Liberals to shift throne speech focus to global economic malaise

The New Brunswick legislature is returning Tuesday for a new session that was supposed to be dominated by talk of tax reform, but that is being eclipsed by the global economic downturn.

New Brunswick has not been sheltered from the impact of the credit crisis that has choked off needed cash flow to many companies or from the bear market that has begun devouring the worth of many publicly traded companies.

Government house leader Michael Murphy said the Liberal government is closely watching the impact of the financial slowdown, recognizing the concern that many New Brunswickers have for the overall health of the economy.

"People have to take stock of what we can afford, and I think the opposition will be pounding on that, and we have to respond," Murphy said.

Lt.-Gov. Herménégilde Chiasson will deliver the Liberal government throne speech at 3:30 p.m. Tuesday, where he will outline Premier Shawn Graham's legislative agenda for the upcoming session.

The first signs of the province reacting to the financial pinch some companies are already feeling emerged on Monday. Business New Brunswick Minister Greg Byrne confirmed that four companies have already received loans or loan guarantees made necessary by the credit crunch and he said there are at least another 10 that are working their way through the system.

Conservative Leader David Alward, who will begin his first session as the Opposition leader, agrees the financial crisis will be everyone's top priority.

Tax reform plan

"Very, very importantly this session, the economy is certainly something that touches everyone. But there are many things that are tied to the economy," Alward said.

Alward said the Liberal government's tax reform plan and the cost of home heating are two issues that become more important during an economic downturn.

That tax reform agenda was supposed to be the priority topic in this session. A discussion paper was launched in June that called for a series of dramatic tax cuts to personal and corporate income tax.

An all-party committee of MLAs has been studying how to overhaul taxes, including one scenario that would see income tax go down and the harmonized sales tax increase.

Murphy said changes to the tax system may not be as controversial as some think.

"We have people that have gone out west to work, they're frequently back here, and they choose on occasion to file their taxes in Alberta where they pay less income tax," Murphy said. "So we're looking at a tax system that will make us more competitive on a national level, and I think that's something that will be good for all New Brunswickers."