Murphy’s Logic: Cuts and resource dreams won’t solve N.S. debt

Nova Scotia Premier Tim Houston speaks to reporters after the provincial budget was tabled at the Nova Scotia legislature in Halifax, Thursday, Feb. 29, 2024. THE CANADIAN PRESS/Darren Calabrese

Tim Houston is a rarity among politicians, a chartered professional accountant elected to lead a provincial government in this country.

As an active member, a fellow of the Chartered Professional Accountants of Nova Scotia (according to the organization’s online registry), he understands the principles of accounting and budgeting and knows from experience how to read a balance sheet.

One suspects that hasn’t always been the case with people who find themselves catapulted into top jobs in government from other professions, having made promises they couldn’t afford to keep.

When he was first elected, Houston frankly admitted he was willing to spend a great deal of money to fix the health-care system, even if it meant going into deficit to do it. But at the same time, he promised a return to balanced budgets in six years. He’s made good on the promise to spend big – but has now apparently abandoned the commitment to balance the books.

Having already added about $10 billion to the taxpayers’ debt since coming to power, he now promises to have doubled it by 2030. That’s in spite of relatively modest spending cuts that propose to eliminate public service jobs and reduce government grants in each of the next several years.

The premier says he’s simply doing things that need to be done and should have been done by previous governments. There is some truth in that. Long-term care and housing have long been neglected, and the Houston government was given a mandate to “fix health care.” Spending in those areas might well have justified modest deficits – at least in the short term – but Nova Scotia is now into a cycle of large deficits, with no foreseeable end in sight.

Meantime, the interest cost on the accumulated debt is approaching a billion dollars a year, money that can’t be spent on anything that directly benefits taxpayers.

Houston’s government also found ways to spend the hundreds of millions of dollars in additional revenue that resulted from booming population growth, rather than setting aside at least some of it for the proverbial “rainy day.” We used to call that “not letting the money burn a hole in your pocket.”

And perhaps worst of all, even as the government spent money if didn’t have, it unwisely decided to give up hundreds of millions of dollars a year it did have, by reducing the HST and eliminating Halifax Harbour Bridge tolls and hospital parking fees. Those things were done for strictly political reasons, proving that as a politician Houston is by no means a rarity. This simply cannot go on. The painful certainty of the growing burden of debt cannot credibly be set by the optimistic prospect of potential revenue from unproven resource development.

Tim Houston, the chartered professional accountant, surely knows that.