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Nova Scotia Budget a wedge, not a lever

March 25, 2018

3-minute read

There is an urgency for our government to use fiscal policy to promote a different kind of economic growth that no longer sacrifices the environment, our natural resources, or quality of life for the many. But this is not what the Nova Scotia Budget 2018-19 has done.

Ultimately, our fiscal health depends on the health and well-being of Nova Scotians. But the spending in the March 20 budget is not nearly enough to address existing problems and the new ones that have been created by the government’s ongoing fiscal restraint agenda.

For example, there seems to be an assumption that expanding the (taxable and insufficient) caregiver allowance of $400 per month and providing some additional home support will immediately mean that people won’t need long-term care (which received no additional investment).

There is also very little for mental health care, nothing for oral/dental care, and nothing to make pharmacare more available.

Achieving a surplus budget or a zero deficit is not an accomplishment that should be applauded in and of itself. Budgets should be judged for their sustainability. Nova Scotia’s “fiscal” health was attained by sacrificing adequate health care, social care, education and childhood development—allowing our public services to crumble while attacking the integrity and discounting the expertise of teachers, nurses, physicians, and others providing the services, all the while widening the gaps in our safety net.

People who have to rely on income assistance are living thousands of dollars per year below the poverty line, struggling to cover basic needs with inadequate support. We applaud the government for finally ensuring that child support is no longer clawed back from income assistance, something that we recommended.

We have also recommended an increase to the poverty reduction credit, which the budget provides; however, $250 more each year will only help a little, while costing $3 million.

This pales in comparison to the $85-million price tag of raising the Basic Personal Amount tax credit (providing a maximum of $267 in tax relief), which could have been used to turn the poverty reduction credit into a small basic income. The government also moved up the decrease in the earnings clawback. While this will help, it affects only a small number of income assistance recipients (at a cost of only $1.5 million). Why didn’t they move up an increase in the overall rates?

Political decision-making in our province is bedevilled by a focus on the short-term disguised as a concern for future generations. The result of this short-term thinking is to kick problems down the road with higher costs for the next generation, who will be even less able to afford them because we are not investing in our young people now.

While average university tuition fees have increased 18 per cent since the first McNeil government, there is nothing in this budget to decrease fees or make the NSCC more affordable.

And, whether because of poverty in their families or lack of additional supports to create thriving learning and living environments for all kids, even our youngest aren’t getting the supports they need. The addition of more pre-primary for four-year-olds, and 1,000 additional child care spaces is welcomed. However, these investments would go further if the government stopped adding onto the patchwork of programs and subsidies and instead implemented a plan for a provincial, quality, affordable, early learning and child care seamless system. Without removing these barriers, too many community members will struggle to acquire the skills and capabilities they need to prosper. As a province, we cannot afford this lost potential.

The current approach has resulted in very low growth, a stagnant labour market, growing inequalities, and both demographic and democratic challenges.

We urgently need our government to reduce poverty, transition to a green economy with renewable energy, maximize energy efficiency, and expand the sectors of our economy that are already low-carbon (caregiving, teaching, social work, arts and culture), while investing to protect our water, land, and air.

The Nova Scotia Alternative Budget 2018 is a blueprint for a sustainable fiscal framework that supports the development of inclusive and prosperous communities, where we take care of each other and our environment.

When people experience a system that appears to be rigged to favour certain groups, leaving the rest to fight over the crumbs, they become disillusioned and disaffected. The resulting lack of social empathy and economic opportunity can lead to political and social instability, calling into question the very legitimacy of our political institutions.

Clearly, our government has choices. Unfortunately, it has chosen to continue to play wedge politics, instead of leveraging its fiscal power to enable our province to be a place where people are able to build healthy lives and families.

Christine Saulnier, PhD, is Nova Scotia director, Canadian Centre for Policy Alternatives.

This piece was originally published in the Chronicle Herald

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