The Nova Scotia Government has run out of options. The reality of our fiscal situation can no longer be hidden or glossed over.

Without serious structural changes to the way that programs are provided in this province, the government will progressively lose its ability to deliver programs that Nova Scotians truly need, as political decision making power slowly leaks away to the province’s creditors.

There are only three direct levers available to government to bring public spending and revenues into line.

The first is reducing debt service costs. These, however, are fixed in the short run, and can only be reduced in the medium to long term by a series of surplus budgets and careful management of existing debt.

Second, the province can raise taxes. Governments throughout Canada, however, are moving in the opposite direction, especially as the public and policy makers become more aware of our uncompetitive tax burden relative to the United States, our chief market and competitor. Wide agreement is emerging that Canada’s tax burden must be reduced, not increased.

That leaves spending reductions as the only direct action that the government can take today to safeguard the sustainability of vital public services and to avoid onerous tax increases in the future.

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