Nova Scotians Cannot Suffer Our Way To Prosperity

Another year, another Nova Scotia government putting forth a budget that makes “tough” choices, supposedly to put our province on the route to prosperity. Last time it was the citizens of Yarmouth. This time, it's students, public servants, and workers in the film industry. Next time, it may be the teachers, or that perennial favourite, the nurses. Our politicians agree: if we're going to fix Nova Scotia, Nova Scotians will have to suffer.

At this point, we know the song by heart. A new government is elected in Nova Scotia. They make a series of “tough” choices, saying that ordinary Nova Scotians will have to sacrifice if we're ever going right our fiscal ship and sail on to prosperity. All serious political commentators in the province nod their heads and praise the courage with which our leaders decide who will be sacrificing this time.

In the last year of its mandate, the governing party proclaims that they've done it! They've balanced the books! They proceed to lose the election, and the new government announces with dismay that the previous government lied. They were cooking the books! Revenues are lower than projected! Solemnly, the new government declares that they will have to make some “tough” choices and that ordinary Nova Scotians will have to sacrifice if we're ever going to right our fiscal ship and sail on to prosperity.

It isn't hard to understand the appeal of this narrative to politicians and voters. It is simple and straightforward to assume that our economy is in dire straits because we have been profligate and that recovery is conditional on us all paying collective (or should I say “selective”?) penance. However, while this narrative may make a certain kind of Puritanical moral sense, it is utter nonsense fiscally and economically.

As advocates for the film industry tax incentive are eloquently arguing right now, Nova Scotia's $27 million investment in their industry pays off with over $100 million of economic activity. Nova Scotian camera operators, lighting specialists, and actors don't just make money because of the film industry tax incentive; they spend it, too. They spend it at local businesses, small town hotels, and, of course, cocktail bars. They spend it right here in Nova Scotia. As do our civil servants and the students who come from around the world to study at our universities.

Get rid of the film industry, downsize the civil service, and soak students for more tuition and that money doesn't get spent. Businesses, hotels, and restaurants will see their profits decline. With fewer economic transactions and lower incomes all around, tax revenues will decline and all those “tough” decisions will have once again failed to balance the budget. And, because our leaders never learn, they will begin looking for the next group of Nova Scotians who have to sacrifice so we can right our fiscal ship.

If the government goes ahead with the “tough” decisions it revealed last week, the film workers and civil servants will eventually be okay. They'll do what too many of our skilled workers do: pack up their families and take their skills to a place where they can get paid for them. And our province will continue on its path towards becoming a dedicated retirement community.

Nova Scotians cannot suffer our way to prosperity. There is no path to fiscal and economic stability in this province that begins with more unemployment and lower wages. Our political parties all seem to understand this truth when they're in opposition. It would be nice if some day one of them would remember it when they're in power.