The following is an Opinion Editorial from Devin Drover, the Atlantic Director and General Counsel with the Canadian Taxpayers Federation.
Premier Tim Houston’s government is asking Nova Scotians how to build the next provincial budget.
Here’s an answer that fits on a sticky note: Stop borrowing money.
The provincial government opened budget consultations this month, with in-person and virtual sessions across the province and an online tool Houston claims will give Nova Scotians “the information they need to help build their own budget.”
Good. Let’s start with the information.
Every family in Nova Scotia already knows the rules of budgeting the government keeps breaking: Add up what’s coming in and don’t spend more than that.
And if you’re in a hole, stop digging.
The Houston government fails that test every year.
This year’s budget plans to spend $18.9 billion while collecting $17.3 billion from taxpayers. In Houston’s first year, the government spent $13.7 billion. That’s a 38 per cent spending increase in five years, a pace no family budget could survive.
To cover the gap, the government is irresponsibly borrowing $1.2 billion this year and pushing the debt to $27.9 billion by year-end. That works out to about $25,000 for every man, woman and child in the province. And on the Houston government’s own plan, the borrowing continues for years to come.
The key thing for taxpayers to always remember is that this debt isn’t free.
Debt interest charges will cost taxpayers more than $1 billion this year, or more than $2.8 million every single day. That’s roughly $900 for every Nova Scotian that’s gone before the government hires a single teacher or paves a single metre of road.
And it gets worse.
The debt climbs to about $36 billion by the end of the decade, based on the government’s own projections. By then, debt interest charges will swallow nearly eight cents of every dollar the government collects. The hole keeps getting deeper, faster.
Even Finance Minister John Lohr admits the problem.
“Every dollar spent servicing debt is a dollar we cannot spend responding to new challenges or protecting essential services,” Lohr said in his last budget speech.
He’s right. So the government should stop pretending the borrowing is out of its hands while it isn’t.
The Houston government has already proven it can cut. The Service Efficiency Act, introduced this month, scraps needless boards and duplicate approvals, and the government says its red-tape cutting has saved taxpayers $21 million. That’s a good start. Now it needs to take the same knife to the budget.
Here’s how.
First, stop handing out corporate welfare. Nova Scotia taxpayers are on the hook for more than $674 million annually in business subsidies. Cutting red tape helps every business compete. Cutting corporate welfare will too.
Second, bring non-health spending back to 2022 levels. That would save about $848 million in a single year while protecting the government’s stated priority of improving health care.
Third, tackle bloated government compensation costs. Salaries and wages are now tied for the largest line item in the budget. Bringing pay in line with the private sector through attrition and reform could save another $544 million.
Add it up and those savings are far more than this year’s borrowing. That means a balanced budget with money left over to start paying down the debt itself. Every dollar of debt repaid cuts the interest bill forever, and that’s money that stays in classrooms, hospitals and taxpayers’ pockets instead of flowing to bondholders.
The government asked. Nova Scotians should answer, at the sessions, through the website and loudly.
Stop borrowing. Deliver a balanced budget in the spring and stick to it. Start paying back what’s owed instead of sending the bill, plus interest, to kids who have not even been born yet.
When the government asks Nova Scotians what to put in the next budget, the answer is simple: less.
Devin Drover is the Atlantic Director and General Counsel with the Canadian Taxpayers Federation.