Tuesday, May 10, 2016

Budget Vote 2016

Without much fanfare or surprise the provincial budget passed on Friday. A majority government meant there was no chance it wouldn’t pass regardless of any concerns. The 80 hours spent reviewing the budget by the legislature in a majority situation are as much counting the clock as anything. Ministers run the clock when questions get uncomfortable, so for the most part, opposition questioners fill the time with policy issues, clarifications, and local issues. On the occasion that government members get up to ask questions, you can be assured they will not be tough. This is true of governments of any party. It's how the budget process works and really it’s hard to see how the public is served by it. There are no more answers at the end of the process than there are at the beginning.

To vote for or against the budget is often a decision of the caucus you are part of. It may get debated, but if you are in the government caucus it is set that you will vote in favour. In opposition, in majority government situations, the opposition will rarely vote in favour. As an independent member I have the freedom to make my own choice. I voted against.

Every budget, by any party, has good points and bad. The same is true of the Liberal budget presented in the legislature in 2016. But there were certain issues which caused me (and many of my constituents who I spoke to about it) concern, leaving me with no choice but to vote against it. Here are some of my key concerns.

To start with, the budget makes no attempt to address the issue of the Film Tax Credit changes from last year’s budget. A year after the changes made to the program in the 2015 budget it’s clear the changes were far more damaging than anticipated. All indications are the changes have ended up being a net loss to the province. This was the time to address this and fix the issues, but nothing was changed. In fact, the government trumpeted the importance of last year’s changes in the supporting materials for this year’s budget.

The budget makes an attempt at a surplus. It may be a real surplus. But the small estimated surplus is dwarfed by an increase in VLT revenue. This pretty well establishes the surplus as being based on hopes of an upward trend in VLT losses. This just isn’t right.

On the surplus, the Finance Minister made a big deal out of the fact he was booking convention centre contributions against the debt. The budget documents suggest room has been created as a result for the future replacement of the Centennial Building at the Victoria General. This turned out to be a misrepresentation. The overall debt is going up, so no new capacity is created, and in any event the funds booked have already been spent, on the convention centre.

There is almost no increase in health spending, yet no explanation as to how this could be achieved when it has never been achieved before. Likewise the government tried to suggest there is an increase in mental health spending, but it turns out the budgeted about is not much different than last year. Funding to address surgical wait times (a Liberal campaign promise) is far below what the Auditor General has said is required to address the problem.

Over in the energy sector we still seem to rely on the decommissioning cost estimate from Exxon Mobil, despite a likelihood this will go up again as quotes and better estimates come in. If it goes up, the province’s budget position is impacted yet there appears to be no reserve allowed for it.

Finally, taxes go up again. For me it’s not even about whether the taxes go up (we can debate that), but it’s not right for government to say they aren’t going up when bracket creep means that what many Nova Scotians pay will increase.

This brings me to the assumptions in the budget. There is an assumption that tax revenue will increase fairly substantially in the next year. Statistics Canada data suggests labour force participation is actually going down or staying flat, not increasing, in Nova Scotia. It seems obvious that there has not been a broad based and significant increase in incomes in the province (nor is one coming quickly) so the question I asked on the day the budget was introduced about why this number appears inflated, remains unsatisfactorily answered.

There are plenty of other issues and concerns in the budget. The reality is it will take until the 2017 budget to know how accurate this year’s projections really are. The issues above, for me, were enough to not have confidence in the budget and I voted against it.