New Brunswick barrelling toward bankruptcy, analyst warns
Richard Saillant says government needs to rein in spending, increase taxes, develop natural resources
A public policy analyst is warning that New Brunswick is barrelling toward bankruptcy unless it reins in spending, increases taxes and develops its natural resources.
Richard Saillant, of Moncton, director general of the Canadian Institute for Research on Public Policy and Public Administration, urges the provincial government to make immediate changes to its economic policies in his new book, Over the Cliff?
Time to rebound is running out, said Saillant, a former vice-president of the Université de Moncton.
The province's net debt currently stands at about $11 billion and could jump to about $62 billion by 2035, he said.
One major problem is the province's aging of the population, compared to the rest of the country, he told CBC News on Tuesday, following the release of his book in Fredericton.
"Median New Brunswicker right now is about 44 years old. Twenty-five years ago, the median New Brunswicker was like 24 years old.
"Whereas 20 years from now, it will be golden age, while the median Canadian will only be the same age as the current New Brunswicker."
Saillant says that's a recipe for financial disaster.
An older population means more money will be required for health care and care for the elderly, he said.
In addition, there will be fewer people in the work force, leading to a weaker economy, Saillant said.
"In my book, I say about three-quarters of its long-term growth rate is going to be lost just because population is aging so fast."
Finance Minister Blaine Higgs has projected the net debt will grow by by more than $530 million next year, pushing it to $12.2 billion.
It will be 2017-18 before the province finishes a year in the black, he has said.
New Brunswick has the second highest net debt per capita in the country, according to Auditor General Kim MacPherson's 2012-13 report. In essence, it would require every New Brunswicker to pay $14,623 to pay off the net debt, which is less than $100 shy of the net debt per capita in Nova Scotia.
MacPherson has called for "significant changes to improve the financial health" of the province, calling the rapid growth of net debt "very concerning."