Finance Minister Jeannot Volpe has introduced a balanced budget with no new taxes, a tax cut for small business and roughly $200 million in new spending on health care and education.

Finance Minister
Jeannot Volpé

By preventing people from creeping into higher tax brackets, Volpe says someone earning $15,000 a year will save $15, while someone earning $50,000 will save $50.

"The tax reductions have helped make New Brunswick more attractive to business investment and job creation," the finance minister said Wednesday afternoon.

"More people working means increased incomes. Our pro-growth strategy is producing results."

• Province of New Brunswick : Budget 2005

Volpe says New Brunswick will continue to have the lowest individual tax rate east of Ontario, while the rate for small business, currently the lowest in the country, will be lowered by another one per cent by July of 2007.

In health care, the province will spend $2.3 billion in the coming year, an increase of $163 million.

The finance minister says $2 million of that will be directed toward a new program to encourage children to eat healthier foods, exercise more and avoid smoking.

He says the province will also spend more to attract doctors and nurses to the province, though he offered no further details.

Spending on education will increase by more than $38 million, or 3.3 per cent. Volpe says that includes money to hire 85 more teachers, as was announced earlier this month.

New Brunswick's welfare rates, among the lowest in Canada, will be increased for the first time since 1997.

But the increases will be small.

This year's budget projects a surplus of $98.9 million.
Four million dollars will reduce the province's net debt.

Where the Money Comes From

Projected revenue is expected to be $6.109 billion during the year.

Where the Money Goes

The N.B. government expects gross expenditures of $6.105 billion during the year.

Source: Government of New Brunswick - Highlights 2005-2006

Volpe says the social assistance rates will go up a total of six per cent over the next three years. When fully implemented, that will boost the annual income for a single parent with two children by $624 a year.

The two per cent increase scheduled for this year will amount to an increase of $16 a month for the same family.

Volpe said it was better than no increase, but he admitted it wasn't much.

"We still believe the best solution is finding a job. And we know that is a big challenge and we won't solve this problem over night. And so for now we are raising the rate," he said.

The budget will also give a small break to the working poor.

As part of the plan to index tax brackets to the rate of inflation, more New Brunswickers won't have to pay any provincial income taxes at all.

Individuals who earn less than $12,713 will not be taxed on their wages.

And one-income families with earnings of less than $20,324 will also be tax-free.

However, the finance minister chastised the federal government for not keeping pace with these exceptions.

He says an individual earning $12,713 in New Brunswick this year will still be hit with $730 in federal income taxes.

Total revenues in the new budget will be just over $6.1 billion, an increase of 2.9 per cent over last year.

Based on current projections, Volpe says there will be a surplus of $98.9 million, with a reducton in the net debt of $4 million.

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