N.B. premier won't rule out tax hikes

New Brunswick Premier David Alward will not rule out an increase in some taxes to tackle the ballooning deficit.

Alward spoke with reporters on Wednesday after the first question period of the legislature's fall session. The Progressive Conservative premier reiterated his promise not to hike the harmonized sales tax.

When asked directly if his government would hike the gas tax, Alward stepped around the issue.

"Look, … what we've said is, we will not raise the HST," Alward said.

During the CBC election debate, Alward went beyond his party's campaign platform document when he said cancelling income tax cuts for high-income earners would be the only tax increase. 

"We will otherwise hold the line on taxes that affect ordinary New Brunswickers," Alward said during the debate.

Alward and his ministers have made clear, though, they consider the platform document their "contract."

'The last thing I want to see is raising taxes in New Brunswick, but right now, we're starting the budget process, and we'll have a dialogue with New Brunswickers.' — N.B. Premier David Alward

When pressed further by reporters Wednesday, he would not rule out increases in other taxes.

"The last thing I want to see is raising taxes in New Brunswick, but right now we're starting the budget process and we'll have a dialogue with New Brunswickers," the Tory premier said.

Alward promised during the fall election campaign the Tories would stabilize the province's finances "without raising taxes or reducing services."

The previous Liberal government cut the gas tax by 3.8 cents a litre after being elected in 2006.

That decision cost the New Brunswick government an estimated $41 million in annual revenue.

Finance Minister Blaine Higgs said in a speech on Monday the province's deficit is now more than $800 million. And he said the budget deficit could hit $1 billion next year if the provincial government did not take urgent action.

In his throne speech, delivered by Lt.-Gov. Graydon Nicholas Tuesday, Alward said the province was facing a "fiscal crisis."

Liberals wait

Interim Liberal Leader Victor Boudreau wouldn't say if he would support increasing the gasoline tax now to boost revenues.

"When we've seen their plan, then we'll be able to comment if there are areas where we think it should or shouldn't be done, or some adjustments can be made," Boudreau said.

Boudreau said Tuesday's throne speech only contained new spending measures and did not have any plan to tackle the annual budget deficit.

But Alward blamed the previous Liberal government for the financial problems his government faces.

The Liberals ran two massive deficits in their final two budgets as they poured billions into infrastructure programs to stimulate the economy when the economic situation worsened in 2008.

When Boudreau was finance minister, he announced an aggressive series of tax cuts for individuals and corporations.

Alward has already announced that he will stop the planned tax cut for individuals earning more than $118,000. Further, he will allow the corporate tax rate to fall to 10 per cent, but he will cancel the additional tax cut that was promised to New Brunswick's larger employers.

The Alward government has ordered government departments to trim their budgets by one per cent this year. And the finance minister has told departments to expect a two-per-cent cut in next year's budget.

Higgs is about to commence the annual pre-budget consultation tour.

He is asking New Brunswick residents to come up with solutions for escaping the fiscal crisis. Specifically, he has asked people to identify areas they would be willing to cut or taxes they'd be willing to increase to erase the deficit.