How Can Voters Make Sense of the Platforms?
Posted August 6, 2021
Politicians love nothing more than making spending announcements. None of the provincial party leaders can maintain the frenetic pace of Prime Minister Trudeau but they are all giving it a try.
The Liberal budget tabled in the spring described the future they are planning. As the governing party, they have the great advantage of having the civil service to do their numbers.
Under Premier McNeil, they did a creditable job of bringing budgets back to balance. That has been upset by the COVID pandemic which has hurt revenues while requiring substantial extra spending on health care and efforts to mitigate the economic impact.
This year’s budget projected a return to balance in three years time. That was never going to be easy and has been made more difficult by subsequent settlements with public servants, additional promises, and spiralling costs for physician’s services.
Premier Rankin has signed on to the federal government plan for $10 daycare in Nova Scotia. The platform says it is a $645 million commitment but does not say whether that is shared or just the provincial piece, nor how many years it is spread over.
The Liberals say that their promises will add $451 million spread over four years but it is not clear what amount, if any, is included for the child care promise.
So balancing the operating budget in three years’ time is unlikely, but future balances should be headed in the right direction.
The Liberals are making enormous investments in roads, hospitals, and other public buildings. The other parties appear to support those investments. They result in a ratio of debt to the economy that will be higher in 2024 than it was in 2013 when McNeil took over. Borrowing costs are at historic lows but that does not reduce how much will have to be repaid.
NDP leader Gary Burrill is unrestrained by fiscal considerations. Here are some of their promises:
- Building 1000 new units of housing in the next four years by reinvesting in publicly owned, cooperative, and non-profit housing.
- Funding housing for marginalized communities
- Free, inclusive, school-based, before- and after-school care for children in elementary schools
- Establishing a universal school food program
- Providing free menstrual products in all public places and workplaces
- Increasing income assistance rates to get people out of poverty
- Giving young people a chance by converting government loans to grants
- Working towards eliminating post-secondary tuition fees, beginning with tuition fees at the Nova Scotia Community College
- Investing one percent of the provincial budget into arts and culture
- Raise taxes for corporations and high-income earners
No attempt is made to estimate the cost of these. Regarding a return to balanced budgets, they only say that an NDP government will follow the federal government’s lead. On present form, that means never.
The Better Paycheque Guarantee plank in the PC platform offers employers the opportunity to direct up to 50% of their provincial taxes to workers instead. It would be available to fund employee increases (not for the top 20%) or adding new staff. Given that employers will have more than $300 million to divert to payroll costs, this will be expensive for the provincial treasury.
There is no public listing of who the big taxpayers are, but a good guess would include the big banks, Emera, Michelin, Municipal Group, and other big employers.
The annual increases they would normally provide, together with increases for people advancing in their job grade or being promoted, would use up a great deal of the incentive without creating any jobs.
Small business employers who pay very low taxes and employers in sectors who pay none would not receive much benefit from this program but would find it harder to compete for talent with the big taxpayers.
This is a very expensive way to achieve at best a modest impact.
More promising is the notion of providing tax breaks to 30 and under tradespeople. That would encourage them to stay in the province and attract others from elsewhere in Canada.
A deed transfer tax and higher property taxes proposed for those not paying income taxes in Nova Scotia would be punitive for longstanding cottagers from out of province and the tradespeople they support.
The PCs estimate the annual cost for their promises at $553 million but at the time of writing have not produced a fiscal forecast. Together with existing projected forecasts, their promises would produce unsustainable continuing deficits of more than $700 million.
That is more than the Liberals but less than the NDP.
Population growth has been the most important success story of the last five years. The NDP do not mention it in their platform. The Liberals embrace it. So do the PCs whose program to attract and retain young tradespeople will add to it. They also tout a distant goal of 2 million Nova Scotians in 2060.
The Atlantic provinces have the highest personal taxes in Canada, with Nova Scotia in the lead for most income levels. Yet the parties want to accelerate spending.
Voters are confronted with a blizzard of promises often poorly detailed and costed. Perhaps the best way to judge the parties is to assess their long-term goals, and who voters trust to spend the most wisely.
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Last week’s article contained a serious error. The statement “Educating a doctor costs 20% of the tuition they pay” should have read “Educating a doctor costs five times the tuition they pay.” This was fixed in the online edition.