N.B.'s hard cuts to come: finance minister

New Brunswick's finance minister is cutting spending by $220 million in the upcoming fiscal year, but says he's putting off many of the difficult cuts for at least another year.

Finance Minister Blaine Higgs, who announced the provincial budget Tuesday, said turning around such massive spending can't be done in one year and it has to be properly researched and analyzed first.

"There's lots of places to continue to look, so it's not over," Higgs said.

Higgs said many small schools in the province are only 60 per cent full and in the coming year he'll look at whether he needs to close some of them.

He also said funding for senior care is "unsustainable."

"Yes, there are definitely tougher decisions to follow, because we still have a long way to go," he said.

The PC government also put off some spending promises from last year's election such as more daycare spaces and a new economic development fund for northern New Brunswick.

This will mean pressure to both cut more and spend more in next year's budget, one year closer to the next election.

Kevin Lacey, Atlantic Canada director of the Canadian Taxpayers Federation, said this should have been the year for those tough spending cuts.

"The awareness is high," said Lacey. "This was the time for the government to really address the overspending in government, and that's what frustrates us."

However, Lacey said he is pleased with some parts of yesterday's budget, including cuts to the civil service and keeping the HST rate steady.

While Tuesday's budget may not have been as tough as many expected, many New Brunswickers will feel the impact right away with increases in the price of gas and cigarettes.

The Progressive Conservatives hope they will raise about $100 million in taxes on these products.

Smoke shop owner Kenny Khan worries the $10.50 increase on a carton of cigarettes will drive customers underground.

"It will definitely motivate contraband smokers to hit the road again," he said. "Every time there's a big tobacco raise, contraband always takes a big wave and takes over the market for the next so many months."

But most New Brunswickers will feel the first pinch at the gas pump.

The tax increase with HST amounts to more than three cents a litre.

Higher gas prices could drive up the cost of many services.

Lacey said the province's budget is going to "nickle and dime" New Brunswickers when they pay at the pumps.

"For every car you own, you'll pay another $85 dollars a year in gas tax," he said. "Ultimately I think taxpayers, when they see that the debt is not going down, but they're forced to pay more, I'm not sure that that's the right direction for the government to go in."

The increase in the fuel tax is not the answer, said Art Jones, who owns the independent company Road Wolf Trucking in Riverview.

"It's going to affect me significantly," he said. "I'm looking at an additional expense of $60 or $70 per week more for one truck. Definitely it's an unfair burden placed on one segment of the population. A commercial vehicle pays every mile that it rolls in every province, every territory, every state, it pays fuel tax."

Although Nancy Whipp, CEO of Greater Moncton's Chamber of Commerce, said she's pleased the province is working towards a balanced budget within four years, she's concerned about the increase in the fuel tax.

Whipp said an overall increase in the HST would have been more beneficial.

"Having three of the largest 10 businesses in the trucking industry in Canada, it will clearly affect the region and our concern is that this cost will get passed on to consumers in all the commodities that they purchase," Whipp said.

The finance minister is also hinting at a highway toll.