The HST is going up two points — to 15 per cent — and income tax for individuals making more than $125,000 will go up over the next few years.
The official name of the budget was “Balancing Choices for a Promising Future” and Wiseman did his best to put lipstick on the pig.
“We have built a rock-solid foundation sturdy enough to sustain growth for generations to come,” he declared in his budget speech.
Oil prices have fallen dramatically in the past year, and the government is expecting $1.1 billion less compared to what was forecast this time last year.
The government is now expecting deficits through to 2019, as the economy stagnates and the government experiences a prolonged period of job losses.
In a graph in the budget documents, the government acknowledges that the Progressive Conservatives will be responsible for $6.95 billion in government borrowing between 2004 and 2020, compared to $6.78 billion under the Liberals between 1987 and 2003.
In the budget lockup, journalists were given a 25-page document detailing dozens of fee increases — everything from court documents to parking and admission at The Rooms.
In terms of government revenue, the biggest change is a $20 increase in motor vehicle registration — from $140 to $160.
In fact, the government’s own documents show the economy was shrinking last year, and will continue to decline for the next four years. Similarly, the province is forecasting steady job losses until 2019.
Finance officials said a lot of that is driven by Hebron and Muskrat Falls scaling down activity as those megaprojects finish up.
The government is cutting back on infrastructure spending — delaying indefinitely several big-ticket projects — and there are plans for a “renewed approach to fiscal management.” But there are no big program spending cuts evident in the government’s plan.
For the most part, Wiseman appears to be counting on oil prices slowly rebounding — from $62 this year, climbing to $90 by 2020 — and in the meantime, the government will muddle through with higher taxes and big deficits.
Full-day kindergarten is still planned, the post-secondary tuition freeze will continue, the government will reinstate and expand the family violence intervention court, and prisoners at Her Majesty’s Penitentiary will get new uniforms.
Wiseman said this is all about protecting the economy — which already appears to be in the midst of a prolonged recession.
“We’re looking at this in 10 years, 15, 25. We’re looking at future generations, so we’ve got to be careful here now,” Wiseman said. “The worst thing we can do is overreact to where we are and start pushing panic buttons and find ourselves destabilizing the economy.”
In the lobby of Confederation Building, most political commentators found something to dislike in the budget.
Anti-poverty advocates didn’t like that the HST increase will impose an extra tax burden on poor people until next year when they get their tax rebate, and business groups just generally didn’t like the fact that taxes are going up.
Wiseman opted to skip out on the tradition of a finance minister buying new shoes for the budget. He said given the province’s fiscal position, he opted to make do with a pair he already owned.