Robert Jones· CBC News· Posted: Dec 18, 2019 5:30 AM AT



New Brunswick Finance Minister Ernie Steeves welcomes the $187 million in extra equalization funding he will get from Ottawa for his budget next year, but is unhappy his province needs more assistance than any other province. (CBC)


New Brunswick has officially assumed the title of Canada's poorest province and will begin receiving the most funding per capita from the federal government's equalization support program, starting in April.

The bottom ranking and the poor economic numbers that caused it are unlocking significant new federal financial support for New Brunswick, but that is cold comfort for ending the longtime reign of Prince Edward Island as Canada's neediest province, according to New Brunswick Finance Minister Ernie Steeves.

"Wow. That's tough to take," said Steeves in an interview Tuesday.

"When your transfer payments go up, it's a sign your economy is weak. I'm not crazy about that. We want New Brunswick to be a have province, not a have-not province."


Federal Finance Minister Bill Morneau met with provincial ministers and finance officials this week. His department released figures showing New Brunswick would receive the highest per-capita amount of equalization payments next year, replacing P.E.I. as Canada's most have-not province. (Adrian Wyld/Canadian Press)


The federal Finance Department released figures late Monday of what equalization-receiving provinces will qualify for in funding next year.

New Brunswick's share is jumping 9.2 per cent to $2.21 billion, the largest increase among receiving provinces.

A sign of the times

The new amount is calculated by Ottawa to be worth $2,826 per person in New Brunswick, the most ever paid to a province, and a razor-thin $1 per person more than P.E.I. will receive.

It's a remarkable turnaround for both provinces. 
Last year, P.E.I. received $65 per person more in equalization than New Brunswick and, as recently as three years ago, was receiving $301 per person more — a sign of how quickly P.E.I.'s economy has closed in and, for its size, surpassed New Brunswick's.

Equalization is a $20.6-billion federal program designed to help poorer provinces provide comparable levels of service to citizens at similar levels of taxation to richer provinces.

Payments are determined by a complex mathematical formula that measures the revenue-generating ability of each province against a national standard. Those with a below average ability to raise money for themselves qualify for funding.


New Brunswick will receive a record $2.21 billion in equalization funding from Ottawa next year to pay for basic government services, like heath care and education, that it cannot afford to pay for on its own. Pictured is the Saint John Regional Hospital. (Wikipedia)


Quebec receives the most money from the program — $13.25 billion next year — but at $1,547 per person in Quebec, it's 45 per cent less than what New Brunswick will get.
Equalization amounts per person:

• New Brunswick: $2,826
• Prince Edward Island: $2,825
• Nova Scotia. $2,184
• Manitoba: $1,815
• Quebec: $1,547

The three territories do not receive equalization, but have a separate financing formula with the federal government.

New Brunswick hike 'stood out,' says prof

Trevor Tombe, an economics professor at the University of Calgary and one of Canada's leading experts on equalization, said the $187-million jump in New Brunswick's equalization allotment next year is remarkable, but the causes will take some time to analyze.

"The increase in New Brunswick is actually something that stood out," said Tombe. "lt'll be interesting to dig deeper to see what's driving that specific change."

The equalization formula uses three years of data and, according to Tombe, next year's payments are based on provincial economic performance recorded between April 2016 and March 2019.
New Brunswick's GDP growth over those three years was an estimated 3.7 per cent. That's the weakest among equalization-receiving provinces, less than the national average and well below the 10 per cent growth recorded in P.E.I..

New Brunswick has long vowed to get itself off equalization. In 2006, former premier Shawn Graham set a "self-sufficiency" goal to be free of equalization payments by 2026. Instead amounts owing to New Brunswick have grown by $900 million, including by $550 million in just the last three years.

Steeves said being a "have" province is still New Brunswick's goal even though, as Canada's poorest provincial jurisdiction now, the need for equalization is undeniable.

"We want to be the ones that help everybody else, but right now we do need the help," said Steeves.
"We're trying to get our debt back in place where it should be and get it lowered so that we won't need as much help. But right now we are reliant on Canada and Canadians."



 





Commenting is now closed for this story.




David Raymons Amos 
Surprise Surprise Surprise




















Terry Tibbs
Absolutely outstanding job you are doing for (on?) us Mr Higgs.
Make your moms proud.




















Justin Time
The size of Government and it's reckless spending habits need to be brought under control. We have a province with a population less than a lot of larger cities in the country yet we have a government bureaucracy so blotted and reckless with tax dollars that we will never climb out of debt if we continue on the current path. Doesn't matter which party is in power. There should be solid guarantees of return on investment for every dollar the province spends instead of throwing money at the wall and hoping some of it sticks.Giveaways to friends of the government and to companies that can well afford to spend their own money have to stop. Taxpayers are fed up with government waste and will continue to show dissatisfaction at the polls.The days of large majority governments are over until they start showing responsible fiscal management. Cynicism with government is at an all time high and with good reason.





















Mike Bookman
You can start by getting Irving to pay back the $40billion in taxes they stole from the province since 1972. That would be a good start.






















Lewis Taylor
I guess the Higgs "Do nothing" strategy is actually contributing to economic prosperity in a negative way. It proves that saying "NO" to everything does not improve the situation and actually worsens it because others keep moving past you. At least we are first in something...federal welfare handouts... which is probably why he was actually civil with the PM.


Steve Gordon 






















Greg Miller
So now the poorest province in Canada and we pay the second highest income taxes in Canada. Doesn't seem like the perfect "mix" to attract newcomers--for that matter why are WE here?






















Wally E. Bamberger
""The increase in New Brunswick is actually something that stood out," said Tombe. "lt'll be interesting to dig deeper to see what's driving that specific change."
... Should be very interesting ...
Pack up everybody in the Province and relocate us to the golden triangle somewhere between Toronto and Windsor might do the trick.
More realistic ... CP Rail's recent announcement of its intention to reclaim much of it's trackage between Montréal and Maine would look good on the Province's resumé.


David Raymons Amos 






















Ben Haroldson
Lets annex the U.S.


David Raymons Amos 




















Johnny Jakobs
When you need two of everything, this is the result.


Lewis Taylor













Edmund Bourque
What's the game plan here, folks? The only viable option looks like natural resource extraction...




















Sharon Caswell
Irving.


David Raymons Amos  






















Omer Samson
I know! NB could make everything it possibly can to bypass and alienate neighbouring Quebec! Has that strategy ever been tried before?


David Raymons Amos 

















Shawn McShane
The poorest province in the country yet we need to squeeze $100 Million more for pilfer meters.




Jeff Leblanc
And we have a former morning radio guy running our finances. Does CBC have a facepalm emoji?






Jeff Leblanc
Costs $85 million a year to provide bilingualism in NB. Might be time to scrap it and the rest of you learn the language. Marc Martin and Anne Berube you can post your rebuttal anytime now, can't