Nova Scotia NDP: Balanced Budget Bullshit

The Nova Scotia NDP released its 2013 provincial budget on Thursday afternoon; and on Friday morning I was part of a panel on CBC Information Morning to discuss the budget’s impact on us ordinary folk.

I stayed up late Thursday night reading the embargoed budget documents and woke up early Friday morning to scan the media coverage, and as I read and re-read the words “balanced budget” all I could think was: balanced budget and what?

Balanced budget and a 9% unemployment rate in the province (double that in Cape Breton at 18% and no doubt higher in certain parts of the island).

Balanced budget and a child poverty rate in the double digits (20+% across the province, 30+% in Cape Breton, and 40+% for children 0-6 in Cape Breton).

Balanced budget and a social deficit that costs the province between $1.5 to $2.2 billion dollars per year in costs related to poverty (higher crime rates, increased health care needs, higher school dropout rates, lost productivity, and a vicious cycle where kids can’t get out of the poverty they’re born into).

Yet the government says: “Everyone shared in the challenge of getting Nova Scotia back to balance.” Everyone may have shared — but they sure didn’t share equally. It would be like building a house but skipping the floor boards in the kids’ rooms so that you could claim you finished under budget… but then the kids fall through the cracks! (Sorry, too literal?)

While the budget establishes “children’s centres to make it easier for families to access support services for young children and help them make a successful transition to elementary school,” the expenditure is only $1.2 million. The Chronicle Herald wrote, about the balanced budget, that “at $16.4 million, or 17 one-hundredths of one per cent of a $9.5-billion budget, this surplus is subatomic.” So what does that make a $1.2 million investment in the early years?

To be fair, the budget also includes a few tens of millions of dollars in HST rebates for kids’ clothing and footwear, diapers, books; expanding universal dental coverage to all kids under 13 (it used to be under 9); and funding insulin treatments.

But the budget also subsidizes energy consumption for everyone — including those who can well afford it — to the tune of $104 million! (This is separate from the $12 million it rebates to low-income earners.)

In 2009, when the government first introduced this universal energy subsidy, I suggested on contrarian.ca a grassroots response to the wastefulness of it all:

“While the NDP’s home insulation & energy-efficiency improvement program for low-income earners is a good idea, the electricity rebate is an inefficient fossil fuel subsidy that will likely encourage wasteful consumption precisely because it is not targeted at those in need. Here’s my idea: those on one side of the wage gap donate their rebate to a fund that feeds into the energy-efficiency program for low-incomers. This fund could be set up by a charity or the province itself. If only 6 or 7 thousand people did this, it would double the program’s current budget.”

Home-heat is a necessity; greenhouse gas emissions are not. Not only could the government do away with the universal rebate and shift it to those who most need it, it could introduce a carbon pollution tax (exempt low-incomers). Revenues generated could help fund renewable energy development in order to decouple energy from carbon. This, plus small income tax increases on the most wealthy, would help compensate for the reduction in HST in the years to come (which is a good move since the HST is a regressive consumption tax: like the universal energy rebate it doesn’t target those in need).

The government should be more creative, rather than simply handing out coupons that do little more than subsidize oil companies and Nova Scotia Power. Instead, putting money toward renewable energy systems that are designed, manufactured, installed and maintained by companies and employees in Nova Scotia, would “make life more affordable” for homeowners — like the recipients of property tax rebates that help low-income seniors stay in their homes — while also putting others to work. Grow the economy and reduce greenhouse gas emissions.

To make a point of it, the government could invest some of its hundreds of millions of dollars in provincial petroleum royalties and federal offshore oil and gas payments to pay for the creation of a “green-collar economy” in Nova Scotia — similar to what the government is doing (only) in the Halifax Regional School Board.

And why balance the books at all? It’s a great time to be in debt! 🙂

Nova Scotia’s debt-to-GDP ratio is roughly 35%, which is fine. In fact it’s great compared to ten years ago when it was almost 50%. The cost of servicing the debt has also dropped dramatically in the last decade, from 20% to roughly 10% of expenditures. This is partly due to low interest rates, which are in turn due to the tanking of the global economy. But that means the government could not only refinance its debt, it could also borrow at low interest rates to make timely investments in the economy and put people to work — precisely when the global economy is crap!

I don’t expect the NDP government to be able to snap its legislative fingers and simply end unemployment and childhood poverty. But they shouldn’t be so smug, let alone downright disingenuous, about “balancing” the budget. They shouldn’t be so oblivious to the connection between child poverty, unemployment, and the government’s bottom line.