Taxpayer Group Praises, Criticises Canada’s Provincial Budgets

A Canadian dollar coin is pictured in this illustration picture taken in Toronto January 23, 2015. Reuters/Mark Blinch/File Photo

The federal government could learn from New Brunswick’s prudent budgeting, says the Canadian Taxpayers Federation (CTF). CTF’s evaluations of other provinces haven’t been so shining, however, as many provinces have unveiled their budgets in recent days.

New Brunswick Premier Blaine Higgs held the line on sweeping income tax cuts from last year, CTF noted in a March 23 release. Higgs reduced net debt by $2 billion, and projects a surplus every year for the next three years. His budget focuses on key sectors, including health and education.

“New Brunswick is ... the only province in Canada that can say that it has a lower debt load than it did five years ago,” CTF said.

Tax relief under Higgs has amounted to $350 million, as the premier noted in his budget speech earlier this week. “New Brunswick now has the most competitive income tax regime in Atlantic Canada,” CTF said.

On the other hand, CTF called Ontario’s budget “a spending parade.”

Ontario

“After Ontario finally balanced the books for the first time in over a decade, Ontario Premier Doug Ford is plunging the province back into deficit,” CTF Ontario Director Jay Goldberg said in a separate release on March 23.

“Ford had a strong hand dealt to him with higher revenue and a budget that was already balanced last year and he tossed away the cards,” Goldberg said.

Ontario is expecting a deficit of $1.3 billion in the coming year. “The government could balance the budget this year, and it should,” Goldberg said, noting that debt interest payments for the coming year alone are estimated at $14 billion.

Ontario Chamber of Commerce President Rocco Rossi praised Ford’s budget for its “investments that support greater productivity,” according to a release by the Chamber on March 23.

Rossi lauded a $425 million investment in mental health and addiction services over three years. He also welcomed boosts to Ontario manufacturing and pathways to health care jobs.

Alberta, BC

CTF held Alberta up as another exemplar. Premier Danielle Smith posted a $2.4 billion surplus, paid off $13 billion in debt, and announced legislation that would require half of all future surpluses go toward repaying debt.

Alberta provides a good example, CTF said, while British Columbia provides a bad one.

B.C. will have a deficit this year of more than $4 billion, after ending 2022 with a forecasted surplus of more than $3 billion. CTF criticised it for “big deficits and no plan to balance the budget.”

The province will pay debt interest charges of $3.3 billion this year. “That’s billions of dollars that can’t be used to hire more nurses or lower taxes because it’s going to the bond fund managers on Bay Street,” Carson Binda, CTF’s B.C. director, said in a release.

Saskatchewan

Saskatchewan earned CTF praise for balancing its budget, but the province “is wasting an opportunity by not committing to reducing the debt over the long term,” said CTF’s prairie director, Gage Haubrich, in a release.

The province is paying down $1 billion of its debt this year, though it has another $17 billion or so to go.

With record revenues in Saskatchewan, the province should have returned some of it through tax relief, CTF said. It noted that Alberta, Ontario, and Newfoundland cut gas taxes, and Manitoba, Quebec, and New Brunswick recently cut income taxes.

Manitoba

Manitoba’s coming income tax relief is welcome, CTF said. The province is increasing the portion of tax-free income from about $10,000 to $15,000. It will also provide relief by adjusting income tax brackets.

Its deficit is $363 million, and projected debt will reach $31 billion by the end of the year.

CTF criticised Manitoba’s spending on corporations. “Budget 2023 includes millions spent on corporate welfare, including $50 million to a venture capital fund, $35 million through so-called economic development loans and $10 million to the Manitoba Mineral Development Fund,” CTF said in a March 7 release.

Atlantic Canada

Nova Scotia’s budget failed in planning for debt reduction, CTF said.

“This budget shows Premier Tim Houston wants to run a credit card government with big deficits for years to come,” CTF Federal Director Franco Terrazzano said in a release.

The deficit for this year will be $279 million, and total debt is expected to reach $19.5 billion by the end of the year.

CTF also criticised the “bracket creep” tax hike in Nova Scotia. This happens when inflation bumps taxpayers into higher brackets, even though they can’t actually afford more. Governments should move the brackets with inflation, CTF said.

CTF praised Newfoundland and Labrador’s gas tax relief, but criticised its return to deficit spending.

This year’s projected deficit is $160 million, bringing the province back into the red after a surplus of almost $800 million last year.

Regarding Prince Edward Island, CTF says, “Rather than present a budget, Prince Edward Island Premier Dennis King has plunged his province into an election.”

“While the election call was only six months ahead of schedule, King’s snap election has deprived Islanders of an opportunity to evaluate budget 2023 to see whether the government truly is on the side of taxpayers,” CTF said in a March 14 release.

Quebec

The Quebec government is projecting a shortfall of $4 billion for 2023–2024. It does not expect to balance its budget until 2027.

CTF did not comment on Quebec’s budget, nor on the territories, as of publication. Quebec’s Finance Minister Eric Girard presented the budget on March 21, and it features an income tax cut of 1 percent to each of the two lowest tax brackets.

Yet, said think tank MEI in a release, “Quebec remains, this year again, the place with the highest tax pressure in North America.” Income tax for those two brackets will now sit at 14 percent and 19 percent.

Quebec will pay $9.5 billion in debt interest this year, equivalent to all the income tax paid by 1.5 million Quebecers, said MEI.

Overall, the provinces and federal government are expected to spend $68.6 billion on interest payments, the Fraser Institute said in its assessment of debt interest for 2023.

Yukon, Northwest Territories, Nunavut

The Yukon has a surplus of more than $48 million in its new budget. Its $1.94 billion budget is mostly funded by Ottawa, according to the CBC, and much of it will go to highway upgrades and developing more residential, commercial, and industrial lots.

The Northwest Territories announced in February it will have a $178 million operating surplus.

Nunavut’s $3.06 billion budget will have a deficit of $8 million. Finance Minister Lorne Kusugak said he would draw from last year’s $40 million surplus to make up for it, according to local publication Nunatsiaq News.