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The other Atlantic provinces, steeped in deficits, face similar fiscal dilemmas. All have corporate income tax rates above Canada-wide and OECD levels. Apart from Newfoundland and Labrador, they have French-like top personal income tax rates, and are growing even less than Europe’s snail’s pace of 0.7 per cent.

Are the provinces doomed to a poor economic future or might another strategy succeed? A recent German academic publication on the Baltic Tigers, whose small populations resemble the Atlantic provinces, provides the clue. Estonia, Latvia and Lithuania have been enjoying strong economic growth since 2003 by pursuing different economic reforms.

When the three Baltic Tigers shook off their Communist tyranny two-and-a-half decades ago, they took on radical reforms including deregulation, privatization, trade liberalization, currency and inflation stabilization, balanced budgets and major tax and spending reforms. The Tigers not only shifted public spending towards infrastructure and education (Estonia now has one of the best education systems in the world), they also pursued tax reforms including a low-rate flat income tax. Estonia has been particularly successful in rooting out corruption.

The Tigers grew at outstanding rates, as much as 10 per cent from 2004–07. When the global financial crisis pulled the rug out from under them, they resumed the early 1990s radical reform strategy, closing down failing banks without compensating former owners and rejecting the advice of Keynesian economists to take on fiscal stimulus. They adopted austerity measures to limit budget deficits, tax reforms, privatizations and labour market deregulation. The Baltic Tigers recovered from their deep recession with small fiscal deficits and reasonable debt levels by 2014. Growth has returned to levels four times higher than Europe’s since 2011, at over four per cent.

I am sure the Atlantic provinces would much prefer growing at four per cent annually over their anemic performance. Rather than New Brunswick’s doomed high-tax, anti-development approach, the other three provinces should look at small jurisdictions like the Baltic Tigers that show that low taxes, regulatory reforms and smart public spending yield good results.

Jack M. Mintz is the President’s Fellow, University of Calgary’s School of Public Policy, and Scholar-in-Residence at Columbia Law School. He has been an adviser on tax policy to four past New Brunswick governments.