My name is John Mallory. I have lived and worked in New Brunswick all my life.
I spent my whole career working for the Province of New Brunswick, and for the last 15 years in the public service, I served as Deputy Minister of Finance under Liberal and Conservative Governments. When I retired at the end of 2010, I was the longest serving Deputy Minister of Finance in Canada.
Since retirement I have refrained from making any comment about public issues. I am speaking out now however, because I am deeply troubled about where our Province is heading.
Over the past 20 years our population has stagnated, and our population gets older each year as our young people leave to find work. From 2006 to 2016 there was no growth in the number of people employed here. Our economy has been sluggish at best; indeed New Brunswick has had the slowest economic growth in Canada for the past number of years. Yet in spite of this, for more than a decade, New Brunswick has increased public spending much faster than our economy and population have grown.
We have been paying for public spending increases, not with revenues from a growing economy, but with tax increases, record high transfer payments from other Canadians, and by increasing our public debt. New Brunswick’s debt of $14 billion has doubled in the last decade, and has increased by more than $1 billion in the last 4 years alone. New Brunswick now has the highest debt burden of all provinces of comparable size. We have raised taxes to the point that we are not competitive with most provinces.
This cannot go on. The Auditor General has said this; the credit rating agencies have said this; academics and private agencies have said this; and I believe this to be the case.
It is not surprising that our credit rating outlook has recently been downgraded. Not long ago New Brunswick had the best credit rating of all provinces east of Ontario, and to rating agencies and lenders throughout the world, our province looked much like Saskatchewan and Manitoba. That is no longer the case. Indeed it was not that long ago that New Brunswick had the best fiscal profile in the Atlantic provinces. That also is no longer the case as Nova Scotia has had a much better fiscal record than New Brunswick, in recent years.
Despite New Brunswick’s current financial challenges, now is not the time to give up and just surrender to things as they are. We have been here before. In the early 80’s the province wasn’t balancing its budget and our debt was growing uncontrollably. Beginning in the late 80’s however, political leaders made responsible fiscal management a priority. It took 12 to 15 years of disciplined budgeting and resolve by a number of administrations both Liberal and Conservative to get our public finances back under control. But it got done!
As a result by the early 2000’s New Brunswick ran budget surpluses for a number of years, and indeed over $1 billion was paid down on our public debt. I was there during those years, and it took hard work by Liberal and Conservative Governments to manage our public finances to produce those results. Those governments had to stay laser focused on keeping spending under control; and they did it.
For this election New Brunswick needs a government that will provide strong and bold leadership, not just in the management of our public finances, but also in the delivery of public services, and in the development of our economy. We need a government that has a vision of what New Brunswick could be, and a plan to get us there.
At one time New Brunswick’s economy performed well, we had an industrial base that exploited our location on tide water. We sold our products to the world; we were not timid about using our natural resources to create income and wealth in our province. We need to continue to do this, including developing our shale gas resources in a safe and environmentally sound manner. To refrain from doing this means we will miss an opportunity to create and maintain large numbers of well paying jobs, and we will forgo provincial revenues which we need to support public services here in NB.
I believe we could do so much better as a province. I am convinced, based on my years as a senior public servant, that we have sufficient funds flowing to the Provincial treasury to pay for the services we need. I believe there are sufficient funds now in the system for New Brunswick to have a better health care system with better health outcomes than is currently the case. I believe there are sufficient funds to have a better education system at all levels, with better education outcomes than is currently the case. I believe there are sufficient funds for New Brunswick to have a better built and well maintained strategic highway system than is currently the case, and I believe all these things could be done without increasing the province’s debt and without increasing taxes.
To do this we need a government, whatever its political stripe, that will stay focused on what is good for New Brunswick. In this election and in the years ahead we need a government that has a vision of what we could be as a province. We need a government that has a plan. We need a government that is not afraid to lead. We need a government that will make choices and focus government resources where there are most needed. We need a government that will support real economic growth and adopt economic and fiscal policies that will pay our own way. And most of all, we need a government that will not promise, promote, and adopt policies that are politically expedient, but not in New Brunswick’s long term interest.
John Mallory was Deputy Minister of Finance and Secretary of the Treasury Board for the Province of New Brunswick for 15 years. He holds a BA and MA in Economics from UNB. He is currently an advisor to the New Brunswick Coalition of Concerned Citizens.