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Priorities that should be reflected in the Nova Scotia 2022-23 budget

Nova Scotians deserve a government that learns the lessons of the past to build a better tomorrow

March 27, 2022

8-minute read

We are in the third year of a public health crisis that requires people to be able to shelter in place and yet, many lack access to safe, supported, adequate, affordable housing, and that access has only gotten worse during the pandemic. Now that our government has lifted the state of emergency, and the ban on renovictions, we could see more people on the streets. Schools are relied on to provide warmth and food to children due to government failure to provide adequate supports for families to afford this themselves. Nova Scotia has the highest poverty rates for children in the region, with 41,230 children or 24.3% living in poverty. Successive governments have failed to address food insecurity while we have the highest provincial rate of food insecurity. What about health care itself? Public health was never much of a priority, primary care practitioners, including family doctors, were already in short supply, and the pandemic has caused long waitlists for many procedures.

Despite these failings, the December fiscal update shows a provincial surplus, in part because of overestimation of impact the pandemic would have on revenue, and because of federal spending. We have the fiscal capacity to invest and we must. We cannot afford to waste this capacity on tax cuts or schemes that fail to address our deep social needs.

As Lars Osberg pointed out about the new government’s corporate tax cut, it could cost up to $200 million in revenue. But what will it accomplish when most of these companies would have increased their wage bills compared to last year anyway (including because of increases to minimum wage)? This is a subsidy Nova Scotians cannot afford. Moreover, the government should instead consider making our tax system more progressive by, for example, fully taxing capital gains or shifting federal tax deductions to refundable tax credits at the provincial level as we have outlined previously.

What should be reflected in the priorities of the new Nova Scotia government’s budget?

Our systems are not able to withstand small shocks, let alone big ones. This is concerning given the ongoing pandemic and likely future ones, combined with slow action on the climate crisis.

Many people continue to be left behind because of holes in our safety net. Many are now faced with further erosion in their standard of living as substantial price increases for essential needs, including food, eat away at their income.

We require significant investments to fill the gaps in our safety net, lift Nova Scotians out of poverty, address the housing crisis, and meet our health and social care needs. The care economy must be a focus for the investments, ensuring Nova Scotians can access the continuing care (long-term care, home care), child care, education, health care and social services that they need, while ensuring those providing the services receive decent wages and working conditions, including paid sick leave.

As we previously argued, “That the vast majority of COVID-19 deaths occurred in long-term care homes tells us that we must do a complete rethink on how we care for older Nova Scotians.” We absolutely must increase the quality of those homes, but we need to do much more. As the province with one of the largest shares of seniors, what if we develop solutions to make Nova Scotia more age-friendly? An age-friendly community would benefit everyone: barrier-free buildings and streets, affordable housing, well-paid caregivers and support, accessible and flexible employment opportunities, and expanded public health care, are some of the improvements that would be needed.

The cost of underinvestment

Compared to other provinces, we aren’t a big spender; our program spending of $11,987 per person (as of November 2021) is among the lowest of all provinces.

This is despite Nova Scotia’s demographics: an elderly and relatively large rural population makes it more costly to provide adequate health and education services, justifying higher-than-average spending. There is no justification for any retraction in spending—we know most spending on COVID came from the federal government (92% in NS), and now we have to deal with the pandemic’s aftermath.

For the current fiscal year, program expenses are projected to be 24.8% of GDP (which does not include debt servicing), and projected to continue going down. In 1981-82, program expenses were 26.8%. Needs have become more complex since 1981, not less. So why did government expenditure shrink? With Nova Scotia’s GDP well above $45 billion, the 2% decline in spending represents over $900 million dollars.

Even if additional spending means running a debt, we should be more concerned about this lack of investment, with debt-to-GDP ratio of 37.4% in March 2021 and projected to decline. Debt servicing costs as a percentage of expenditures have fallen to a decades low of 5%, and the government continues to be able to borrow at near-historically low interest rates, locking these in for decades.

The fiscal capacity is there to make the needed investments.

Inaction and underinvestment have a tremendous cost. Poverty costs Nova Scotians $2 billion dollars a year, which represents 4.8% of GDP. These costs include healthcare and criminal system costs, loss of productivity and the cost of children being trapped in a poverty cycle.

We have some of the lowest government income support programs in the country. Households who rely on the government as a last resort are in deep poverty. The Employment Support and Income Assistance rate for single parents with one child families is the lowest in the country, and even adding in federal support only provides that family with 57% of the Market Basket Measure poverty line. The system’s fundamental design remains—to keep families and individuals in deep poverty.

The pandemic showed that our health care system functions with very lean capacity in terms of its human resources and ICU capacity. Nova Scotia has one of the highest provincial rates of unmet health care needs. Investments in health care now needs to make up for decades of underinvestment. The solution is not to contract-out health care to deal with longstanding issues including wait times for surgery; we know that for-profit privatization only makes things worse. Instead, as the NS Health Coalition argues, we need “further investment in the public system and the introduction of organizational measures to maximize and increase surgical capacity including expanding the use of centralized referrals, creating a workforce development plan, and expanding community-based rehab and prehab clinics.”

Now is the time to also be investing in postsecondary education both to expand the spots available and to make education more affordable. There are two-year wait lists for many NSCC programs, including the licensed practical nurse program. Nova Scotia’s universities have the highest tuition fees in the country, averaging $9,028 (2021-22). Thus, our students also have the highest average debt at graduation. We know government funding as a percentage of operating revenues for universities has continued to drop; for example, Dalhousie University gets 44% of its revenue from government grants, while 46% comes from students, with particularly high fees for international students.

How can health care and other skilled labour shortages be addressed, when students face the highest tuition and graduate with the highest debt in the country?

Investments are needed

The pandemic has shown just how interdependent and connected we are, and just how important it is for us to build our collective strength.

We need a government willing to commit to fiscal fairness—where those who have more do their part, and our governments collect sufficient revenue to make the social investment required, which COVID-19 has shown is needed urgently. The pandemic is not over.

Nova Scotians deserve a government that learns the lessons of the past to build a better tomorrow.

Here are the top priorities that we want to see in the upcoming budget:

  1. Invest in a Just Transition and Environmental Protection: Invest in a just transition for our economy that centres climate justice; e.g. cancelling the energy rebate that encourages consumption and redirecting savings (of about $100 million per year) to address energy poverty; ensuring investments in energy efficiency remove barriers for those least able to afford retrofits; and any investments in (re)training and skills-building must include targets to ensure equitable benefits for those who have been marginalized because of discrimination (underemployed, unemployed or low-paid). Further, as the Ecology Action Centre has advocated, the government needs to: properly resource the goals outlined in the Environmental Goals and Climate Change Reduction Act, as well as the forthcoming climate change plan, this includes improving public transportation infrastructure across the province.

  2. Protect and Extend Public Health Care: Protect public health care by investing in front-line services, contracting-in to save money, and extend universal public health care by investing in: community health centres, long-term care, home care, mental health care, pharmacare, dental care, and vision care. Ensure that all residents no matter their immigration status have access to a NS health card, including international students, migrant workers and refugee applicants.

  3. Tackle the Housing Crisis: Implement the 95 recommendations in the Housing for All report to ensure that all Nova Scotians have meaningful access to safe, permanently affordable, secure, supported, energy efficient housing, including in this budget cycle, making a targeted and large-scale investment in affordable housing units delivered via the not-for-profit, cooperative and public sectors (planning for 33,000 units in total), while also investing in core funding support for the community-based housing sector.

  4. Eradicate Poverty: Fully fund a comprehensive, robust Poverty Eradication Plan, developed using the Social Policy Framework, that includes targets and timelines that are embedded in legislation (as outlined in our child and family poverty report card).
    1. Immediately invest to enhance income supports and address deep poverty, while working to ensure that the combination of current federal and provincial tax credits and income supports including the Nova Scotia Child Benefit, and the Nova Scotia Affordable Living Tax Credit, the Poverty Reduction Credit, equals 100% of the Market Basket Measure poverty line. All these benefits must include regular cost of living increases taking into account housing/rental inflation and food inflation.

    2. Invest in proactive strategies developed with communities that have particularly high poverty rates to ensure policies and programs meet their needs.

    3. Immediately end the practice of removing the Canada Child Benefit, Child Disability Benefit, and the Nova Scotia Child Benefit, from families when a child is brought into temporary care and custody.

    4. Funding to ensure access to affordable essential infrastructure, including communications (cell phone, internet) and public transportation.

  5. Protect Human Rights and Provide Reparations:
    1. Create a Child and Youth Advocate office to protect and promote the rights of Nova Scotia’s children and youth.

    2. As outlined in the open letter by the Disability Rights Coalition, the government must “implement the Court of Appeal October 6 ruling, drop the application to the Supreme Court of Canada, negotiate a systemic human rights remedy to the problem of discrimination against people with disabilities in accessing social assistance, and end the funding cap which singles out the disabled and creates barriers to their inclusion in our communities.” Deinstitutionalization of persons with disabilities ensuring access to community housing and supports must be a priority.

    3. Undertake substantive reform of the Nova Scotia Human Rights Commission, including, as recommended by Equity Watch, setting up a Human Rights Tribunal to deal with complaints and adjudication, and a Human Rights Legal Support Centre for complainants.

    4. Continue to support First Nations in Nova Scotia to assume self-governance over child and family services and ensure all public services meet their cultural, historical, and geographical needs and circumstances.

    5. Commit to reconciliation and supporting Indigenous self-determination, while decolonizing mainstream institutions, and implementing policies for reparations for African Nova Scotians as well, while ensuring all services in Nova Scotia are culturally safe for all.

  6. Invest in Education (from early learning to post-secondary):
    1. Continue to increase funding to build a high quality, early learning and child care system that is child-centred, play-based, seamless (all day, full year), truly affordable, accessible, inclusive not-for-profit and publicly managed, so that every child under the age of 12 can have access. Immediately address low wages of ECEs.

    2. Strengthen inclusive, high quality and safe, public education.

    3. Increase funding to post-secondary education institutions, immediately lower tuition and commit to the eventual elimination of tuition fees (first at the NS Community College), while converting all student loans to grants, and provide student debt forgiveness.

Authors: Christine Saulnier, Director, CCPA-NS; with Mahmoud Elwaraki (Masters Student, Dalhousie Economics)

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