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Denis Robichaud, Director of Provincial Affairs
In just a few weeks, Finance Minister Roger Melanson will table his second provincial budget. Small- and medium-sized business owners in New Brunswick understand the urgency to fix the province’s fiscal situation, yet they also understand that the only way the government will reach its goal of bringing New Brunswick’s budget back into the black is by showing serious spending restraint.
This is one of the main findings of a Canadian Federation of Independent Business (CFIB) pre-budget survey of its New Brunswick members in November. The results have recently been shared with the provincial government and opposition parties.
During its first year in office, the Gallant government has implemented some positive measures to help support the province’s small- and medium-sized enterprises (SMEs): the creation of the Youth Employment Fund; the enhancement of the Small Business Investor Tax Credit Program; and the creation (with Nova Scotia and Prince Edward Island) of the Joint Office of Regulatory and Service Effectiveness. These are promising examples of initiatives that should have a positive impact.
While CFIB supports the principles behind these measures, our survey shows that the provincial government has not yet succeeded in boosting confidence among small business owners.. In fact, when we ask them how they feel about the future of New Brunswick’s economy, almost three quarters of our members say they are “pessimistic.”
Furthermore, about eight out of 10 owners say they are not confident that the New Brunswick government is committed to improving the climate for small business in the province. When we asked members if they thought the government has done enough to reduce overall government spending, 86 per cent said no.
About 80 per cent of SME owners say the province should reduce the size of government in order to balance its books. A meager 12 per cent of owners believe the government should increase its revenues by raising provincial taxes. When asked about the provincial government’s performance in reducing the total tax burden on business, 70 per cent of owners said the Province has done a “poor” job.
Entrepreneurs are also vigorously opposed to fee increases and tax hikes. Personal income taxes, payroll taxes, property taxes, fuel and consumption taxes all add up to make the total tax burden the number one priority for many small business owners in the country, and New Brunswick is no exception. In a fragile economy, CFIB members believe the government needs to keep all taxation levels low, including the HST.
Small business owners also believe there needs to be a stronger focus on economic development. Entrepreneurs understand fostering economic growth is no simple task. What is clear, however, is that any initiative aimed at supporting economic development needs to include the small- and medium-sized business community. After all, SMEs represent the large majority of all firms in our province, employing more than half of all working New Brunswickers.
CFIB’s survey shows entrepreneurs recognize the need for more targeted support through local economic development agencies. They also feel that our education system should be devoting more time to entrepreneurship. Many owners emphasize the importance of creating a better support system for SMEs who want to develop or expand their export opportunities.
New Brunswick is already one of the most trade-active provinces in Canada with a majority of exports going to the United Sates. Both the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Trans-Pacific Partnership Agreement (TPP) will open doors for Canadian businesses. But contrary to the experience of larger firms, SMEs often don’t have the resources, time, and networks to develop a successful export strategy. Hence the importance of offering support, information and guidance.
CFIB also surveyed its New Brunswick members on two new offerings created to encourage economic development and support job creation in the province: Opportunities NB (ONB) and the NB Jobs Board. After eliminating Invest NB, a Crown Corporation created by the former government to develop investment opportunities and encourage job creation, the Gallant government launched ONB, another new Crown Corporation designed this time to be the “focal point for all New Brunswick’s economic development activities” and the “first point of contact for local and foreign businesses looking to grow, expand or locate.”
Our survey shows that more than half of entrepreneurs are not confident that ONB and the NB Jobs Board will succeed in creating conditions for more jobs in the province. Even worse, one in five small business owners still isn’t even aware of the existence of ONB. It’s clear the mandate and services offered by ONB haven’t been adequately communicated. In addition to recommending that ONB broadens its efforts to heighten awareness among small businesses, CFIB would like ONB to publish an annual detailed report based on solid performance indicators, such as the number of new investments, the number of jobs created, the return on taxpayer investment, and the impacts on SMEs.
We all agree New Brunswick is facing many challenges and everything seems to suggest the coming years won’t be any easier. But there’s still room for hope. Entrepreneurs in New Brunswick are very passionate about what they do. They also believe in the province’s potential for growth. While some of the decisions made by Premier Gallant and his team are positive for small businesses and could help New Brunswick become a more fertile ground for entrepreneurs, certain suggestions made during the Strategic Program Review process that are still “on the table” – such as tax and fee increases – could undermine those efforts and have negative impacts on New Brunswick’s main job creators.
As we get closer to budget day in New Brunswick, CFIB members are asking the provincial government to focus its efforts on a reduction of government spending. With many New Brunswickers and businesses struggling, going back to them for more tax dollars would be unfair without the government first doing its due diligence, prioritizing its spending, and trying to provide services as efficiently as possible.
Denis serves as Director of Provincial Affairs for New Brunswick and is responsible for representing the views of CFIB’s 5,000 members throughout the province. He is also responsible for the development and execution of CFIB’s lobbying and legislative affairs agenda.