Budget punts decisions on major health, senior care issues

For all the talk of today's budget being the decisive document of the Gallant government's first mandate, it still features the punting of several major issues.

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Raising the Harmonized Sales Tax will cause immediate political headaches, and there are other measures that will provoke backlashes.

But on one of the major policy dilemmas facing the province — how to pay for the rising cost of caring for an aging population — the Liberals have decided to make no decision, at least for now.

There's no embrace, for example, of the Horizon Health suggestion to transform some smaller hospitals into facilities for caring for seniors as a way to address demands for nursing home spaces.

"A number of proposals were raised with respect to senior care and nursing homes, which could have realized efficiencies for government," Finance Minister Roger Melanson said in his budget speech.

"However, instead of introducing any of these potential measures today, our government is deferring any decisions in these areas until the completion of the work of the Council on Aging."

More consultation

That council, another consultation mechanism from a government that has already consulted extensively, will be appointed in the coming days.

The Liberals are also promising more talk on health with the province's doctors to "develop an enhanced, community–based, primary health care service," another major shift put off for another day.

Melanson says the budget isn't a recipe for inaction on health costs.

He told reporters that by starting "conversations," the Liberals are taking an initial step that will lead to reforms.

"We are advancing the idea where we could have more community–based care, more home care," he said.

And Health Minister Victor Boudreau said his department's average annual budget increase over the last five years has been less than one per cent.

"There has been a lot done," he said.

Ferry not replaced

In place of fundamental decisions on senior care and primary care, the Liberals instead opted for a range of small measures that they can defend as attacking waste and inefficiency.

Two examples are the centralization of Service New Brunswick call centres and of land registry offices.

Some measures will hit hard, though the effect will be localized. The Gagetown ferry will not be replaced, angering one part of one constituency.

Senior and middle managers in the civil service will be cut, but the latter part, which amounts to 1,300 people, will be spread over five years and done mainly as people retire or leave.

Other political risks to the Liberals have also been kicked down the road.

The $150 million annual contingency fund, promised by the Liberals in the 2014 campaign as a cushion against unexpected costs or revenue shortfalls, will be reduced to $100 million in the coming year, then drop by another $25 million each year until it vanishes completely in 2020–21.

Officials say it's because as the deficit goes down, the margin for error goes down, as well.

But the contingency cushion has also been a political loser for the Liberals, forcing them to forecast a $466 million deficit for 2015–16, for example, instead of a better looking $316 million deficit, if the cushion isn't needed.

Even so, the arguments for a cushion remain: the economy can crash unexpectedly, or tax remittances from Ottawa can come in far below projections. If that happens when the cushion is smaller, or gone altogether, the deficit figure will soar.

Surplus much smaller

Another long–term number is notable: while the Liberals say they're still on track to run a surplus in 2020–21, as they promised in the election, it's now forecast to be a much smaller surplus.

The Liberal campaign platform said the first surplus would be $68.5 million, but now the target is a mere $21 million.

That means a lower payment on the cumulative debt — and the Liberals have spoken repeatedly about the need to get that debt down to lower debt–servicing costs.

The final big punt in the budget is a collection of vaguely described measures that won't get as much attention as the HST, but that could have huge impacts on the daily lives of New Brunswickers.

'Optimizing' bus routes

One is described as the introduction of "reasonable, clinically sound parameters" for social development programs that provide a range of health services to low–income New Brunswickers.

While officials say it's an effort to standardize programs, the budget speech describes it as "dollar maximums and frequency limits," a cap on programs for the most needy that could return to haunt the Liberals.

Another is "optimizing" school bus routes, a change that Melanson acknowledges in the speech, "may be difficult."

The government will also do more to encourage municipal mergers, including "favouring viable communities through infrastructure funding programs," in other words, cash incentives for smaller communities to merge into larger ones — always a contentious debate.

It will also change the rules for binding arbitration in labour negotiations, aiming to force arbitrators to choose one side's proposal or the other, with no ability to pick a wage increase number in the middle.

The goal will be to deter unions from seeking large wage increases in the hopes an arbitrator will pick a smaller, but still sizeable, figure.

These are measures that aren't as visible as an HST increase, but are designed in the long term to rein in costs in ways that New Brunswickers may not notice for months or years.