Last week, Kings-Hants MP Scott Brison gave a speech to the Atlantic Institute for Market Studies, calling for Maritimers to take a long view. He said that this region, with its debts expanding and fiscal capacity shrinking, could be courting insolvency within 10 years.
Brison believes this is the time to prevent calamity.
“We are at the tipping point,” he said in a recent interview. “My message is actually one of hope, because it’s not too late. But in a very short period of time, it will be.”
Maritime governments could soon find it increasingly difficult to raise money from lenders because
debt is expanding while fiscal capacity is shrinking.
In his talk, Brison indicated Nova Scotia’s debt has topped $12-billion.
“If you combine our share of the federal debt with our provincial debt as a percentage of our GDP, our fiscal situation is about as dire as that of European economies like Portugal, Italy, Greece and Spain, just before they hit the tipping point.”
Young adults are so keen to get out of the province that in the past five years alone, the median age has increased from 42 to almost 44, and the population over 65 has increased from 15.1 per cent to 16.6 per cent. Canadians choose to move here in retirement for our lifestyle and low housing costs. Meanwhile, 3,000 fewer children start school every year.
Brison suggested that raising new revenue to eliminate the deficit and reduce debt is a limited option. Corporate income taxes are already the highest in the country, so are electricity rates. Nova Scotia ties with Prince Edward Island for the highest sales-tax rate at close to 15 per cent; while income tax rates here only fall behind Quebec’s.
Concluding in his speech, Brison sent out a warning about such trends. We do not want to consider a future bound by a smaller and increasingly older population that is forced to pay higher taxes and energy rates to sustain fixed capital costs, driving out the few remaining industries. Unsympathetic taxpayers in other provinces could refuse to increase equalization payments. No one wants to think about Ottawa dictating austerity measures on this region in
an effort to balance the books. Odious comparisons have been made between this region and the ravaged economies of Greece and Spain.
Instead, Brison is calling for an initiative he called a New East Partnership and Trade Agreement Plus.
The notion is akin to the New West Partnership of British Columbia, Alberta and Saskatchewan, which will be implemented July 1.
That agreement allows workers to move freely between provinces without requiring additional certification. It binds all governments to treat out-of-province firms equally in procurement contracts and making regulations mutually compatible. Finally, the three governments agree to seek opportunities for joint procurement.
If Atlantic Canada were to work toward a similar economic union, Brison believes, it would promote regional growth while reducing government costs. He also wants to see a regional strategy to encourage immigration, a regional securities regulator and an Atlantic Liquor Commission.
Such a prescription might not completely reverse Maritime Canada’s steady decline, but this plan might point the three provinces in the right direction.
Looking to forge a better future now is wise rather than awaiting what could be a painful future. Plaudits go to Brison for his suggestions, which much more culturally workable than Maritime union could ever be.