Friday November 13th was an unlucky day for poor Nova Scotians. That's the day four economists (three men and one woman) released their recommendations outlining the economic path the new NDP government should follow. The 94-page report had little to say about the perennial problem of poverty in Nova Scotia. It focussed instead on how the provincial government should balance its books --- not next year as the NDP promised during the spring election campaign --- but within the next four years.
"You cannot build progressive government on a mountain of debt," Donald Savoie, the panel's chair told reporters. His statement was in keeping with the report's focus on government deficits and debt, not the financial plight of the 48,000 or so Nova Scotians on welfare. Savoie claimed that reducing poverty rates is not "off the table" in the coming years, but he made it clear that the first priority for Darrell Dexter's government should be balancing the books by 2012/2013 with a mix of tax increases, government spending reductions and the creation of a "stronger business climate."
Plenty of pain
Panel member Tim O'Neill told reporters that focussing on eliminating the provincial deficit would require hard choices.
"Whichever way you do it, a lot of people's ox is going to be gored," said the former VP at the Bank of Montreal. "There will be broad-based pain at least in the short run."
O'Neill was referring to the panel's recommendation that the government consider raising personal income and sales taxes while reducing spending on health care and education. (Health and education together make up 64 per cent of provincial program spending while spending on community services which includes below-the-poverty-line welfare payments accounts for just 12 per cent.)
Making life "affordable"
The Dalhousie economist recommends the government consider such things as improvements in public transit; tighter regulation of auto insurance; better co-ordination of before-and-after school child care and amendments to labour legislation to guarantee workers unpaid time off to perform family duties such as caring for sick children.
Osberg argues that such measures would not cost the government a lot, but would ease the strains on limited family budgets. (The Dal economist is working in East Africa and was not available to answer questions about his proposals. It was not clear, for example, how significant improvements in public transit or a better child care system could be financed on the cheap.)
Obsessive focus on deficit, debt
The advisory panel's recommendations are likely to ease the pressure on the Dexter government to keep its campaign promise to balance the budget next year without raising taxes or slashing spending. The panel's report argues it would be impossible to carry out such a set of contradictory policies, especially during a deep economic recession.
Unfortunately, the panel's obsessive focus on reducing deficits and debt in order to balance the budget in four years, could give the self-described "conservative progressive" Dexter an excuse not to increase welfare rates significantly. (The Halifax Coalition Against Poverty is calling for a doubling of rates to raise recipients up to the Statistics Canada poverty line.)
But why is it more important to balance the government's books than to make life more affordable for the poor? If we accept Donald Savoie's contention that a "mountain of debt" makes progressive policies impossible, then the NDP must continue to follow many of the policies laid down by the business-oriented Tories and Liberals.
The 2009 Alternative Nova Scotia Budget from the Canadian Centre for Policy Alternatives makes it clear that other choices are possible. As Christine Saulnier, director of the CCPA's Nova Scotia branch says: “We need to have real democratic debate and dialogue in this province about balancing short-term crisis management, with long term crisis prevention. We need to get to a place where the focus is on getting at the root causes of the problems and sustainable solutions.”
Saulnier is right. Balancing the budget in four years is not good enough. The NDP should "balance" its financial problems with its responsibility to the people who need it most. Otherwise, poor Nova Scotians will continue to be victims of right-wing deficit and debt hysteria.