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A nod was made to spending restraint: as teachers retire, fewer will be hired to replace them. The civil service will be reorganized to operate with fewer bodies and middle managers reduced by 30 per cent through attrition. A government-owned golf course and a fishing lodge will be privatized and some tourist offices closed. Melanson argued that the HST increase and corporate tax hike, to 14 per cent, were needed to avoid “deep cuts in education and health care.” But returning the HST to the 2006 level will produce, at best, $300 million in revenue, while further depressing economic growth on which those programs ultimately depend.

What the budget’s authors fail to recognize is that its current malaise results from just the sort of counterproductive practices it is now expanding. A corporate rate of 14 per cent will hardy entice businesses away from Ontario or Alberta, where the rate is lower. Entrepreneurs are also unlikely to be attracted by one of the country’s highest marginal personal tax rates. High-income earners are so heavily taxed now that the government was forced to cancel its own top rate to allow for the federal Liberals’ pledge to increase taxes on the rich. At 53 per cent, it will still be neck-and-neck with Nova Scotia as the highest in the country.

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A quarter of a century ago, Saskatchewan’s socialist premier Roy Romanow argued, “We can’t afford any sacred cows or we risk losing the entire herd.” But Romanow protected the herd by balancing budgets and keeping a close eye on spending, even when it irked his own caucus and NDP ideology. Too many of his successors across the country have failed to follow his example, running up debt and dreaming up ever-more ingenious ways to extract revenue from taxpayers. The federal Liberals’ plan to borrow and spend to boost the economy further validates bad habits that were already too ingrained.

New Brunswick has one of Canada’s most challenged economies. It got that way by consistently avoiding tough decisions to deal with hard realities. Other jurisdictions should examine its predicament and learn the lessons.

National Post