Wednesday, February 21, 2007

Imbalance shimbalance

Rather good point raised by Braeden yesterday. Let's take a look around at recent provincial fiscal news.

We'll start in my old stomping grounds, Beautiful British Columbia, where Gordon Campbell and his finance minister, Carole Taylor, played Santa Claus yesterday. It was budget day and every BCer (that's in BC, not Toronto) earning under $100,000 will be getting a 10 per cent tax cut. Throw in a $375 million program to tackle homelessness and the province and other measures and they're still forecasting a $1.1 billion surplus.

Then there's Quebec, where Premier Jean Charest is about to head to the polls. Not before an election mini-budget though that's balanced and offers up $464 million in tax breaks and $825 million in new regional spending. According to the Gazette, with these cuts included, tax relief for individuals since 2003 will total $3.8 billion.

In Ontario, the government could have posted a surplus last year but they wanted to save that splashy achievement for an election year, so instead they dropped billions into a subway expansion and other spending.

Thanks to the black gold of resource revenues Newfoundland and Labrador are swimming in black ink, and we all know the story in Alberta. Resource revenues are also boosting Saskatchewan's bottom line, which cut corporate tax rates in its last budget and recording a $102 million surplus.

Manitoba projected a $148 million surplus in budget 2006 and $99 million in tax savings. In New Brunswick, spending was ramped-up, tax relief was given and a $22 million surplus projected in 2006. Nova Scotia balanced its budget last year, projecting a $71.9 million surplus and dedicating funds to energy and tax relief. As fair as I can tell, PEI is alone in the red, projecting a $12.5 million deficit for 2006/07.

Now, remind me again please about that so-called, critically important fiscal imbalance? It's kind of hard for the provinces to say they critically need more money from the feds when nearly all of them are returning surpluses and cutting taxes.

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Anonymous said...

"Thanks to the black gold of resource revenues Newfoundland and Labrador are swimming in black ink,"

Actually, not really. They are extremely dependent on it, yes, so much so that in November 2006, the government admitted that it was currently running an operating deficit of $39.8-mn, a drop from the $6.2-mn surplus announced in the spring budget. This is largely due to the halt in production at the Terra Nova oil field which led to a loss of royalties estimated to be worth about $100-mn.

Anonymous said...

All the more reason for Dion to propose an alternative budget that calls for increased government spending on social programs. Instead of giving money to the provinces, it should be in the hand of single mothers trying to make ends meet.