Study
| EST. READ TIME 1 MIN.New Brunswick’s spending restraint creating tax relief opportunity of more than $3,600 per tax filer
New Brunswick’s Divergent Finances: A Possible Opportunity for Tax Reduction
Summary
- In recent years New Brunswick has begun to make substantial progress addressing its fiscal challenges. Specifically, it has exercised greater restraint with respect to its spending growth than the other two Maritime provinces.
- This restraint has contributed to positive fiscal outcomes for the province including budget surpluses and a declining debt-to-GDP ratio.
- The province began making significant fiscal progress in 2017/18 when it started running balanced budgets, a decision that it has maintained in subsequent years.
- These surpluses have contributed to a reduction in the province’s net debt-to-GDP ratio; it declined from 38.9 percent in 2017/18 to 25.1 percent in 2022/23. As recently as 2015/16, New Brunswick was the second most indebted province in Canada. In 2022/23, New Brunswick had the fourth lowest debt-to-GDP ratio (pending the finalization of annual statistics), behind only Alberta, British Columbia, and Saskatchewan.
- This bulletin shows that if government revenue continues to grow on its current trajectory, the province will see a substantial operating surplus developing over time that could generate the fiscal room needed for substantial tax cuts.
- Under this scenario, the government would have the option of introducing transformative tax policy changes. For instance, the province could reduce income taxes by $3,604 per income tax filer while maintaining the current fiscal balance.
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Ben Eisen
Senior Fellow, Fraser InstituteBen Eisen is a Senior Fellow in Fiscal and Provincial Prosperity Studies and former Director of Provincial Prosperity Studies at theFraser Institute. He holds a BA from the University of Toronto and an MPP from the University of Toronto’s School of Public Policy and Governance. Prior to joining the Fraser Institute Mr. Eisen was the Director of Research and Programmes at the Atlantic Institute for Market Studies in Halifax. He also worked for the Citizens Budget Commission in New York City, and in Winnipeg as the Assistant Research Director for the Frontier Centre for Public Policy. Mr. Eisen has published influential studies on several policy topics, including intergovernmental relations, public finance, and higher education policy. He has been widely quoted in major newspapers including the National Post, Chronicle Herald, Winnipeg Free Press and Calgary Herald.… Read more Read Less… -
Milagros Palacios
Director, Addington Centre for Measurement, Fraser Institute
Milagros Palacios is the Director for the Addington Centre for Measurement at the Fraser Institute. She holds a B.S. in IndustrialEngineering from the Pontifical Catholic University of Peru and a M.Sc. in Economics from the University of Concepcion, Chile. Ms. Palacios has studied public policy involving taxation, government finances, investment, productivity, labour markets, and charitable giving, for nearly 10 years. Since joining the Institute, Ms. Palacios has authored or coauthored over 70 comprehensive research studies, 70 commentaries and four books. Her recent commentaries have appeared in major Canadian newspapers such as the National Post, Toronto Sun, Windsor Star, and Vancouver Sun.… Read more Read Less…
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