N.S. budget: token gestures or welcome first steps?

A headline on the website of Local Xpress, the excellent local news service maintained by locked-out Chronicle-Herald reporters, aptly described one aspect of the Nova Scotia government’s 2016 budget brought down last week. “N.S. Liberals release election-friendly budget.” Precipitously balanced, with bits of new spending sprinkled about, the budget can easily be boiled down for election campaign purposes. Just putting Stephen McNeil’s mug on the first fold of the eight-by-eleven Highlights document that was part of the budget package would give the Liberals a handy campaign leaflet.

With the media quickly losing interest in the budget, the challenge for the opposition was to show that despite the packaging, the budget represents a light sugar-coating of continued Liberal austerity. It could just as easily be called the “Drop in the Bucket” budget. There are three files in particular where the Liberals came up with token efforts where much more is needed:

  • Early learning
  • Disability supports
  • Income support

Budget documents billed Liberals initiatives in these areas as “Supporting Nova Scotians who need it most.” Indeed, the Liberals were so proud of their early learning initiative that they couldn’t wait for the budget – McNeil jumped the gun with an announcement at the Liberal annual meeting a few weeks ago.

Early learning

Admittedly, the $6.6 million increase in funding for early learning and child care looks impressive in percentage terms – about 10% – to be split three ways to improve wages, increase subsidies and support more kids with disabilities. However, that impression lasts only until you read the government’s own review of regulated child care, calling for long-overdue “structural, system-wide changes.” The issue that received the most attention from the review was wages. At an average of $12.84 an hour, they are the lowest in the country. The report listed other problems as well:

  • Nova Scotia is the only province without an early learning curriculum;
  • There are insufficient spaces, especially for infant care – in 2014 there were only enough regulated child care spaces to serve 25% of children;
  • There are not enough spaces or programming for children with special needs;
  • Cost of care is too high (average of $785 a month in Halifax);

In addition, subsidies for low income families are among the poorest in the country with qualifying families paying over $350 a month out of their own pockets, compared with around $100 a month in cities like St. John’s, Saint John and Charlottetown.

Here’s the kicker – the review emphasized the importance of the pre-school years to an individual’s future health, educational attainment and involvement in criminal activity. It quoted expert opinion that says by the time a child enters grade one the foundation for future success or failure has already been laid and that “even with extra supports and remediation programs in school, it is often too late to change the learning trajectories for many children.”

Over the last three years of restraint the Liberals have increased per pupil grants to the public school system by nearly 15%, partly in response to arguments from teachers and school boards that despite declining enrolment, more resources are needed to cope with the increasingly complex needs of the kids coming into the school system. Given the likely connection between that phenomenon and the province’s deficient early childhood education system the budget gesture looks, at best, many days late and quite a few dollars short. But then, the Liberals’ marquee campaign commitment to throw $65 million at the K-12 system clearly took political precedence over any concerted approach to dealing with some of the root causes of problems in the classroom.

Disability Supports

The attention to early learning is a legacy from the Dexter government. Following the Harper Conservatives’ cancellation in 2007 of the Martin government’s modest attempt at a national day care plan, the provincial NDP government picked up the pieces. It  increased the number of subsidized spaces and the daily subsidy rate and moved responsibility for the program to the education department, which spun its wheels for two years.

Transformation of the Disability Support Program is another initiative inherited from the NDP that has been bogged down since 2013. Following a lengthy consultation process the NDP produced the Roadmap – a ten-year plan to transition from institutional to community-based care for Nova Scotians with intellectual or physical disabilities or long-term mental illness.

The Liberals accepted the Roadmap but stalled at the starting line through their first two budgets. This year’s budget adds $3 million (less than a 1% increase) to create some progress. Most of the new money will go to transition an estimated 25 people from institutions to community-based care, making a small dent in the total number of Nova Scotians (550) still confined to institutions. It will do little or nothing to reduce a growing waiting list for community-based services, which the department acknowledges is the result of a lack of capacity.

As of last fall, the list stood at nearly 1,100, made up of 360 individuals receiving no services and more than 700 receiving DSP supports but needing a different option. To underline the issue, MLA Andrew Younger brought to the floor of the house the day after the budget was tabled the plight of the Jones family. A 22-year-old son has been receiving some help in the family home but has been waiting three years to receive the increased level of support he would receive in a group home. But there was nothing in the budget to directly help the Jones family, and at the rate the government is going there it will take many years before there is.

Income supports

Despite the modesty of their investments in the DSP the Liberals couldn’t resist patting themselves on the back. The DSP increase was mentioned in the budget speech and turned up in three other budget documents. But as an example of spin over substance, it was outdone by hyperbole over the $20 a month increase in the personal allowance for income assistance recipients. That move was hailed by the Premier and the minister of community services as “historic…the largest increase to social assistance (sic) ever.”

Neither bothered to mention that the increase was the first since 2013, nor that the shelter allowance remains frozen at 2006 levels. According to The Nova Scotia Advocate’s Robert Devet https://nsadvocate.org/ a single person on income assistance typically receives $617 per month, which includes personal allowance, a shelter allowance and two tax credits. And according to the NDP’s Marian Mancini, a single parent with a small child would get all of $932 a month after the increase, that money to cover rent, food, transportation, medication, all household bills and any other expenses. That’s about 60% below the poverty line defined using StatsCanada’s after-tax Low Income Measure.

For families with children who rely on income assistance the best news in the budget was not the token $20 a month but confirmation that the government will pass along the full benefit of the estimated $2,300 increase in federal child benefits when the federal government’s Canada Child Benefit comes into effect on July 1. Other recipients of the budget’s small change -preschoolers, people with disabilities and income assistance recipients without kids – can only hope that this year’s budget is less about politicking and more about addressing longstanding needs. But future prospects are cloudy.

What of the future?

Opposition members, especially the Conservatives, have cast doubt on the revenue numbers that the Liberals have forecast in aid of achieving their balanced budget. There’s good reason for skepticism. In December the fiscal update showed all major revenue sources were down from the April 2015 budget. For example, personal income tax revenue was supposed to be down $57 million from the 2015 budget forecast. But last week’s budget showed a $96 million upward swing, supposedly the result of new information received in January and February. Of course, the dire financial picture of last December was used to justify a two-year public sector wage freeze – a freeze that made possible both the balanced budget and the modest new spending.

So Liberal revenue projections must be approached with caution, and the budget’s spending forecasts also raise red flags. Overall spending is projected to increase by just 1.9% this year and health, which consumes about 40% of the provincial budget, is given no increase at all. Even with wage restraint, zero growth in health spending in the face of an aging population seems unrealistic. Moreover, federal health transfers are scheduled to drop next year and the Nova Scotia Liberals have shown no appetite for challenging federal transfer polices that are costing Nova Scotia dearly.

If that grovelling approach continues, and if revenues are overestimated, spending underestimated and balanced budgets remain the standard for measuring success, the Liberals’ modest initiatives in early learning, disability supports and income assistance could prove to be one-offs, dropping from sight by the time the 2017-18 budget rolls around. And there’s another possibility, one that the Conservatives are sure to keep hammering at in the run-up to the next provincial election – a tax cut. If the Liberals see a political advantage in going down that road the loss of revenue will mean that “Supporting Nova Scotians who need it most” will indeed become another empty slogan.

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About Richard Starr

RICHARD STARR has had careers as a journalist, public servant, broadcaster, political staffer and freelance policy adviser. He is author of numerous newspaper and magazine articles, appearing in everything from Atlantic Insight to Atlantic Progress. A lifelong student of Maritime history, Starr is married to playwright and former MP Wendy Lill. They live in Dartmouth.
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