New Brunswick: Increasing reliance on consumption
For the fun of it, I had a look at GNB revenues by source over the weekend (don’t worry I also went to the Lameque Baroque Festival, Ballet by the Ocean, and floated on a tube on Cocagne Bay). The table below shows the changes in just the past four years. These numbers are taken from GNB Main Estimates. PIT is personal income tax and CIT is corporate income tax.
It is interesting to note the two biggest line item increases to government revenue were Equalization and HST. HST led the way with an increase of nearly $750 million in just four years. This is likely the impetus for the Tory promise to cut HST by 2 percentage points.
My biggest observation here is the rising dependence on consumption. There was a time not that long ago when GNB raised a lot more from PIT than HST. In 2001, GNB brought in $1.31 in PIT for every $1.00 in HST. Last year it was $1.03. I know there was a rate change in there but it still points to government reliance on consumption.
The increasing reliance on the Feds should be of some concern. Even the conditional grants when up by $280 million or 85%. Those are, by definition, conditional.
Of course mineral royalty revenue and related has disappeared from the books altogether. Not that long ago GNB raised at least a few bucks from mineral royalties (back when that sector was 6% of GDP).
The main reason I only went back four years is inflation. It is difficult to compare a period with high inflation to one with stable inflation but the relative differences are an important tell of how things are changing. Good to see CIT rising. GNB is still very reliant on property tax revenue even with several initiatives. Lost revenue from tobacco has not been made up for by cannabis revenue (cannabis duty and revenue was about $36 million in 2023).
All numbers shown in $000s.
