To Have a Bright Economic Future, We Need Many More Nova Scotians

The Liberals have produced another barely balanced budget, but we still have a lot of debt and will need a rejuvenated population for long term viability.

The Liberals have developed a commendable unwillingness to experience deficits. They are also exhibiting considerable aversion to reporting more than token surpluses.

Four days before the budget was presented on March 20, a one-time extra revenue of $250 million related to the offshore was revealed. The government had already found a way to use up $180 million of it in the year ending March 31, 2017 and was still working on a few additional projects.

“Buy now, pay later” has been a favourite tactic of politicians over the years, and is particularly in fashion with today’s Ontario Liberals, who will be judged by the voters in June. What is happening in Nova Scotia is the opposite.

For example, the largest single commitment is $120 million to support improved internet access in rural areas. That money is to be spent over ten years.

It is to be put into a trust which will operate at arm’s length from government. That enables the entire amount to be charged to the 2017-2018 fiscal year. It is pay now for spending that will happen later.

The goal of the project is to have at least 95% of Nova Scotians able to download at a minimum rate of 50 Mbps / 10 Mbps via fibre and cable; 10 Mbps / 2 Mbps via wireless. (Google “internet speed test” to see what you have.)

Is it worth that kind of money? As with infrastructure projects such as highway twinning, it is difficult to make a precise economic argument. Qualitatively there are two benefits:

  1. Rural manufacturers and food processors need to have electronic links with their customers and suppliers, websites that respond promptly to enquiries, and up-to-the-minute news about their competitive environment and the economy in general.
  2. Personal access to good internet service is rapidly becoming a necessity of life, particularly for young people, but also for working-age people, and retirees who like the rural lifestyle but want to stay in touch with distant family and what is happening in the world.

Lack of such service contributes to rural depopulation.

In a similar vein, $11 million that was charged to 2017-2018 has been committed to expanding air services for incoming tourists. Tourists arriving by air are the biggest spenders. New routes take time to build enough traffic to be profitable.

The notion is to provide transitional financial support to airlines willing to invest in them. This will be managed by the airport authority, which has until 2024 to spend the money. Similar investments were made to prefund things like university research, innovation hubs, and offshore geoscience.

The alternative for the government would have been to use all or most of the $250 million to pay down the debt. Nova Scotia has the fifth lowest debt per person among the Canadian provinces, but it is still high at $15,765 per person. The three westernmost provinces owe less than $10,000 per person.

Ontario and Quebec owe more than $20,000 per person, but they (especially Ontario) have populations that are younger and growing more quickly because of their large share of immigrants.

Nova Scotia’s population is finally growing after years of stagnation. It has been helped by higher international immigration and lower net losses to Ontario and Alberta. Even with that, the proportion of senior citizens is rising. In the absence of a further increase in immigration the number of Nova Scotians under 65 will continue to decrease for the foreseeable future.

When the Liberals were first elected, Nova Scotia was averaging 2,400 immigrants per year. That rose to 5,500 in 2016 (with the Syrian refugee influx) and 4,000 in 2017.

Neither number is enough. Saskatchewan does more than twice as many, Manitoba does more than three times as many. The Ivany report recommended a level of 7,000 based on Nova Scotia’s share of the population. Today the same calculation would point to 8,000. Arguably, we should set our sights on a larger number, say 10,000, because we have some catching up to do.

Surveys point to increasing support for immigration. The government has been broadening its use of nominee programs, but we need to aim much higher.

Perhaps next year the government will again have a surplus it wants to pare down. If so, it should look first at how that money could be spent in further growing our intake of immigrants.

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