By Devin Drover, Canadian Taxpayers Federation
Premier Tim Houston returned to the House of Assembly after a historic electoral victory driven by his commitment to lower taxes for Nova Scotians.
This is a worthwhile cause as Nova Scotians are struggling to make ends meet. Groceries, housing and everyday expenses are soaring, driven by out-of-control government spending and Prime Minister Justin Trudeau’s federal carbon tax.
But while tax cuts are crucial, Houston must also focus on balancing the provincial budget to prevent future tax hikes and start paying down big government debt. Without action, Nova Scotia’s provincial government will be trading lower taxes now for higher taxes later.
Currently, Nova Scotia is running a $654-million budget deficit. Unless a different path is charted, government debt will hit $24.7 billion by 2027. This is a financial disaster waiting to happen.
When debt grows, so do interest payments. Every year, Nova Scotia taxpayers already fork out $1.1 billion just to pay interest on the province’s debt. That’s nearly $1,000 per person wasted on interest charges.
If we want to ensure a better future for Nova Scotians, the Houston government must be fiscally responsible today and that means balancing the budget and tackling out-of-control government debt.
Here’s how they can do it:
First, the province should scrap corporate welfare programs that give millions of dollars to some businesses while leaving others to struggle. Handouts to businesses distort the market and cost taxpayers big time. The provincial government could save $377 million by eliminating corporate welfare.
Second, the government should cut its bloated spending on non-health care services. During the 2021 Nova Scotia provincial election, the Progressive Conservatives promised to “fix” health care. Houston repeatedly said deficit spending is necessary to improve the state of the province’s health care system. Yet two out of every three new dollars now being spent is not going toward health care.
The province’s 2022 spending levels were already high, but by simply rolling back non-health care expenditures to those levels, the government could save another $811 million. That’s money that could be used to balance the budget, pay down the debt and still provide tax relief to struggling Nova Scotians.
Instead, the government has chosen to keep the spending taps open, worsening the financial burden for future generations.
Lastly, the province must address the growing pay gap between government bureaucrats and the private sector.
Government bureaucrats make nearly nine per cent more than their private-sector counterparts. That’s an unsustainable and unfair difference. Bureaucrat pay should be aligned with what’s paid in the private sector, saving taxpayers money and reducing the pressure to raise taxes.
By limiting government pay to comparable private-sector levels, the province can prevent further debt accumulation while ensuring fairness for all Nova Scotia workers. Much of this can be achieved through attrition and offering lower salaries for new employees.
It’s time for Houston to get serious about fiscal responsibility. Returning to budget surpluses, cutting unnecessary spending and limiting government sector pay are key steps to avoiding a future where Nova Scotians are bogged down by debt and higher taxes.
Nova Scotians deserve a government that lives within its means, and right now, the Houston government is missing the mark.
Devin Drover is Atlantic director and general counsel of the Canadian Taxpayers
Federation
