Austerity not the solution to Nova Scotia’s economic challenges: study

October 12, 2016

HALIFAX – The provincial government’s austerity program is misguided and is making the real challenges facing Nova Scotia worse, says a study released today by the Canadian Centre for Policy Alternatives-Nova Scotia (CCPA-NS).

The study, Growth, Austerity and the Future of Nova Scotian Prosperity, evaluates Nova Scotia’s fiscal situation and finds the government has misidentified the economic challenges facing the province. Instead of austerity, it argues that what Nova Scotia really needs is sustainable economic development, good jobs and a sturdy social safety net.

“Nova Scotians do face significant economic challenges, but excessive government spending and public sector compensation are not among them. Most importantly, austerity does not address the most significant challenge facing Nova Scotians — the need for good jobs,” says Christine Saulnier, CCPA’s Nova Scotia Director.

Among the study’s key findings:

  • Nova Scotia’s budgetary deficit is small and shrinking, the provincial debt load is manageable, and debt servicing costs are at a quarter century low.
  • The effects of an austerity program would likely impair, not boost, economic growth.
  • The actual economic problems affecting Nova Scotia’s economy, namely chronically weak job creation and challenging demographic trends, would worsen under an austerity program.

Economist Jordan Brennan, author of the study, says, “The government’s approach is too narrowly focused and on the wrong issue. Growth is shaped by a confluence of factors, including working age population, labour force participation, employment — in both the private and public sectors. Rather than being the problem, Nova Scotia’s public sector is giving a boost to overall employment growth, when the private sector has not stepped up to do its part.”

“GDP growth in Nova Scotia has slowed dramatically and income inequality is hovering at a four decade high. The challenges of demographics, growth and inequality are what require attention yet our government is steadfastly ignoring the evidence that austerity makes things worse,” says Saulnier.


The study, Growth, Austerity and the Future of Nova Scotian Prosperity, is available as a free download via the CCPA website.

For interviews with the author, contact Shelley Amyotte, Communications Representative, Unifor, 902-717-7491, [email protected].

For more information, contact Christine Saulnier, Nova Scotia Director, CCPA, 902-240-0926, [email protected].

CCPA is an independent, non-partisan research institute concerned with issues of social, economic and environmental justice.