind of fuzzy. Are we short-changing municipalities? Do we spend too much on tourism sites? Does private business receive too much support? These are some of the questions being raised on this election campaign. So what’s the answer?

To change New Brunswick we need to properly fund the programs and services that will drive that evolution. To determine if we are positioned to do that, we need to look at where and how we spend public money now.

We’ve divided New Brunswick’s public money pie according to its primary function. Unsurprisingly, Fixing Social Ills occupies top spot – we spend just under half of the budget on health care services and welfare programs. The rest, in decreasing order of spending are:

#2 – Learning. This includes preschool through to post-secondary education and job training and retraining. Funding for New Brunswick’s chronic illiteracy challenge comes from this pot, as do the operation grants for the province’s four universities and the New Brunswick Community College.

#3 – Running Government. Highlights include: General Government, which covers civil service benefits and pension plans; Government Services, which includes Service New Brunswick; and the Legislative Assembly, which covers MLA salaries, Elections New Brunswick and the Auditor-General. To get a complete breakdown, you can look up individual department’s revenue and expenditures in the 2014/15 provincial budget.

#4 – Paying Off Our Debt. This fiscal year, New Brunswick paid $685 million towards its $12 billion debt.

#5 – Building Communities. Into this category we’ve placed roads, public works, local government, energy efficiency and the environment.

#6 – Boosting the Economy. In addition to Economic Development and Invest NB, we’ve placed the departments that oversee the management of our natural resources – fishing, aquaculture, agriculture, forestry and mining.

#7 – Law and Order. Pretty self-explanatory: policing, the courts and New Brunswick’s laws.

#8 – The Good Life. As I said last week, what’s the point of living in the Maritimes, if it isn’t fun? I’d add to that making sure you and your family stay healthy. Here’s the funding for all the fun and healthy stuff via tourism, culture and preventative health care initiatives. This is where we build New Brunswick pride.

So that’s how we spend our public funds now. The bulk – 88 per cent – is spent on four major functions: helping others who are sick or unemployed, learning, running government and paying off our debt. Everything else – building communities, boosting the economy, law and order, preventative health, culture and tourism, is just 12 per cent of spending.

Is this a recipe for success? Or do we need to try a different mix? What would you increase? What would you decrease? What are our shared priorities for public money?

My choice of words is very specific. I use the words public money rather than taxes because not all Screen-Shot-2014-09-01-at-11.53.41-PMprovincial government revenue comes from New Brunswick taxpayers. According to the Department of Finance’s Pre-election Economic and Fiscal Outlook 2014/15 to 2017/18, New Brunswick receives about 36.4 per cent from the federal government, via the Equalization Program, the Canada Health Transfer and the Canada Social Transfer.

In this fiscal year, New Brunswick received a 10 per cent increase over the previous year’s equalization payment, the third highest bump in Canada, behind Nova Scotia (11 per cent) and Quebec (18.5 per cent). PEI received 6 per cent more, while two provinces reduced equalization payments; Manitoba (2 per cent) and Ontario (37 per cent). Newfoundland and Labrador, Saskatchewan, British Columbia and Alberta do not receive equalization payments.

New Brunswick does not generate enough revenue to pay for all its public services and programs. How do we fix that? Here’s three common ways:

1. Cuts to programs and services;

2. Reduce staff through retirements and, if required, layoffs; and,

3. Introduce new technologies to deliver services in a cost-effective way.

Current and previous New Brunswick governments have tried a combination of these reforms, with a strong emphasis on the first two options. I’m most interested in the third option because it could lower costs and still deliver services, an all-round better result for everyone. However it isn’t likely to be enough, which means the next government will need to try a mix of reforms.

Understanding how we earn and spend public money will help voters figure out where to save it – along with the public services they value the most.

 

Lisa Hrabluk is the founder of Wicked Ideas. Follow her on Twitter @lisahrabluk.

 

Wicked Ideas’ 2014 election series is financially supported, in part, by the New Brunswick Business Council. Wicked Ideas retains full editorial control of all content and members of the New Brunswick Business Council are not consulted or informed of Wicked Ideas’ content prior to publication. 

 

 

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