When elephants quarrel it is the grass that suffers

Premier Houston and the federal government are constantly at odds on many matters deeply impacting Nova Scotians. Taxpayers are not being well served.

Exhibit A is the climate change threat to the isthmus connecting Nova Scotia to New Brunswick and the rest of the continent. It is low lying ground which is mostly protected by the CN rail line. If lost it would be devastating for the port of Halifax and drive up the cost of imports to and exports from the province. There is agreement that it needs to be protected but not on who should pay for it.

The initial cost estimate was $400 million, but a more recent estimate by New Brunswick reaches $650 million. The provinces feel that the federal government should pay the whole bill, while Ottawa says they might pay up to one half if NS and NB cover the other half.

The provinces are going to apply for the 50% but also plan to seek a ruling from the Supreme Court that the federal government should pay the full cost.

Tidal power has been hailed as a possible gold mine. If viable technologies are found, it could be Nova Scotia’s equivalent to hydro power in Quebec and Labrador, and a big contributor to reducing carbon.

Several private firms have invested heavily in demonstration projects without success so far. The Department of Fisheries and Oceans has made it difficult for proponents investing a lot of money. Ottawa does not appear to be engaged in looking for ways to make it happen.

The Atlantic Loop has been discussed for years as a way to get Nova Scotia off coal by 2030. It would bring hydroelectricity to Nova Scotia from Quebec or Labrador. Neither has enough energy to sell with existing facilities. The clock is ticking but there is no agreed vision, let alone any progress toward the start of construction. The likelihood of getting it done by 2030 decreases every day.

The necessary new hydroelectric project(s) and the long transmission line are each very expensive, bringing the total cost to well above $10 billion. Again, the question is one of cost sharing with the federal government, which has been acting as if it would take a leadership role.

As reported by Aaron Beswick days before Prime Minister Trudeau came to Nova Scotia, some unnamed federal staffer leaked that our provincial government is standing in the way of Ottawa’s attempts to contribute $4.5 billion toward the $7.9 billion cost of the Atlantic Loop.

Premier Houston was quick to set the record straight, telling reporters last week that the $4.5 billion was a loan, not a grant. The benefit of slightly reducing Nova Scotia’s borrowing costs is a trivial contribution to the project’s cost.

The biggest issue is the carbon tax. Houston argued strenuously that Nova Scotia’s plan to reduce carbon would do the job. Federal Minister Guilbeault would have none of it. What matters to him is the means, not the end objective.

So, the Federal Government introduced the federal tax instead. It amounts to 17 cents a litre on petrol, an amount set to more than double by 2030. As noted before in this space, Nova Scotians will see many other expenses rise because of the tax. It is also applied to home heating fuels with no rebate. Provincial and municipal buildings and vehicles will incur the tax, which will require their tax rates to go up.

The federal government offers a softening of these impacts, saying that the full proceeds of the tax will be sent to the provinces if they have requested the federal system. So far none have done so.

When asked about its choice the province replied: “Nova Scotia has been clear that now is not the time for a federal carbon tax. We have not requested for the carbon tax to be implemented in our province. Our position was that if it was imposed anyway, the money collected should be given to the provincial government to support Nova Scotians. However, since we didn’t specifically request the tax, the federal government won’t give us the revenue.”

Both governments are acting like adolescents. When elephants quarrel it is the grass that suffers.

Ottawa is being petty and Nova Scotia is being bull-headed. In the first year this will cost the taxpayers hundreds of millions even with continuation of Ottawa’s rebate system. The amount will more than double in the ensuing years. (When asked, the province refused to acknowledge what the amount is, or whether they had bothered to calculate it.)

That money could be put to many good uses, such as reducing Nova Scotia’s highest-in-Canada taxes, especially for low income people struggling to afford housing.

New Brunswick has seen the light and “requested” the federal tax, while asking them to continue the Climate Action Incentive payments be delivered to households in the province.

Houston should get off his high horse and make the “request” for the earliest possible date. Everyone knows his views on the topic and will see no change in their experience at the pump just because Nova Scotia makes the request.


Related Articles

Budget Season + Show all articles

Reference Material