Makedonia Koutsoumpeli’s story in last week’s edition of The Aquinian is a compelling account of how ordinary Greeks are reacting to their devastating economic crisis – read it if you haven’t.
But Koutsoumpeli also examined a crucial question: Could what’s happening in Greece happen here in New Brunswick?
The short answer is no, since the federal government would have to bail the province out in case of default. The long answer, as Koutsoumpeli alluded to, is no, but something close could.
The reality is New Brunswick, in many ways, is as vulnerable to a hard economic fall as Greece was in 2007. The provincial debt is $9.48 billion and growing. The finance department recently revised its deficit projections $65.5 million higher, to $514 million, threatening plans to balance the budget by 2014.
The cost of health care, the most expensive government service, is supposed to rise a “restrained” three per cent a year, but an aging population and the steadily rising drug and labour costs may make that restraint a Homeric task.
School enrolment is steadily decreasing across the province but, with education becoming ever more important for future success and many schools are in need of serious repair, the province is under pressure not to cut its second most expensive department.
Public pension funds, still not fully recovered from the 2008 stock market bust, are about to be hit by a tidal wave of civil service retirements, forcing the province to dip deeper into its purse to cover guaranteed benefits.
Provincial coffers took a devastating hit from the literal half-job of tax reform made by Shawn Graham’s Liberal government in 2009.
It controversially lowered income taxes for the middle class, the wealthy and corporations while never increasing the HST, recommended by the government’s own taxation committee as essential to maintain revenue.
David Alward’s current Progressive Conservative government is aggravating the problem by refusing to raise any taxes, except on the super-rich (of which New Brunswick has very few).
Federal health transfers must be renegotiated before 2014. The federal government and more prosperous provinces want to reduce equalization payments.
Consequently, the feds seem poised to give New Brunswick less money over the next four years.
No other provincial economy is more dependant on exports to the U.S., than New Brunswick meaning no other province is more vulnerable to a “double-dip” American recession. Aside from petroleum exports from the Irving’s Saint John refinery, those exports are flat to falling.
Wood and paper mills, the major employers in dozens of small New Brunswick towns, are dropping like flies. Unemployment rates are alarmingly high among the young and in rural areas.
And all this doesn’t even touch infrastructure, welfare, ailing municipalities or NB Power.
It’s possible, however, to keep this rosy picture of a province falling into the political and economic Hades the Greeks find themselves in.
It starts with us.
Not just the “us” of St. Thomas, the “us” of students or the “us” of young people. Every single one of us as New Brunswickers have to adjust their expectations of government.
I say this because the vast majority of us want cuts to government, tax increases or other novel ways of raising funds unless it affects them. Cut health expenses, but not to my hospital. Raise taxes on everybody making more money than me. Cut expenses by reducing services in the official language I don’t speak.
Unless we realize that if we want public services we have to pay for them, one need not be a Delphi oracle to see we’ll suffer much the same fate as Greece.
Where’s the deus ex machina when you need it?
Sean Thompson is a fourth-year student studying history at St. Thomas University. His Political Animal column appears bi-weekly in the Aquinian and online at theAQ.net.