Liberals drumming up support for HST hike, critics charge

The Gallant government's pre-budget blitz of 10 New Brunswick community meetings has been an attempt to build support for a financial plan that will likely depart in significant ways from the blueprint Liberals put to voters 16 months ago.

And critics charge government has been exaggerating the size of the province's financial problems to justify the flip flop

"It's time to face facts," says an online government promotional video that directs the public to an information package called Choices, which has been guiding discussions at public meetings being run by senior cabinet minister Victor Boudreau across New Brunswick.

The meetings are focussed on the province's deficit problem and a list of possible solutions, with discussions increasingly zeroing in on raising the HST.

But the Choices document exaggerates the current size of the deficit and disguises the fact it has shrunk significantly over the past two years.

Critics contend that is no mistake.

"It's obviously to generate support for drastic action," said Progressive Conservative MLA and former finance minister Blaine Higgs.

"You convince the public, 'Look, we've got this problem, so we need the HST.'"

In describing "the current situation" in its Choices document the government depicts a deficit that is high and not responding to normal government restraint.

"The deficit at the end of the 2013–2014 fiscal year was $498.7 million," it states.

"The deficit currently stands at $453 million for the second quarter of 2015–2016."

That suggests the deficit has fallen by only $45.7 million in the last two years. In fact, it has decreased by $297.3 million — more than six times as much.

Neither deficit number quoted in the Choices document is correct. The 2013-14 deficit was actually $600.4 million, according to the province's latest audited financial statements, which were available before the Choices document was released.

It's a classic tale of politicians doing one thing in elections and then doing something else when they get in to govern.- Kevin Lacey, Canadian Taxpayers Federation

Similarly, the current deficit is running at $303.1 million. 

The Choices document inflates that to $453.1 million by adding in the $150 million "contingency fund" that is not actually budgeted to be spent or expected to add a penny to the debt this year.

"Adding that ($150-million) contingency makes the deficit look worse, and as a result, requires more urgency of action in regard to raising people's taxes," said Kevin Lacey, of the Canadian Taxpayers Federation, who has accused the Liberals of trying to whip up public support for raising the HST.

"It's a classic tale of politicians doing one thing in elections and then doing something else when they get in to govern."

No mention of HST hike during election

Liberals put forward a six-year plan during the 2014 election to fix the deficit, which did not include raising the HST.

Instead, it proposed to find $250 million from a "strategic review" it told voters would be aimed strictly at finding savings from inefficient government operations.

But after the election, Liberals changed the terms of the strategic review to find savings "and revenues." And in recent weeks, they have been talking up the idea of raising the HST.

At a pre-budget meeting in Fredericton on Tuesday evening, Public Safety Minister Stephen Horsman all but said an HST increase is now government's preferred option.

"It comes down to the critical choices — cuts to health care and education, or increasing HST," said Horsman as he read from a prepared text.

"Unless New Brunswickers tell us differently, health care and education will be protected," he said.

HST hike was always 'last resort'

Boudreau, who was also at the Fredericton meeting, says raising the HST will not break any promise, even though Liberals did not propose to raise the HST in the financial plan they showed voters and the deficit has improved since the election.

"The premier had always said that raising the HST would be a last resort," said Boudreau.

"It's not something he committed not to do, but we never committed to doing it either. He had said it would have to be a last resort."

Higgs says he believes raising the HST has been the plan all along and exaggerating the current size of the deficit is meant to get the public onside.

"It was an absolute methodical process to communicate in such a way that people develop a fear," said Higgs.

"I think they are just trying to, from the very beginning, have people say, 'Thank you very much for putting up the HST.'"

Pre-budget meetings continue in Grand Falls on Friday.

The provincial budget is expected on Feb. 2.