New rules needed to attack N.B. deficit: Savoie

New Brunswick's finance minister should refuse to entertain any calls for new government spending unless theyare accompanied by suggested budget cuts to pay for the new program, a public administration expert says.

Donald Savoie, the Canada Research Chair in public administration and governance at the University of Moncton, writes in ananalysis for CBC News that Finance Minister Blaine Higgs should institute a firm new doctrine as he tries to tackle New Brunswick's massive deficit.

"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," Savoie writes.

Savoie said the new rule would force departments, politicians and lobbyists to think about what services they are willing to give up to pay for new programs.

If proponents of aproject believe the new spending is "sufficiently important, then they must be prepared to pay the price," said the public administration expert.

'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.' Donald Savoie, University of Moncton

Higgs said in an interviewMonday that he supports Savoie's concept and would like to see groups and departments come up with ways to cut spending if they want new program funding.

"Tell me what you are going to remove from your previous budget in order to finance this new expenditure. Now the plus 10 per cent, that might be an added issue," Higgs said.

"But certainly causing people to recognize that if a new priority comes into place then old priorities have to shift. In some cases, emergencies may play a role in that and that may not be possible but we'd like to think in most cases it would absolutely be possible. And I would support that line of thinking."

The Progressive Conservatives have vowed to eliminate within four yearsthe $747-million deficit left behind by the former Liberal government.

Higgs saidthe deficit is likely larger than anticipated by the former Liberal government.

Higgs's task is made more difficult by the fact the province's unemployment rate is close to 10 per cent and Standard and Poors, the bond rating firm, recently downgraded the province's economic outlook.

TheProgressive Conservatives, in power less than a month,have sent out mixed messages on how they will erase the deficit. Higgs said on Thursday that all government departments would be subject to a two per cent reduction in their budgets.

However, Higgs and Premier David Alward backtracked on that Friday, saying that the Department of Health would still see an increase in its budget, but it would be two per cent lower than it would have otherwise been.

The Department of Education has clamped down on out-of-province travel by teachers.

Redefinition ofgovernment

Savoie said during the election campaign that whatever party formed a government, itwould need to either increase taxes or slash government services in order to balance the budget.

The public administration expert said he still believes that the Tory government will be hard-pressed to implement its campaign platform without increasing taxes, particularly the Harmonized Sales Tax.

Even more pressure was added to the finance minister's budget battle when it was learned that two high schools in the province had to be shut down for the remainder of the school year because of health and safety concerns.

Education Minister Jody Carr then ordered a structural safety review of 229 schools, and it is unclear how much extra moneywould be needed to address any problems the review may find.

"I wish[Higgs] 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," Savoie writes.

"Redefining the role of government in society, however, takes public consultation and hence it cannot be achieved in short order."

Higgs said that he's "looking at everything" when it comes to fighting the deficit. However, the finance minister stressed that he is not looking at easing the deficit by raising taxes.

"We aren't looking at increasing taxes as in our platform. What we said in terms of no raising the [harmonized sales tax]," Higgs said.

"We are not focused on increasing revenues right now. We are focused on the cutting of wasteful spending."

The finance minister said he plans the cuts to be completed in an incremental fashion.

The Progressive Conservative government has promised to start the pre-budget consultation processon Nov. 22.

During that consultation process, Savoie is also recommending the provincial government consider selling off some government assets as a way to tackle the province's debt.

"[Higgs] 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," Savoie writes.

Daniel Allain, the Tory campaign co-president who was recentlyappointed as the new chief executive officer of NB Liquor, has already floated the idea of selling the provincial alcohol agency.

Savoie said the finance minister must be creative and consultative as he wrestles down the province's debt and deficit.

"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," he writes.