Attacking the deficit: Being part of the solution

Donald Savoie is the Canada research chair in public administration and governance at the University of Moncton.

Savoie has written extensively on regional economic development and public administration for 30 years.

His best-known books include: Visiting Grandchildren: Economic Development in the Maritimes (2006), Pulling Against Gravity: Economic Development in New Brunswick (2001) and Governing from the Centre: The Concentration of Power in Canadian Politics (2000).

Savoie also served on the 2006 transition team for Liberal Leader Shawn Graham. And he was the chairperson of the economic advisory panel for Nova Scotia Premier Darrell Dexter.

Savoie has also writtenThe politics of the coming crisis essay on Aug. 26 andCampaigning and governing in N.B.: two solitudeson Sept. 22 for CBC News.

For a neophyte in politics, the newly minted Finance Minister Blaine Higgs hit the nail on the head when he observed on his first day on the job that, "We will need everyone to consider what's needed versus what's wanted because we all have to be part of the solution."

Simply turning the steering wheel over to Higgs and say, "now, you drive the deficit down," is a recipe for failure. We are all in this together and we must do our part to have any chance of success. However, early signs that New Brunswickers are willing to be part of the solution are not promising.

First things first, New Brunswickers need to appreciate the challenge at hand. It is great. What we have is a structural deficit, not a cyclical one, where, in the later case, improving economic circumstances alone would bring the deficit down.

There are other forces at play that will make the challenge greater still: an aging population, Ottawa's need to get its own fiscal house in order, which has wide implications for have-less provinces, and intractable problems confronting key economic sectors, such as forestry and energy.

To make matters more daunting, one suspects that deficit is greater than $747-million. The new government, as all new governments are want of doing, will soon reveal a bleak balance sheet, worse than anticipated.

It will also want to make public a number of what it will label outstanding spending commitments made by the former governments in recent months, including payments to Liberal-friendly consultants, lawyers, communication specialists, businesses and partisan appointees as they leave government.

Art of governing

This is politics as usual and, as far as partisan politics goes, it is fair game and perhaps this information should be made public for all to see. Asking New Brunswickers to be part of the solution requires coming clean on such expenses.

At the end of the day, it is public money from New Brunswick taxpayers, not government money. Though politicians from all parties take great pride in saying in opposition that they will be parsimonious with taxpayers' money, they soon forget once in office. But it will not address the problem.

As the new government will soon discover, the art of governing is vastly different from the art of political campaigns. One requires discipline, the other calls for political bombast and an ability to score points.

More to the point, one is an exercise in the search of political power and all the benefits it entails. The other is a vastly different reality: it requires making choices between competing interests. In a sense, one is theatre, while the other is political and economic reality.

Less anyone thinks otherwise, the need to deal with the province's fiscal situation is not a right-wing agenda or some neo-conservative strategy to cut government down to size.

It only takes a moment's reflection to appreciate that if the government is forced by financial markets to introduce indiscriminate spending cuts in all sectors, then it will be the most vulnerable in society that will pay the heaviest price.

Those with financial resources will be able to cope with less government programs and services.

The recent Standard and Poor's decision to downgrade New Brunswick's economic outlook speaks volume on the state of the province's fiscal position.

Changing N.B.'s political culture

There is little indication that New Brunswickers are prepared to give life to Higgs' call to become part of the solution. Wishing it or pleading for it will not suffice. The challenge at hand is nothing short of changing the province's political culture.

Even before cabinet ministers saw their new offices and were able to consult their departmental briefing books, lobby and special interests groups were lining up to demand both "wants" and "needs" from the government. Health-care specialists, youth advocates, those promoting research and development, among others, made the case for special attention.

Some of them insist that they are promoting "investments" and not the spending of public funds. It is easy, much too easy, to recast spending plans into investments in virtually every sector from public infrastructure to education and health care. Lobby and special interest groups should remember that, with a $747-million, or plus, deficit, even investments are done on borrowed money.

I am still waiting for groups to come forward with suggestions to cut spending or to secure savings from current programs. I cannot imagine, for example, that health-care specialists are unable to fund substantial savings from a $2.3-billion budget.

Simply looking to others to identify savings or spending cuts will not work. Again, looking to Higgs to do all the heavy lifting is a sure recipe for failure.

Indeed, Higgs is being asked to implement his party's electoral platform and achieve a balanced budget over the next four years. New spending commitments have to be honoured and all of this without raising taxes, notably the Harmonized Sales Tax.

I wish him well, though I do not think that all of the above can be achieved without a substantial redefinition of the role of the provincial government. Redefining the role of government in society, however, takes public consultation and hence it cannot be achieved in short order.

New rule

In the meantime and to assist Higgs in giving life to his call for everyone to be part of the solution, I offer the following advice. Higgs should tell his cabinet colleagues, caucus members, lobby and special interest groups and, indeed, all New Brunswickers, that they can only come forward with new spending suggestions if they identify realistic spending cuts elsewhere that exceed the proposed new spending by 10 per cent.

This will quickly separate the "wants" from the "needs" while the government pursues the more ambitious agenda of redefining its role in society.

Departments would think long and hard before coming forward with their "needs." If they judge them to be sufficiently important, then they must be prepared to pay the price.

Given our fiscal position, it is nothing short of irresponsible for groups and individuals to call on government to spend more money without identifying where spending cuts and savings can be made.

The media can become part of the solution by asking all those urging the government to embrace new spending commitments to identify a comparable level of spending cuts of plus 10 percent.

With fewer new proposals landing on his desk, the minister of finance and his officials would have more time to carry out a fundamental program review. This is necessary if our political leaders are to rethink the role of government in society.

There is an important caveat here. This review must or, rather needs, to involve New Brunswickers for it to have any chance of success. The mantra should be communicate, communicate and then communicate some more with New Brunswickers on the challenges at hand and possible solutions.

Sale of assets

The minister of finance and his officials also need to look at government assets to see if some can or should be sold to the private sector. He should make it clear, however, that all receipts from such sales will be applied against the provincial debt. They are not to be spent on new or existing programs.

I do not think that I am overstating the case that New Brunswick is confronting a fiscal crisis in the making. Let's not waste the crisis by doing nothing or doing too little.

Our political leaders should realize that difficult decisions are best taken after proper consultations and fairly early in a government's mandate. No small agenda, but then, we need a Churchillian effort to right the ship of state.

There is an old saying, "Come the moment, come the man." The moment is at hand.

All New Brunswickers must hope that Higgs is the man. He stands a much better chance of being the man if New Brunswickers recognize the enormous challenge he has inherited and are willing to be part of the solution.