N.B. slashes $42.9M from budget

The New Brunswick government is suspending incentives to health professionals and planning to limit the number of elective surgeries in a new wave of fiscal austerity measures, Finance Minister Blaine Higgs said on Thursday.

The Progressive Conservatives announced last fall the deficit could hit $820-million in 2010-11 and warned that New Brunswick was facing a "fiscal crisis."

Higgs told reporters on Thursday the Department of Finance has approved more than 100 different cuts that will reduce the projected deficit by $42.9 million. That is still about $32-million short of the $75-million in savings the Tories said they would find in their election platform.

"This was a way of helping to reverse a culture of spending in government," Higgs said in a statement.

"The savings that have and will be accomplished are an important tool in getting our finances back on track, but we will be looking at many more options to help in this endeavour in the months ahead."

The Department of Health has "made a commitment" to reduce $8.4 million by cutting spending in its central office and the regional health authorities.

For instance, the provincial government is suspending all subsidies and other incentives to doctors, nurse practitioners and other health professionals until April 1.

The Health Department will reduce costs to the prescription drug program by changing "a limited number of drug benefits."

'There are some daunting challenges ahead, and the only way we will achieve success and put our fiscal house in order is for all of us to be working together.' — Finance Minister Blaine Higgs

As well, the New Brunswick Medical Society and the Health Department will identify some elective services that could be taken off the list of services paid for by the government.

The Department of Social Development will save $9.8 million in the budget by deferring grants paid by the Energy Efficiency Retrofit Program, trimming the cash available for nursing home replacement and reducing the money available for public housing maintenance.

The Department of Education will cut $9.9 million by halting spending on a variety of measures.

Across the provincial government, Higgs said, money is being saved by eliminating non-essential travel, reducing the amount paid on external consultants and cutting non-essential budgets for training and professional development.

Liberal MLA Donald Arseneault, the Opposition's finance critic, said he understands the government's need to curtail spending but that the Tories are attacking budgets in sensitive areas.

"That's why it is a question of priorities," Arseneault told reporters on Thursday.

"We want to make sure that the key portfolios, the key sectors that are close to the people in New Brunswick, we have got to protect those and find efficiencies in other areas."

The Liberals are concerned by the government's decision to trim the budgets for the departments of health, education and social development.

Arseneault said the decision to suspend the incentives for doctors and other health professionals could hurt recruitment.

"If we're having a hard time recruiting doctors and nurses today, if you are taking all those incentive programs out, we are going to fall further and further behind, because it is a very competitive field out there," he said.

The Tories promised in their election platform that any spending reductions would protect spending "on priority programs in health, education and services to those in need." 

"During the campaign, they made it sound almost like there was a Department of Frivolity and Excess that they would be able to come in and just eliminate, and that would take care of everything," reporter Robert Jones told CBC News. "It's much more complicated than that." 

Besides the health sector cuts, there are also cuts to low-income housing, early childhood development programs for low-income children, child protection services and student aid.

Pre-budget tour

The list of budget cuts was released on the same day that Higgs announced he would commence a 10-community pre-budget tour next week.

Higgs invited citizens to send in their proposed cutbacks to the Department of Finance last fall.

The government's pre-budget consultation process began with an online questionnaire that received more than 1,100 responses with 2,600 individual comments. People can continue to respond to the questionnaire until Feb. 2.

"There are some daunting challenges ahead and the only way we will achieve success and put our fiscal house in order is for all of us to be working together," Higgs said in a statement.

The Progressive Conservatives will table their first full budget on March 22.

The pre-budget tour will start on Jan. 17 in Saint John and end on Feb. 2 in Woodstock.

Higgs's first attempt to wrestle down the looming deficit was made in December when he unveiled the Progressive Conservative government's capital budget.

Higgs revealed a $592.9-million capital budget, down from the $940.4 million spent by the former Liberal government in 2010-11.