Blaine Higgs raises referendum on HST hike, road tolls

Finance Minister Blaine Higgs is again raising the possibility of asking New Brunswickers to vote on whether to increase the harmonized sales tax and impose highway tolls as ways to reduce the budget deficit.

The finance minister is touring the province, asking citizens to weigh in on how he should craft his third provincial budget.

The province’s projected deficit is $356 million, almost double the amount Higgs projected last March.

The finance minister, who is slated to hold a public meeting in Moncton on Monday night, says the fiscal situation is not turning around quickly for the province.

Higgs has raised the possibility of imposing highway tolls and raising the HST by two percentage points in the past, but those ideas have never made it into one of his budgets.

'Politicians react to public opinion.' —Finance Minister Blaine Higgs

Higgs said in an interview with CBC News on Monday he's been hearing both ideas during his pre-budget consultations.

But the provincial government would need a clear indication of public support for the idea.

"The referendum on both HST and tolls, that will be a clear indication of whether the public is ready or not," the finance minister said.

Raising the HST by two percentage points would increase provincial revenue by approximately $250 million.

No support for cuts

After two years of talking about reducing government spending, Higgs says there isn't public support for the additional cuts he would need to make to balance the budget.

So he's now looking for more revenue and is suggesting New Brunswickers will get a say on two of the most lucrative options.

The Alward government has often dismissed the idea of a sales tax hike or road tolls.

 "We will not raise the HST," Premier David Alward had said early in his mandate. "My last option is to raise taxes in New Brunswick."

But Higgs now says he and the premier are not ruling out the idea.

The law requires that a referendum be held on either an HST increase or tolls.

'We need to address revenue'

"Although it's very clear about the referendum requirements, and I've always understood that, we're certainly on the same wavelength that we need to address revenue, and that is one of the options," Higgs said.

The minister said addressing the "fiscal climate doesn’t always make the top priority of many people’s agendas." Before the provincial government would move forward with a referendum, he would need support both internally from the government and externally from the public.

"Politicians react to public opinion," he said.

Higgs said he'll announce when the Alward government will be able to balance the province's budget when he hands down his budget in March.

The premier had promised his government would balance the province's budget before the Progressive Conservative's first term ends in two years.

But Higgs said last week in Saint John that the provincial government would not hit its target of balancing the budget in 2014.

At this point, he can't set a new date, he said.

"I won't make a projection on what we think the timeline will be until we've completed the next two months. And in the budget speech at the end of March I will be making a projection of when we will reach a balanced budget."