In a recent Mandate question asking if the government should give priority to deficit reduction or tax relief,the majority of you chose deficit reduction and that was the focus of the Canadian Federation of Independent Business’ 2020 pre-budget submission.
The Minister of Finance said taxes would not be going up in Budget 2020, so CFIB highlighted a number of initiatives to reduce government spending without harming core public services:
- Health care – Ways have been identified to save upwards of $600 million in health care while maintaining services and improving health outcomes.
- Public procurement – The provincial government can find efficiencies through effective procurement and ensure additional revenues if local companies are able to compete in the process.
- Oil equity – the provincial government’s focus should be on royalty revenue rather than holding equity in oil development projects.
- Tuition fees – Raising tuition can help the provincial government more sustainably reduce its contribution to Memorial University.
- Industry support – reducing industry support is unlikely to harm the provincial economy; government should not pick winners and losers.
- Government attrition – Attrition of the public sector does not appear to be working effectively, but implemented properly, it can contribute to lower spending.
The government’s debt is crowding out funding available for vital public services. With the fall in Brent crude oil prices, the provincial government will borrow to fill the revenue gap; increasing debt servicing payments. There is growing speculation of a provincial general election this spring and the provincial government is preparing for this with a bill to permit spending beyond the end of the fiscal year.
CFIB has asked for a budget or fiscal update in April. We believe Newfoundlanders and Labradorians, including small business owners, should know the fiscal state of the province in advance of any general election.