March Madness in the Summer

When he was in opposition, Grahame Steele would sharply criticize government for spending sprees at the end of the fiscal year. This theme was echoed in his 2010 budget speech as Finance Minister:

“… a directive was sent in early March to all units of government ordering an end to the so-called March Madness. That’s the practice of spending all unspent funds in the last few weeks of the fiscal year. Nova Scotians don’t want to see their money used this way. They want it to stop.”

Nova Scotians must have changed their minds. What government believes they now want is the same madness in August, just before an election is called. Well over a dozen new spending initiatives have been launched since the start of the month, not to mention repeat announcements about Yarmouth ferry subsidies and uses of the $260 million handout to Irving Shipbuilding.

New spending includes money for teen dental work, school breakfasts, guidance and mental health counsellors, job experience subsidies, soil management, and municipal infrastructure. The press release for the loan to Cabot Links neglected to mention that the loan would be interest-free for the first three years, a subsidy worth more than $400,000 per year. The announced loan of $5 million to Immunovaccine, a biotech start-up that has not yet sold anything, is very risky.

Most of the cost for these items will conveniently occur after this fiscal year, so Minister Steele appeared this week to again proclaim that this year’s budget will be balanced.

The big ticket items are largely unchanged.

The crisis in funding of the Teachers Pension Plan has not been addressed. Meanwhile, the cost of inaction on pension issues, as reflected in the Pension Adjustment, spirals ever upward, reaching $118.2 million this year.

Government’s forecast assumes that neither Acadia nor NSCAD will receive any funding in the current year. The optimistic assumptions about growth in personal and corporate income taxes are being continued in spite of a sluggish economy. Poor investments such as those in DSME Trenton and large tracts of woodland are still being carried at book value.

So, if none of the key assumptions is materially changed from the spring, it is hardly news that the conclusion is the same. But there is something to be learned from the messenger, if not the message.

Minister Steele was the first NDP Finance Minister in Nova Scotia. His initial budget reflected a serious commitment to improving the province’s finances. Steps promised included gradual reductions in the number of civil servants, public sector wage restraint, dealing with pension deficits, and a more disciplined approach to discretionary spending.

As time passed, it became clear that cabinet and the premier were not united behind this vision. Government has lost its grip on public sector employee costs; in the case of paramedics, it intervened to push them higher. Rather than reducing, the number of civil servants has inched upward. Good work was done on the Public Services Superannuation Plan, but the problems with other public sector plans remain unaddressed. Government has enriched businesses with handouts that would have made Mr. Steele apoplectic as an opposition member.

Mr. Steele resigned as Finance Minister on May 30, 2012 and indicated that he would not be running in the upcoming election.

A curious set of events has brought him back into public view. In May, Mr. Steele stepped in to fill the breach after Percy Paris had to resign as Minister of Economic and Rural Development and Tourism. He has been busy making loans to corporations and keeping work on the Yarmouth ferry file visible.

Now he is also filling in for Finance Minister MacDonald to tell us about the budget update. It is a remarkable comment on the depth of the government bench that none of the MLA’s who are seeking re-election was trusted with either of these roles, however briefly.

Or, perhaps the government feels that by having Mr. Steele as its visible face, it can regain some credibility on fiscal management. Voters will know better. The picture he painted in 2010 is not the one that this government is pursuing.

Mr. Steele has said that he is not running in the election. He will soon cease to be an MLA and can get back to writing his book. Someday, readers may learn how things would have gone if he had been in charge.


Related Articles

Budget Season + Show all articles

Reference Material