What the Budget was Missing
Posted October 6, 2017
The budget presented just before the election call this spring was understandably full of promises of good things, and carried no hint of the tough choices to be addressed.
There was little that was different in the budget presented on September 26th. Given a new, albeit reduced, majority, the Liberals can anticipate four years before the voters again pass judgement. This was the time to name the difficult challenges facing us.
It would have required a couple more pages at the end of the Minster’s speech. For example:
“Mr. Speaker we are proud to be presenting a second balanced budget. Paying our way is crucial to the future of our province, which has a declining number of workers whose taxes must pay for services and service our considerable debt.
This year’s numbers do not guarantee future success. We must grow our economy and be disciplined in our spending. Our first mandate left a lot of unfinished business.
One of Nova Scotia’s greatest assets is our thousands of kilometers of coastline, including many locations suitable for salmon aquaculture. A moratorium on new developments was begun in 2011. In 2014 the Doelle-Lahey report concluded that, subject to satisfactory regulation, marine-based salmon aquaculture could be an important contributor to the economy of rural Nova Scotia.
It is now six years since the moratorium was begun. The government will by the end of 2018 implement new regulations that will allow this important industry to grow in an environmentally responsible way.
The pension plans for our civil servants and health care workers are in good financial shape. Measures have been put in place which create a significant degree of cost certainty for employees and taxpayers.
Not so the Teachers’ Pension Plan. It had a deficit of $1.4 billion at the end of 2016. The annual interest cost on that is $86 million per year. Recently hired teachers must make substantial contributions to the plan, yet are unlikely to ever have their benefits inflation indexed, as are those who retired before August 1st 2006, and who contributed far less.
This is unfair to the younger teachers, and to taxpayers who have been contributing even more. The annual reports produced by the Teachers’ Pension Plan Trustee have repeatedly stressed the unsatisfactory condition of the plan.
We will during this mandate work with the Trustee and the Nova Scotia Teachers Union to bring this plan to a stable and sustainable financial condition.
Mr. Speaker, we have largely avoided the large handouts to corporations that were the practice of all three parties in previous governments, and usually ended in disappointment.
Nevertheless we continue to make significant investments in certain areas, and an evaluation of the benefits received is called for.
In 2016-2017 our payroll rebate program paid employers $11.7 million, about 7.6% of the $154 million in payroll growth. Processing of claims from other employers after the end of the fiscal year will further grow the payout and supported payroll.
In the same year we paid $10.5 million in support of film productions under the Film and Television Production Incentive Fund, about 30% of the $34.7 million in Nova Scotia spend, most of which is payroll. These numbers are expected to double this year. Another $.5 million was paid in developmental support.
We paid approximately $14 million in support of the Yarmouth ferry last year and will do so again this year. The ferry brought approximately 14,000 visitors to the province last year.
We will, before the end of this year, commission an expert panel to do an independent review of these and other programs to determine for each whether the benefit to the province’s economy justifies the expense. Employers in the affected areas will be invited to participate.
Mr. Speaker, any savings realized by these measures will be needed. The challenge of attracting and retaining doctors has already been noted. The federal proposals to change taxation of small businesses is going to make a difficult situation worse.
The pay levels for our doctors do not reflect their training and ability. For too long Canada has relied on those tax advantages to make up for rates of pay uncompetitive with many other developed economies. Nova Scotia has been at the low end of the range within Canada.
We will immediately begin discussions with Doctors Nova Scotia and the health authorities to develop a more competitive compensation program, particularly for family physicians.
At the same time, we will seek measures to ensure that the priorities and practices of doctors and the health authorities are closely aligned, and that we are making the best use of available technologies—for example, replacing faxes with email.
Finally Mr. Speaker, we will redouble our efforts to reverse the decline in the size of our workforce. In 2016 we received nearly 5,500 immigrants. Building on that success is essential if we are to achieve long term viability for our beautiful province.
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