Surplus reliant on restraining health services

When the Liberals unveiled the latest Public Accounts yesterday showing an apparent budget surplus of $150 million for 2016-7, the opposition parties went straight to health care. Why, they asked, is the government running a surplus while Nova Scotians are unable to get the health services they need? And as NDP leader Gary Burrill said in a news release, a good chunk of the surplus is thanks to under-spending by the Department of Health and Wellness.

As Burrill pointed out, despite the fact that many Nova Scotians can’t get a family doctor or timely access to specialists or surgical procedures, the department left $27.6 million on the table last year. That’s the shortfall between what the government thought the department needed to spend on health last fiscal year and what it actually spent.

And it’s not even the half of it. Over the last three years the department has underspent by a total of $87 million, according to General Revenue Fund numbers published in Public Accounts for 2014-5 through 2016-7. Worse, this does not come about through much increased efficiency or some sort of health care breakthrough. It’s mainly the result of delaying expenditures – apparently kicking needed spending from one fiscal year to the next.

In the government’s words

Back in 2013-14, the department actually overspent its budget slightly, the result of greatly increased demands for health services. Here is how public accounts described the campaign to contain the bottom line despite these increased demands. (bolding mine)

“These overages were partially offset by savings of $28.0 million in capital grants as a result of construction delays, $6.5 million in other programs due to lower uptake in the expanded children’s dental age criteria and lower utilization in insulin and supplies, $4.0 million in provincial programs and initiatives due to delays in information technology projects, $2.2 million in Public Health due to surpluses in biologicals as a result of decreased drug costs and delays in Thrive related projects, $1.8 million in administration from vacancies and operational efficiencies, $1.5 million in Primary Care due to various projects related to the Primary Health Information Management system that were not completed in 2014, and $1.1 million due to other operational efficiencies.”

Three delays, an incomplete project, some slow uptakes and a couple million from something that looks like progress– lower drug costs. Otherwise, delay was the name of the game. In 2014-5, under-spending made its debut, despite the fact that the department was faced with over-spending of more than $30 million for services provided by the district health authorities, emergency services and home care. The department offset these cost pressures and more with lots of delay.

“Department of Health and Wellness expenses were $28.0 million or 0.7 per cent lower than estimate primarily due to savings of $24.6 million in capital grants as a result of delays of major construction projects, $9.6 million in Physician Services due to utilization savings in Fee for Service and Chronic Disease Management, $5.9 million in Long-Term Care due to later than planned bed openings and deferral of non-emergency capital projects, $6.3 million in provincial programs and initiatives due to delays and re-definition of scope in information technology projects, $4.2 million due to various project delays related to the Primary Health Information Management program, other Primary Healthcare Programs, and lower than anticipated call volumes for 811 Telecare service, $3.5 million in Addictions and Mental Health mainly due to later than planned implementation of addiction services programs and Together We Can initiatives…”

More delay

It looks like some progress was made there with payments for physician services, but otherwise, the response to cost pressures is mainly delay, delay, delay- the same in 2015-6. From the Public Accounts for that year:

“Department of Health and Wellness expenses were $31.3 million or 0.8 per cent lower than estimate primarily due to savings of $28.0 million in capital grants as a result of delays with major construction projects, $8.0 million in Health Authorities primarily related to prior year accounting accruals, $7.0 million in Physician Services for utilization savings and reduced costs in Master Agreement programs, $6.8 million in various programs including delays in information technology projects, program delays, as well as savings in Long Term Care…”

The department also claimed some savings from administration and operational efficiencies – good news if it can be verified. The same claim appears in this year’s Public Accounts – a cool $7.7 million less between estimate and actual expenditure on salaries and administration. But delay is still the go-to solution to cost pressures.

“Department of Health and Wellness expenses were $27.6 million or 0.7 per cent lower than estimate primarily due to $15.7 million in lower capital grants and amortization as a result of project delays and changes in cash flow requirements, $7.7 million in salaries and administrative reductions, a $6.1 million decrease caused by delays in information technology projects, $4.6 million in home care savings associated with lower than expected utilization, and net savings of $8.0 million in various other program budgets.”

It is beyond the scope of this essay to assess the impact of this litany of delays, but it can’t be good. Between 2012-13 and 2016-17 the Liberals have limited health spending to a bit above the rate of inflation. Delaying projects, along with wage restraint, have been the key elements of this approach. Neither is sustainable, given an aging population,health care workers’ claim to fair compensation and the public’s right to a national standard of health services. However, no one should get used to the idea that the recently unveiled surplus signals that good times are upon us and the choice now is between continuing surpluses or better health care.

The appearance of a surplus while health care needs go unmet will provide excellent talking points for the opposition in the months ahead, but the surplus is very shaky. The Public Accounts reveal that on the revenue side it is reliant on an unprecedented Prior Year’s Adjustment of $97.3 million in corporate taxation. On expenditures – aside from stiffing health care – the bottom line depends on a reduction of $134 million in “restructuring costs”- a perennial budget cushion. Without those two entries, a $150 million surplus becomes an $81 million deficit. Not the end of the world certainly, but at least a conversation changer.





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The Sage makes a rocky curtain call

Donald Savoie has mounted the barricades again. Called by some the Sage of Bouctouche for his long career of writing, teaching and advising governments, the septuagenarian University of Moncton political scientist has a new book out on Maritime economic development and its complaints.

The 400-page tome Looking for Bootstraps: Economic Development in the Maritimes comes along a decade after Savoie swore off the topic following publication of “Visiting Grandchildren: Economic Development in the Maritimes,” also weighing in at around 400 pages.

Grandchildren was a scholarly work published by the University of Toronto Press. A cover blurb called it Savoie’s “magnum opus” on the subject, and indeed it was. The book was a comprehensive review of economic development and the politics around it dating back to Confederation. It detailed how national economic policies have favoured the central provinces at the expense of the Maritimes and challenged many of the myths about the regional economy propounded by the national media, central Canadian politicians and neoliberal think tanks.

Writing a sequel to a magnum opus is no easy task, but Savoie has given it a go with the more populist Nimbus-published Bootstraps, looking back with some anger at most of the topics covered in his previous writing. And he is promoting the book through a four-part series appearing in the Halifax Chronicle-Herald and the Irving newspapers in New Brunswick.

In the intro to the book, and in media interviews Savoie, a much-honoured academic (two awards worth $150,000 in the past two years alone), does not pinpoint exactly why he’s back at it, other than that he has “become increasingly concerned about the future of my region and its ties to Canada’s national political institutions, how our provincial governments are planning for economic development and how the Maritimes view our economic future.” He says he wants to have a debate about those concerns.

New concerns

The reader may get a better idea of where he is coming from through the recent developments he chose to highlight in the new book, tellingly dedicated to the late K.C. Irving “a visionary, a builder and a deeply committed Maritimer”- and a native, like Savoie, of Bouctouche, Kent County, New Brunswick.

One new concern is the Ontario-dominated Trudeau government. Savoie has never pulled punches when it comes to criticizing the tendency of some Ontario politicians to confuse and conflate their province’s interests with those of the country. As Savoie points out, it’s getting worse. In Bootstraps he laments the continuing loss of Maritime political clout in Ottawa, evidenced by the minor cabinet portfolios now held by Maritimers. And he bemoans the fact Trudeau’s transition team consisted of “four Ontario-based individuals” and “all key actors in the Prime Minister’s Office are also Ontario-based individuals with ties to the Ontario government.”

In recent years that Ontario Liberal government has maintained an aggressive Ontario-first stance on issues like transfer payments to the have-less provinces. Sobering as the revelation is, it is good that Savoie is shedding light on the fact that this corrosive agenda has found a home in the PMO.

Not so welcome is another area of emphasis – an embrace of the notion that federal transfer payments to the Maritimes should somehow be contingent on us engaging in environmentally-risky resource development. Even before this book, Savoie was a critic of the Nova Scotia and New Brunswick moratoria on fracking for shale gas, questioning how on “both economic and moral grounds” those provinces can say no to fracking but “accept transfer payments from other regions that are generated largely by shale gas and oil development.” He also trots out opposition to uranium mining as a further illustration of our supposed unwillingness to shake off the status quo in favour of pursuing greater prosperity.

Besides urging Maritimers to embrace uranium and shale gas, Savoie floats a number of other reform proposals – a two-tier wage scale for public servants, tougher EI requirements, more skills development and better cooperation between provincial governments and institutions such as universities. He calls forth the old reliables, admittedly inspired by the Ivany report, “courage, imagination and a determination to do better.” And he makes the rather startling claim that without embracing such solutions the population of the Maritimes may shrink by three-quarters to about 500,000. (Think what that will do to property values).

Transfers downplayed

Like the Ivany report, Bootstraps is broad enough that it can be used to support both sides of the argument about inter-regional fairness. Those who believe that Maritimers are getting a raw deal from Confederation will find lots in the book to support their case. But the likes of the Alberta Wildrose and Saskatchewan’s Brad Wall will no doubt be delighted to cite Donald Savoie, the Sage of Boutouche, in making their arguments for curtailing equalization and other transfers.

And it is on the transfer issue that this book is most disappointing. While laying out in some detail the recent changes in transfer payments that have the potential to damage citizens of this region, Savoie appears to accept those changes as a done deal. In doing so, he does not even consider the equality of citizenship implied in Section 36 (2) of the1982 Constitution Act, landmark legislation brought into being through the leadership of the father of our current Prime Minister.

He ignores the central argument of my 2014 book Equal as Citizens that the federal government has an obligation to ensure that equalization payments are sufficient to provide all Canadians with a reasonable standard of public services at comparable rates of taxation. He he also gives short shrift to the case laid out by his younger colleague, Richard Saillant, in his 2016 book A Tale of Two Countries.

Saillant, who is, ironically enough, director of the Donald J. Savoie Institute at the University of Moncton, has argued that due to our aging population and shrinking work force no amount of tweaking of the economy will save the five eastern provinces from being unable to afford “health care as we know it” without tax hikes that would “push residents to leave in droves.” It’s not clear whether Saillant’s “droves” would lead to the kind of drastic de-population imagined by Savoie. But unlike Savoie (and Ivany), Saillant emphasizes the responsibility of the federal government to prevent the emergence of two classes of citizenship – and mass out-migration – by transferring more money to older, faster-aging provinces.

Saillant does argue that we need to earn those additional transfers by changing our ways – increase provincial taxes, be more efficient in public service delivery and be more fracking-friendly. Some will not agree with this part of Saillant’s thesis, but at least he moved the debate forward, beyond the anger over past transgressions and the longing for a different economic reality that marks Savoie’s latest foray.

The contrasting views of the two professors would make for lively debate in the faculty lounge at the University of Moncton, but what’s really needed is getting the discussion into the public political arena. That’s a difficult task when the Maritime caucus and the three Maritime governments are solidly Liberal and the Prime Minister is all about spectacle and photo opportunities. But we could start with a family-friendly question for Justin Trudeau. How does he square the most recent health transfer deal with the equal citizenship of section 36 (2) of his father’s proudest achievement, the Constitution Act?


PSAs I was writing this post, word arrived that the federal government is putting $65.6 million into twinning highway 103 from Tantallon to Hubbards. Does this good news for automobile travellers mean that a page has been turned, that the Trudeau government is rewarding Nova Scotians for their support at the last election? In a word, no. This funding comes compliments of the Building Canada Fund, initiated by the Harper government in 2007, extended by the Conservatives in 2014 and continued under the Liberals. Since its inception, Nova Scotia has qualified for up to $50 million a year under the program. The Highway 103 project will use up about $17 million a year which means there will be lots left over for other projects. Thanks Steve, wherever you are.




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Domesday File #1: Attract Yes- Retain Maybe

Domesday File: An occasional series inspired by the Domesday Book, the detailed survey of the wealth and human resources ordered up by William the Conquerer in 1085

Talk about raining on someone’s parade. While the weather outside sprinkled only a few drops of precipitation on Halifax last Friday, the monthly labour force survey from Statistics Canada unleashed a downpour on the economic aspirations of many.

The headline item from the monthly report is a sharp increase in the number of unemployed in Nova Scotia – up 13%, from 39,400 in June 2016 to 43,500 in June 2017. The details are summarized here, the website of Nova Scotia Finance and Treasury Board. That astonishing province-wide increase is eclipsed by the even more startling upsurge of joblessness in Halifax, from 13,500 in June 2016 to 16,900 last month, a jump of 23.7%.

Luckily, one swallow does not a summer make. As noted in previous posts like this one it’s not advisable to get too excited over a single month’s job report – a caution which may explain the lack of media coverage of Fridays’ figures. Monthly reports are based on surveys and are subject to sampling anomalies. Annual averages are much more reliable But with that caveat in mind, it is worth digging deeper into the June jobs report. Here’s why.

Labour Force Up 

It has been a constant refrain since at least the advent of the Ivany report that attracting and retaining immigrants is vital for the Nova Scotia economy.

Thanks to an expanded provincial nominee program and an influx of Syrian refugees, immigration to Nova Scotia has exceeded 6,500 since the beginning of 2016, helping to increase the province’s population to a new high.

Stephen McNeil talked proudly about this during the recent election campaign, as did Ray Ivany himself, last week on CBC radio. He pointed to population growth as evidence that progress is being made on the goals set out in the 2014 “Now or Never” report he authored. And the Canadian Press put out  a story last week claiming –based mainly on year-old immigration numbers and construction cranes on the skyline – that “Halifax is booming.”

And to be sure, there is some good news in Friday’s StatsCanada release. The surge in immigration and population is reflected by an increase of about 5,000 over the last year in both the working age population (15 years and over) and the labour force. That’s a boon for a province with an aging population and shrinking work force.

Employment Flat

But so far, that’s where the good news ends. The rest of the report is analogous to dark clouds overtaking the sun before the rain comes pouring down on the parade.

Job growth has not kept pace with the expanding work force. Province-wide the increase from last June was only 1,500, hence the spike in unemployment as a larger work force went after jobs that were not there in sufficient numbers. In Halifax, a small increase in the labour force (500) combined with a large (2,400) drop in jobs led to that stunning (except apparently to the news media) rise in unemployment.

This may turn out to be a thundershower, a one-month wonder, with employment rebounding in July and pointing the way to a brighter economic future. But if it isn’t, the recent and much celebrated population growth could be just transitory.

As we have heard repeatedly, the task in Nova Scotia and the rest of the region is to attract and retain immigrants. A number of factors determine whether immigrants to Nova Scotia stay in the province, but employment is a big one. Without jobs, most of the new immigrants to Nova Scotia could end up joining a different procession – the familiar one seeking opportunities somewhere down the road.





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Federal transfers: A skunk at the 150 garden party

A lot of folks who have been badly treated by the entity named “Canada” have come forward over the last few days to cast a pall over the country’s 150th anniversary celebrations.

Many indigenous Canadians have been speaking out for months in an effort to shift the focus from celebration to contemplation of the treatment of indigenous people since Europeans set up shop on the northern half of North America over 400 years ago. They carried their message to Parliament Hill over the weekend.

In Halifax, some Chinese Canadians were on the news last week drawing attention to the Chinese Immigration Act, which came into effect on July 1, 1923, the 66th anniversary of what was then a very white country. The act, which banned Chinese immigration for the next quarter century, was a ramping up of the racism inherent in the infamous head tax.

Although the grievance pales by comparison, Maritimers who know their history may also want to put an asterisk on the day of celebration.

Because it was in the history textbooks most people know that many Nova Scotians, with Joseph Howe as their advocate, were strongly opposed to the confederation deal.

The provincial government led by Charles Tupper had refused a plebiscite on confederation and pushed it through the legislature in 1866. But the voters of Nova Scotia showed their disdain for confederation a mere two months after it came into effect. In a general election on Sept. 4, 1867, 54 of the 57 successful provincial and federal candidates were anti-confederates.

Many New Brunswickers were just as negative. Between negotiation of the terms of confederation in Quebec City in 1864 and proclamation of the British North America Act (BNA) on July 1, 1867, New Brunswick elected an anti-confederation government. It took skullduggery by the province’s lieutenant-governor and the threat of an invasion from the United States to spook that province into joining the Ontario-inspired confederation project. And PEI and Newfoundland opted out of the plan altogether.

Nova Scotia short-changed

There were a number of factors contributing to the anti-confederation sentiments in the eastern provinces – fear of domination by the more populous Ontario and Quebec chief among them. But in Nova Scotia’s case, the unfairness of transfer payments from the new federal government -still a bone of contention today- was one of the key issues in dispute. Shortcomings of the original revenue-sharing arrangement that came with confederation fuelled the anti-union movement. Negotiated improvements helped quell opposition.

There can be little doubt that the original fiscal terms left Nova Scotia in a bind. There was a two-fold problem. Firstly, as a trading province Nova Scotia took in a disproportionate amount of its revenue from customs and excise, income sources that were assigned to Ottawa under the confederation deal. The second problem was that Nova Scotia had almost no municipal tax base, leaving the provincial level to pay for many services that were paid for with municipal taxes in more urbanized Ontario and Quebec.

Negotiators at Quebec City in 1864 agreed that the provinces should be compensated for lost customs revenue, but deadlocked on the amount of compensation. An estimate produced by Quebec’s Alexander Galt showed that because of its over-reliance on customs revenue, Nova Scotia would need compensation of $1.70 per capita to maintain its operations.

Although the same formula showed that Ontario and Quebec would need only 38 cents per head for provincial purposes, delegates from the big provinces argued successfully that if Nova Scotia received $1.70, all provinces should. That was considered too costly for the federal level and the entire confederation project was in jeopardy until Nova Scotia Premier Tupper stepped up to save the day – at the expense of his own province.

A centralist who believed that provincial governments should be reduced to the status of municipalities, Tupper agreed to compensation of 80 cents a head for all provinces. By Galt’s earlier estimate, that would leave Nova Scotia 90 cents short while delivering a windfall to Quebec and Ontario, especially the latter. Tupper’s compromise solution thus left Nova Scotia with less than half the revenue it needed to carry out its responsibilities.

Better terms?

The impending shortfall didn’t stop Tupper from pushing through the resolution in support of confederation. Neither did it convince British parliamentarians to change the confederation deal, despite lobbying at Westminster by Howe and other opponents. But after Nova Scotia voters sent their strong anti-confederation message in the 1867 election the complaints received further attention.

Notwithstanding the election result, changing the BNA Act to allow Nova Scotia to secede was not going to happen. Britain would not allow it, and the first allegiance of Howe and most other anti-confederate was to the British Empire. However, the John A. Macdonald government wanted to repair some of the political damage in Nova Scotia. To that end, Howe was offered and accepted a post in Macdonald’s cabinet. Nova Scotia was also given “better terms,” which amounted to a temporary 10-year increase of 25 cents in the per-capita subsidy.

The increase still left Nova Scotia almost 40% short of the revenue needed to replace lost proceeds from customs and excise. The Ontario-dominated Liberal opposition in the House of Commons vigorously attacked the “better terms” legislation” anyway. Using a logic that is still being heard from some quarters in debates over federal equalization and health transfers, they argued that the new deal (and additional expenditure of federal revenue) required the approval of the provinces.

If that sounds familiar it would be because we’ve recently heard something similar from the McNeil government. Defending the decision to drop demands for a much-needed demographic top-up in federal health transfers, the Premier and the former health minister have explained that it’s because some other provinces wouldn’t agree to it.

Back in 1869 John A.’s Conservatives rejected that argument, but unfortunately it seems to work for the current federal government. Happy Canada Day.










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As feared, they didn’t really mean it

The 2016 Liberal budget was quite a different beast from the 2017 budget on which the Liberals are running for re-election. Sure, it shared with the current version the obsession with achieving balance at the expense of public sector wages. But aside from that, it was leftish, featuring new spending on income assistance, childcare and disability supports.

The Liberals seemed proud of those initiatives, too. Childcare was such a big deal the Premier announced it at the Liberal annual general meeting. In 2016 the increase in assistance rates was declared “historic,” and the modest increase in spending on disability supports rated several mentions in the budget. At the time, I wrote a piece here posing the question: “Token Gesture or Welcome First Steps.” Sadly, based on the 2017 budget, the answer has to be “Token Gesture.”

Income assistance

The tokenism of last year’s gesture on income assistance is pretty obvious. The Liberals expect to spend slightly less on this program in 2017-18. When inflation is taken into account, this amounts to a 2.2% cut. Families with children will be cushioned from the effect of budget austerity by increases in the federal Canada Child Benefit that came into effect last year. But the most needy – single recipients with no child benefits – will be at the mercy of the shrunken income assistance allotment. Moreover, because their incomes are too low, they get nothing from the modest tax cuts contained in the budget. And low-income Nova Scotians will find little solace in the budget’s commitment of $2 million this year “to fund a plan to address poverty in Nova Scotia.”


The story on childcare is more complicated. The Liberals are increasing the overall allotment for early childhood development by just under $8 million. That may look impressive – until you consider two factors. First, the child-care system the Liberals started to fix with their 2016 budget cried out for significant investment. Wages for child care workers were the lowest in the country as were subsidies to low-income families. Fees were high, and the number of regulated spaces insufficient. The other confounding factor is that the Liberals seem to be putting nearly half of the new money into expanding school-based pre-primary programs for four-year-olds.

The idea of pre-primary for four-year-olds has been around for a while. The Conservatives piloted it in 2005 but cancelled it three years later. In 2014 the Liberals re-introduced it in eight schools in low-income neighbourhoods. But the place of pre-primary in an improved early learning and child care system wasn’t even dealt with in “Affordable, Quality Child Care: A Great Place to Grow,” the government’s five-year day care plan released just last June.

But that was then. Now pre-primary seems to be using up much of the oxygen in the early learning room. Once worthy of top billing at the Liberal AGM, child care received a few mentions in the budget. But pre-primary – with the Premier’s promise to make it universally available by 2020 at a cost of $49 million- was the marquee promise on day four of the election campaign. Whether this is good policy or just electioneering I don’t know, not being an expert. But as an advocate for people, like my son, who have developmental disabilities I do know a bit more about the third area that received prominence in the progressive-sounding 2016 budget – the disability support program.

Disability supports

Transforming the disability support program over ten years from one characterized by long waiting lists and a gross over-reliance on institutional care into a community-based system serving all those in need was an initiative of the Dexter government. The McNeil government adopted the policy direction but last year’s budget marked the first time any new money was added to achieve the transformation- $2.2 million “to help Nova Scotians with disabilities transition out of facility-based care into the community.”

If anyone hoped that this was the start of something big, she would be disappointed by the 2017 budget. Nova Scotians with developmental disabilities were not among the chosen winners. The 2016 modest start was followed by a modest 2017 follow-up. Funding for transformation increased only slightly, with $2.1 million going to create 12-16 small option beds and the rest – about $750,000 – to assist about 25 individuals who must also rely on family support or some other community network.

If things go as planned this year, a mere 50 individuals will have been helped to live in the community at the end of year four of a ten-year process. But wait lists have increased from 1,100 to over 1,340 in the past year, and Nova Scotia continues to be a shameful anomaly with some 550 individuals still housed in large institutions, even as all but a few provinces have closed such facilities. Meanwhile, the Minister has tried to excuse the lack of progress with dubious claims about “tragedies” that occurred in other provinces when institutions were closed too quickly. [1]

It’s an over-used expression, but appropriate in this case. In their drive for re-election, the Liberals have thrown those 2016 budget initiatives under the campaign bus. They have been triaged out by the more traditional political necessities such as  highways, tax cuts and handouts to business.


[1] It appears the minister is referring to events at the Michener Centre in Alberta which was closed without adequate notice, then re-opened following political pressure inflamed by unproven assertions linking the deaths of several former residents to their relocation in the community.

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McNeil Liberals’ budget: time for a Closer Look

It seems that many in the media barely glanced at last week’s Nova Scotia budget. The rationale was that because it would not be put to a vote, it was more akin to the Liberal election platform than to an actual budget. But if that’s the case – if the budget is indeed the platform – the media and all Nova Scotians should be giving it more than a quick look.

The story so far in the run up to the May 30 election is that after three-plus years of telling everyone there is no money the Liberals have suddenly found enough cash to make millions worth of election promises, with more to come. The media have rightly pointed out that those promises are being paid for through public sector wage restraint. However, all of the attention given to the never-ending list of Liberal promises obscures the fact that election spending notwithstanding, this Liberal budget/platform is a continuation of the past three-plus years of austerity – at least for most of us.

With considerable help from the first phase of the federal infrastructure program, the Liberal budget/platform proposes an overall increase of 3.7%. But some vital areas are not even going to get enough to keep up with inflation – expected to be 2 per cent this year and next. In effect, any area not getting an increase of 2% or more is being cut.

  • Department of Health and Wellness gets a 1.8% increase, a small cut in real terms; but
  • The Health Authority, which funds hospitals gets only 1.1%, a larger cut;
  • Ditto nursing homes;
  • Archives, Museums and Libraries get a microscopic increase of 0.3%.

The unkindest cut of all would be to income assistance, down $471,000 from last year’s estimate – or 2.2% when cost of living is taken into account..

Help for business

As for the increased spending, one-time cost-shared infrastructure – for water, sewer, transit and universities – accounts for a lot of it. But the big winner is the Department of Business, getting a 39% raise, amounting to an extra $54 million. Ironically, a large chunk of the increase is going to the film industry, bringing funding back almost to where it was before the tax credit debacle. Another wad of Business Department cash is going to rural high-speed Internet – a work in progress for the last decade – and the Centre for Ocean Ventures and Entrepreneurship (COVE), a potential boondoggle in the making on the Dartmouth waterfront.

Most of the new cash is being funnelled through crown agencies like Nova Scotia Business Inc. and the Waterfront Development Corp., and according to budget documents is designed “to promote the achievement of private sector growth in Nova Scotia.” That there is more irony,  from a government that came to power denouncing corporate handouts and vowing to stand aside to let the private sector lead economic growth. The growth hasn’t happened and now the Liberals propose to starve health, income assistance, libraries and the wages of public sector workers to raise a few bucks to  coax the private sector into growing.

The continuation of austerity in the aforementioned areas is not just for this year. Save for the election year spending blip, restraint is the Liberal plan right up until 2020, according to budget documents. After the 3.7% increase this year, balancing the budget would require limiting spending to a 0.7% increase in the 2018 budget and 1.3% in the 2019 budget. If Libs are actually running on the budget brought in this week they must be counting on no one bothering to read it, preferring instead that all people hear are the good news announcements and the magic words “balanced budget.”

Bully mandate

Now, about those announcements – the media have helpfully pointed out that they are made possible by wage restraint. That may infuriate opponents of the government, but it’s something of a double-edged sword. The Liberals may spend the next 30 days telling voters that the balanced budget and the array of promises in it are only possible if they are re-elected to keep the public sector unions down.

That may work for the them, depending on how many Nova Scotians share the Liberals’ unwillingness to see public sector workers for the important work they do every day – teaching kids, taking care of the sick and elderly, driving ambulances, working with adults with intellectual disabilities. The Liberals see these Nova Scotians not as public servants but as unionized workers. This anti-union McNeil government can’t see past that. They want to convince enough Nova Scotians of that distorted view to get themselves re-elected.

But there is a flaw in the Liberal approach. When they talk about imposing austerity so they can invest in services like education, home care, health care or child care they fail to connect that those services are delivered by people, not robots (yet).

They don’t seem to get it that the people who deliver those services need to be treated with fairness and respect. And when they are not so treated, we all pay the price. You do not get the best out of people by bullying them.

Nevertheless, the Libs are doubling down on the strategy. Their budget/platform is a not very subtle promise to keep playing the role of bully. They are saying to Nova Scotians – we’ll give you better roads, a tax cut and some other stuff, but to get that, we must continue to keep the public sector workers down.


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Latest Federal budget lays an egg with the public

The recent federal budget doesn’t appear to be getting rave reviews from Canadians.

This past week the Globe and Mail published results of a poll asking 1,000 people whether they had a positive or negative view of the March 22 federal budget. According to the Globe, 52% had negative or somewhat negative opinions. Only five per cent said they had a positive view, 33 % said their opinion was somewhat positive.

With only one out of twenty firmly positive, participants were clearly unimpressed with the budget, and its lack of a plan for eliminating the deficit seems to be a sore point. On the balanced budget question, four in five said it was important to have a plan for eliminating the deficit. Less than one in ten said having such a plan was unimportant.

Normally I would be inclined to regard the findings as just more evidence of the unfortunate triumph of right wing anti-tax, anti-government ideology. However, in this case the opposition parties and the people polled by Nanos research for the Globe may be on to something.

The two main opposition parties approach the matter differently – for the Conservatives it’s mostly about the evils of public debt, period. During the brief budget debate in the House of Commons the Conservatives harped on about the debt burden being passed to our children and grandchildren. (Amazing how Conservatives can fret about that burden while ignoring the legacy of a fossil-fuel degraded environment being handed to the next generation).The NDP’s take was more salient, boiling down to “deficits for what?” Good question.

No there there

During the 2015 campaign the Liberals probably swung more than a few votes by promising – in contrast to the Conservatives and NDP – modest deficits for a few years followed by a balanced budget in time for the next election. That promise has disappeared with no explanation from the Liberals and we’re now witnessing deficits north of $25 billion for this year and last, and no balanced budgets in sight.

The (upper) middle class tax cut and the increases in child benefits are responsible for some of the deficits. But aside from those two measures from last year and a lot of announcements about things that may happen in the future, there is very little to show for the deficit spending. The 2017 budget does nothing to change that.

The Liberals may try to tout the new deals with provincial governments on home care and mental health, but they will be unable to hide the fact that the “new” spending was made possible by sharply curtailing other transfers to the provinces. Major transfers for health, social programs and equalization, up an average of 4.4% a year during the deficit-obsessed Harper years, are up just 2.7% in free-spending year two of the Trudeau regime. There’s irony for you.

But at least the provinces are getting their transfers, diminished though they are. Many initiatives highlighted in the budget are not being funded at all this year. Others are getting a small down payment over the next couple of years, with most of the spending earmarked for after the 2019 election.

In the latter category, housing is the best (or worst) example. The Liberals talk about spending big bucks -$11 billion – on housing over the next ten years. But there’s a catch. Only about seven per cent of that will be spent between now and the next election. The other 93% will roll out only if you re-elect the Liberals – twice – in 2019 and 2023.

MP Nathan Cullen’s description – “a backloaded, bafflegab, better-luck-next-time budget” seems particularly apt when you look at the second category – initiatives mentioned in the budget for which no spending is allocated this year. There are dozens of examples, some of which invite the question, “Why wait?”

Why no money in this year’s budget to “tackle homelessness? Why wait for two years to put some serious dollars into that problem? How about “Improving Indigenous Communities.” The Liberals say they’ll eventually spend $2 billion on that, but this year? Nothing – and only $54million budgeted for next year. And then there is “Housing for Indigenous Peoples not On-Reserve”. The feds will spend $25 million per annum on that, but nothing this year. Same with the “Enabling Accessibility Fund.” That’s slated to get a modest $8 million a year, but not until some time after next April.

Waiting for Child Care  

Perhaps the most transparent deception is the budget’s trumpeting of $7 billion for early learning and child care. Recall that universal $15-a-day child care and creation of 370,000 new spaces over four years was a central $4 billion plank in the NDP’s 2015 campaign platform. The Liberals responded to that with a commitment to spend $20 billion over the next decade on “social infrastructure,” including creation of a “National Early Learning and Child Care Framework to ensure that affordable, high-quality, fully inclusive child care is available to all families who need it.”

That was great campaign rhetoric – accompanied with a big dollar number – to counter the NDP’s day care plank. But the reality revealed in budget documents show in detail the extent to which the Liberal plank was driven not by a plan to significantly improve day care, but by the political need to checkmate the NDP.

There was no money in the 2016 budget for child care and none in the 2017 budget either. The promised “Framework” has not yet materialized as the feds reportedly try to convince the provinces to agree to a plan that would target Ottawa’s support to low-income parents. If the provinces and feds do reach agreement, the promised $7 billion will start to flow in next year’s budget but will total only about $1.1 billion by 2020.

It’s obvious the Liberal day care plan doesn’t hold a candle to the NDP proposal it was meant to neutralize. Instead of the $4 billion committed over a four-year mandate proposed by the NDP, the Liberals may spend about $1.1 billion. Instead of creating 370,000 spaces at $15 a day, the Liberals may create about 25,000 subsidized ones before their mandate expires. And their plan does nothing to bring down costs which can be as high as $80 a day in Toronto and $40-$50 a day in places like Halifax.

And here’s more irony for you. The Liberal child care plan of 2017 doesn’t even measure up to the one that Ken Dryden negotiated with the provinces on behalf of the Paul Martin government back in 2005. That plan, subsequently torpedoed for ideological reasons by the Harper government, was worth $5 billion over five years. The Dryden plan works out to about $30 a head for each province – or nearly $30 million for Nova Scotia. The Trudeau plan works out to about $15 per capita before it increases a bit in 2022. But when inflation  taken into account, the Trudeau plan is worth less than half what the feds put on the table for child care a dozen years ago.[1]

It’s highly likely that none of those Canadians polled about last month’s budget had the time or inclination to read its fine print. But they caught the drift, and details in the budget certainly bear out their ho-hum reaction.


[1] Liberals may argue that the improved Child Benefit will help with child care costs, which is true as far as it goes. But in most provinces, those improved benefits would be eaten up by day care costs in a matter of weeks.


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