Spend surplus dollars on immediate financial relief, economist says

·3 min read
Economist Richard Saillant says province needs to help New Brunswickers immediately with cash-in-hand solutions. (Jacques Poitras/CBC - image credit)
Economist Richard Saillant says province needs to help New Brunswickers immediately with cash-in-hand solutions. (Jacques Poitras/CBC - image credit)

Part of the province's projected $135.5 million surplus should go toward immediate help for people struggling with inflation, according to a Moncton economist and public policy consultant.

Richard Saillant said if higher prices are bringing the province more money, those dollars should go to the people who are struggling to pay their bills.

"The big priority right now should be dealing with the pressures of a rising cost of living, which disproportionately affects the relatively low income people," Saillant told Information Morning in the Summer.

On Tuesday, the Higgs government said an increase in sales tax revenue is one factor behind the surplus.

Finance Minister Steeves has said the provincial cabinet is looking at the possibility of tax cuts, but did not reveal further details.

But enacting tax cuts takes time, said Saillant, and relief is needed immediately.

"Tax cut won't solve the current crisis we're living … It's not much immediate relief for people facing major, major pressure in terms of adjusting to a rising cost of living."

Ed Hunter/CBC News
Ed Hunter/CBC News

This summer, the province provided emergency inflation relief cheques for people who are already receiving low income or housing benefits from the Department of Social Development.

But the one-time $225 for individuals and $450 for families, including seniors, was a drop in the bucket, according to anti-poverty advocates.

Janelle LeBlanc works with the Common Front for Social Justice, a provincial anti-poverty organization. She said she has heard frustration and anger from the people she represents when they hear news of this surplus.

"They just get a bit upset and disappointed because they would like for that money to come back to the people, to the communities, because people are struggling, communities are struggling, health care is struggling," she said.

LeBlanc said the province needs to strike a balance between immediate relief and long-term changes such as increasing the minimum wage.

While the finance minister has said it would be irresponsible for the province to make changes based on the assumption this surplus will continue in the coming years, LeBlanc said there other avenues for funding if the coming years aren't as lucrative.

"To improve working conditions for everyone to increase minimum wage, we can increase taxes on big corporations by a couple percentages and we would be fine," she said.

Saillant agrees with the advocates and said the province should also recognize rising prices will likely not drop for a while.

"We're increasingly [seeing] people paying large city prices on smaller town wages. So I think we need to revisit our social policy to reflect the fact that a lot of people in New Brunswick are hurting these days," he said.

What about paying down debt?

Green Party MLA Kevin Arseneau represents people in largely rural Kent North, which includes Rexton, Richibucto, Rogersville and Saint-Louis-de-Kent. He said even constituents with full-time jobs are struggling and come to his office requesting help "daily."

Radio-Canada
Radio-Canada

He said he hasn't heard the province even hint about where the surplus would go. However, the premier has said the priority is to pay down provincial debt.

Arseneau said this is misguided, because provincial debt shouldn't be treated like household debt, where you must pay it off to be financially stable.

He said the priority should always be the people.

"The capacity of a province to borrow money to make sure that everyone is doing well right now, I think, is going to go a lot farther if we attack poverty and precarious situations," he said.

Saillant said it's possible to spend money on the province's social health and still incrementally pay off the debt.

"There's no point in being fixated on a debt-to-GDP ratio that's declining when you're already in the strong position and your population is hurting."