Leadership can’t be found in a consultant’s report

by Bobby O’Keefe

So the other day there was a story on the front page of a local daily talking about how certain MLAs are getting paid a couple thousand dollars a year to chair committees that never meet. Waste of money? Definitely. Ridiculous? Absolutely.

But the response is even more asinine. Rather than scrapping the payments or the committees that never meet, the internal economy board, an all party committee of the Nova Scotia legislature, has decided in these ultra budget conscious times to hire a consultant to examine the issue of MLA perks and benefits. If we’re lucky, we’ll get the consultant’s recommendations by the spring. Worse yet, the province’s Auditor General is already examining MLA perks and benefits and will be reporting on that topic early in the new year.

So we’re going to spend what will likely be tens of thousands of dollars to determine whether or not we should keep paying people to do nothing, while continuing to pay them whether or not their committee meets and while the auditor general examines the same issue?

Forget the fact that this comes at a time when we’re so desperate financially that we’re talking about raising taxes of all kinds, slashing spending, and still running deficits. That the internal economy board doesn’t simply kill the payments or kill the committees that never meet without running to a consultant so they have someone else’s word to hide behind speaks volumes about the state of political leadership in the province.

This does not mean we shouldn’t study broader spending issues to come up with broader solutions, but much of our financial situation has nothing to do with escalating costs or people not willing to cover their share and pay more taxes. It has everything to do with the fact that our “leaders” won’t stand up and say “ENOUGH!”

Yet we wonder why nobody votes anymore.

What program would you cut?

by Charles Cirtwill

So, Nova Scotia is facing a structural deficit.

Who knew? Well, everyone actually. And, despite assertions to the contrary we ALL knew six months ago and MOST of us knew long before then.

The economic panel struck by Premier Dexter to scope out the size of our fiscal crunch has suggested raising taxes and trimming services but protecting government’s “important role in the economy”.

Who knew? Again, well, everybody actually.

There are no surprises in the report and no surprises that there are no surprises.

But, now we come to what is being dubbed as “Plan B”, at least in the headlines in today’s paper anyway – a program review.

“Nothing” according to the Premier is “off the table” except, so far:

- selling assets like the Nova Scotia Liquor Commission

- freezing government wages

- nationalizing insurance in the province (ie they have no current plans to do so)

Make no mistake, that list will grow.

So, in the interest of helping Premier Dexter keep his “protected” list to a minimum and in the hope that we can start cutting sooner rather than later (taking 3-4 years to think about, target and then begin to implement restraint will dig us a hole so deep we won’t see daylight again in my lifetime anyway), AIMS is opening the public discourse on program review and inviting our friends and readers to offer their ideas, and engage in a conversation here on our blog.

No slash and burn please. If you have ideas try to explain why these programs are excess to our NEEDS and how any negative impacts could be mitigated, preferably with little or no new spending.

By the way – here NOTHING is off the table, including increasing spending if you think that will help grow the economy (or just help those who need help) – but again, try to supply evidence or at least thoughtful comment as to why such changes should be made.

If we get enough feedback AIMS will compile the information into a report, publish it for all to see and supply it to the government as part of their official program review (well, we are going to send in our two cents anyway, but here’s your opportunity to toss your own pennies in the well too) .

To warm you up, here are some immediate thoughts on programs I would cut – starting tomorrow:

CUT – The Gateway Secretariat. Do we really need another gateway empire at a time when our province is broke? NSBI has a gateway office, the Halifax Partnership does, the Strait Area has a gateway group, so does ACOA, so does NB, so does the APCC, so does the Department of Transportation – you get the idea.

CUT – Or at least reduce by half, the Industrial Expansion Fund. Government is TERRIBLE at picking companies that will grow and Cabinet is worse.

CUT – the MLA pension plan. The argument that we needed the pension plan because MLA’s in NS are poorly paid does not wash anymore. We also do not need an MLA pension plan because MLA’s are NOT SUPPOSED to be professionals, this is supposed to be a part time gig not a life long career. Yes, people should not be asked to forgo adding to their retirement nest egg while serving in the House, so give them 5% of their salary into an RRSP of their choice and be done with it. Ten years in the House should not be the equivalent of winning “set for life”, or even be close.

SPEND – more on child care and on transitions to work and support for those looking for work or on fixed incomes. That COULD mean things like:  matching or doubling the federal Universal Child Care Benefit ( or investing in more PORTABLE daycare spots if we prefer that to a more universal but less individually generous approach); reducing our claw backs on earned income during the critical transition from welfare to work – higher thresholds, lower clawbacks and longer transitions would help make work pay and cement an individual’s connection to the workplace; looking at  a program to help low income indiviudals purchase automobiles – public transit often lacks the flexibility real people need in order to get to and from real jobs (a SMART car in every driveway perhaps?).

INCREASE – the HST, it is a good idea to improve our overall tax balance, make us less dependent on job killing income taxes. Overall, it arguably makes our total tax load more progressive – especially if you use some of the increase to do two things: REDUCE personal taxes and increase the GST rebate to people on low incomes.

CUT – The Office of Gaelic Affairs, it is new, we survived without it for literally hundreds of years, and most of its services can be or are being or were being supplied by other entities inside government.

SELL – the NSLC (or at least look very carefully at the numbers) and any other government entity in direct competition with the private sector.

ELIMINATE – the NSLC’s monopoly. If we don’t want to sell it at least let’s make it earn its keep without squeezing out the little guy.

Food for thought – let’s see what you can come up with.

So much conflict, so little time

by Bobby O’Keefe

At the best of times, the Nova Scotia Liquor Corporation has a wonderful conflict to try and manage. It is all at once given the responsibility for both maximizing the profit returning to its shareholders – the taxpayers of Nova Scotia – and promoting social responsibility. Basically it has to get to people spend as much on alcohol in Nova Scotia as possible while drinking as little as possible.

While that conflict in and of itself is a wonderful example of why the regulation and sale of alcohol should be separate, it gets better. Take the case of Ross Harrington. Mr. Harrington runs a wine-making supply store in Halifax. Being in a suburban area surrounded by many apartment buildings with limited space, Mr. Harrington found that many of his store’s customers lacked the space in their apartments or condos to keep their equipment for making their own wine – a perfectly legal activity. So, frustrated with efforts to get the government to adopt rules in place in other provinces to allow “brew on premises” stores (BOPs), he allowed some of his customers to make their wine within the confines of his store. After a time, a complaint was filed and the NSLC had the police investigate and charges were filed.

I’m not suggesting that he should not have been charged for doing something illegal. Any true act of civil disobedience is done with a willingness to face the consequences of those actions. What transpired after those charges is where it gets interesting. Rather than being found guilty of allowing people to brew in his store, those charges were dropped. Instead, he was found guilty of having liquor for sale, because Nova Scotia’s legislation is so vague that anything that could possibly become alcohol with the addition of yeast is considered liquor. Yes, even a carton of milk would qualify. That was followed up with a requirement for all homebrew shops to get a license, for a fee, from the NSLC, because apparently, selling sugar and grape juice constitutes selling alcohol. Worse for Mr. Harrington, the province has refused to budge on allowing him to allow in-store brewing.

The NSLC has offered a variety of reasons for not allowing the change. One, that they’re “concerned about the ‘end use’ of onsite brewing products” (see the Chronicle Herald article here for the quote). I have to admit I have no idea what that even means, but presumably they’re worried about underage drinking or people selling their homemade product, both of which are illegal regardless and entirely separate from the issue of BOPs. Another, that they’re concerned about the impact on the province’s wine industry. However, nobody from the Wine Industry Association of Nova Scotia has ever made a peep about BOPs having an impact – because they know it’s not an issue. Ontario and British Columbia allow BOPs and have thriving wine industries. Those province’s winemakers know that more people making wine means more people with product knowledge and that can be a benefit rather than a drawback for their industry.

The real problem is there to there’s a clear conflict in the situation. While BOPs pose no real threat to sales of local wines, they do pose a small threat to low priced, high volume wines that are ultimately very profitable to the NSLC. So NSLC the regulator refuses to change the regulations for fear that NSLC the retailer will lose money. Is there any doubt that the regulations are going to favour their own revenue streams?

Hate to say we told you so…

by Bobby O’Keefe

The headline in the September 22 Chronicle Herald certainly didn’t say anything surprising: Offshore gas royalties to recede; Darker days looming after revenues exceeded expectations over 10 years. We’ve known for years that the royalties coming to the province from Offshore Natural Gas projects would eventually shrink and ultimately dry up.

Of course, that really wasn’t the story that the article was trying to tell, at least from my read of it. Instead, the article focused on the fact that without these revenues in place in the past few years, the Province of Nova Scotia would have had a difficult time of paying for its programs and as these revenues disappear we’ll have an even more difficult time paying the bills.

Don’t say we didn’t warn you. In Ten Reasons to Remove Non-renewable Resources from Equalization published in 2002, Ken Boessenkool described how non-renewable natural resource revenues shouldn’t be treated as regular revenues and used to fund program spending – because doing so is like selling your house to pay for the groceries.

And in 2006 we reminded people of this in The 100 Percent Solution, pointing out how non-renewable resource revenues were unreliable and subject to wild swings, while on the other hand, government spending is reliable and typically a long-term commitment.

Yet we now seem surprised by the fact that a decline in natural gas revenues for the province is going to mean some tough decisions. Either find the money somewhere else or cut spending. Especially tough when you consider that today’s budget will feature a $590 million deficit.

What could have been done differently? Picture what the situation would be today if, instead of spending all that resource revenue, the full $1.3 billion in natural resource revenue went entirely to pay off the debt. Give or take, that would mean the province would be left with a debt of $11.0 billion instead of the current estimate of about $12.3 billion. More importantly, the province would be paying interest on $1.3 billion less debt – an annual savings of approximately $90 million. That’s annual, so this year, next year, and every year after that.

While that doesn’t completely pick up the slack of a $590 million deficit, it also doesn’t include any savings generated from having to lower expenditures to ensure natural gas royalties could be used for debt repayment, nor does it consider interest savings since natural gas royalties started to flow in 2001-2002 or from future natural gas royalties applied to the debt.

Of course, we already told you so.

AIMS’ 15th Anniversary Celebration

Join AIMS as we celebrate 15 years of “making a difference” at the Freedom Dinner with guest speaker Jawed Ludin, Afghanistan Ambassador to Canada.

Ambassador Ludin’s unique perspective brings new insight to the public policy issue that has become Afghanistan.

To learn more, click here.

To read more about Mr. Ludin, click here.

To order tickets, click here.

Anson Chan, our original speaker had to cancel due to a serious family illness.