NS: Be prepared for cuts to services, warns finance minister

[TRURO, NS] – Nova Scotians have to look at what services they could do without, Finance Minister Graham Steele told a business audience on Wednesday.

Speaking with the Nova Scotia Chambers of Commerce, Steele said the province spends $1 billion of its $9-billion budget on interest payments on the debt and that figure has to come down.

“It’s like the debt walls are pushing in and our job is to push them back out again,” he said. “This province is on an unsustainable financial path.”

He said Nova Scotians have to accept there is a problem. An expert panel has said the province has to reduce costs, raise revenue and spur economic growth.

Steele shared a story of a meeting with a young, well-dressed man talking on his cell phone while walking up a downtown Halifax street.

“As he walks by, he puts the cell phone down and says, ‘don’t raise my taxes,’ and then he continues walking up the street,” Steele said. “That’s not where the conversation has to stop. The real political question is ‘if you don’t want me to raise the HST, how am I going to get the revenue that I need.’”

Government has been eliminating fat for a long time, Steele said, and there’s no money to be found under “the seat cushions” so government might have to do less.

One man suggested taxing bad behaviour, such as non-energy efficient light bulbs, plastic bags or vehicles with a high fuel mileage. Steele said taxes on items like disposable coffee cups would likely not raise the needed $300 million to $400 million.

“The amount of money that would be raised by it would be so small, that it essentially would be insignificant,” he said.

Antigonish Chamber of Commerce’s Phil Hughes disagreed using a sport analogy.

“It’s like saying you only throw 80-yard passes in football because they’re the ones that give you the big score,” he said. “If there’s a way to save money that are good, that makes sense, go for it.”

Steele warned the crowd they could expect to hear about labour disputes with most of the 450 different collective agreements the province has with its employees coming up for negotiations within the next six months.

“Some bargaining units are going to get to the verge of strike action,” he said. “We hope we can settle all of these things before it comes to strikes.”

But the days of 2.9 per cent annual raises are over and lower increases will need to be accepted by public employees.

“If we’re going to get where we need to go there has to be restraint on wage costs,” he said. “We have specifically rejected wage freezes. That’s been tried in Nova Scotia in the ‘90s; it doesn’t work.”