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NS Budget 2015: Ignores Real Problems, Lacks Vision

April 9, 2015

2-minute read

The Nova Scotia budget tabled today is without vision. It was constructed to deal primarily with the deficit.

Undertaking 'restructuring' and 'right-sizing' of the public sector to balance the budget may well make things worse. In contrast, CCPA-NS projected that Nova Scotia’s fiscal health will continually improve provided the government recognizes its responsibility to invest in the economy, and economic growth.

The deficit exists because of revenue shortfall. In order to stimulate economic growth and increase revenue, the government needed to invest now, to create jobs. It should not set up public sector workers as the problem: they provide much-needed services to Nova Scotians, and have good jobs that provide important economic injections in communities across the province. To cut those jobs will makes things worse, create a fiscal drag and hurt rural Nova Scotia and women the most.

Rural Nova Scotia needs a focal point within government and desperately needs investments in infrastructure including wastewater and transportation. Restructuring government to create a Department of Business is not what is needed. Economic development is about more than business competitiveness in natural resources and tourism: it is about investing in people and communities.

Handing over more functions of economic development to private for profit business interests and unelected bodies like NSBI removes important democratic checks and balances.

The priorities of this government are misplaced.

This budget also ignores the needs of the most vulnerable among us. Those living in the deepest poverty in our province will see no increase in income supports. The continued lack of action on poverty reduction is morally repugnant and bad economics. We trap people in a system that robs them of their dignity and everyone pays the costs of the resultant increased health care spending and lost productivity.

The wasteful energy rebate is maintained at a cost of $117 million. When oil prices are the lowest they have been for a while, this was a missed opportunity to begin phasing out this rebate and design a pollution price and act on climate change. Instead there is a cut to the Department of the Environment.

If youth attraction and retention is a government priority as they claim, deregulating tuition fees for out-of-province and graduate students at Nova Scotia universities sends the wrong message. Combined with inadequate increases to university operating grants, relying increasingly on tuition fees to fund higher education will make it more inaccessible and increase student debt even more.

There were very few tax changes in the budget. The government did increase user fees- a form of regressive taxation. They also cut the Healthy Living Tax Credit because it was not achieving its objective to help low income access recreation and fitness programs. This is a justifiable cut given that it was those earning $90,000 plus who were using it. However, the government should invest more into programs that would better address these issues eg. assist municipalities to provide these services at low or no cost.

We made a case for the government to rebalance the tax system to make it fair and more progressive, which would increase the revenue base in order to make needed investments. The investments CCPA-NS prioritizes are based on a vision of a socially and economically just province that is environmentally sustainable. These investments are also those that will grow the economy and create good jobs: for example, if we increase income supports for those living in poverty means people will spend that money in our community, and early learning and child care has a multiplier of 2.23 for every dollar invested.

Instead of a proactive budget, the government whipped up hysteria about the deficit and debt problems, and did not address the real problems we face as a province, including poverty, illiteracy, lack of regulated affordable, quality child care and our worsening infrastructure deficit. With debt-to-GDP declining and interest rates at a historical low, this budget is a missed opportunity.

Christine Saulnier, PhD, is the Nova Scotia Director of the Canadian Centre for Policy Alternatives.

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