NS Tories need to base budgets on fiscal realities not myths

April 4, 2002

HALIFAX -- According to a publication released today by the Canadian Centre for Policy Alternatives - Nova Scotia (CCPA-NS) debate about budget options is being limited by myths about Nova Scotia's fiscal problems. The publication 3 Nova Scotia Fiscal Myths contests the myths that:

  • Nova Scotia spends too much on programs and services
  • Nova Scotia is over taxed
  • User fees ensure that everyone pays their share to balance the budget.

According to the authors, John Jacobs and Larry Haiven, these myths are being used by the provincial government to justify user fees and budget cuts.

"Rather than spend too much on programs and services as the government claims, Nova Scotia has for more that a decade spent too little. On a per person basis the province has been spending the least or second least of all provinces" said Jacobs, the Director of CCPA-NS.

The Hamm government, according to Jacobs, has been going after the wrong target with its budget cuts: "the real cause of Nova Scotia's fiscal problems is that it derives less revenue, as a portion economic activity, than other provinces. If Nova Scotia had been generating revenue, over the past decade, at the same level as the other Atlantic provinces, we would have raised more than $1.6 billion in additional revenue, have substantially lower debt servicing costs and have had a balanced budget by now."

According to Haiven (Dept. of Management, Saint Mary's Univ.) the government's strategy of raising "user fees, puts the heaviest burden on those who can least afford to pay, households with low and middle income, while letting those more able to pay, upper income households and corporations, off the hook".

The authors note that the government's fiscal plans have more to do with the Conservative's political agenda than with sound economics.

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