Last week’s Nova Scotia budget, the eighth from the McNeil Liberals, was greeted by most as a pre-election offering. That may yet turn out to be the case, but to my eye, the 2020 budget more closely resembled the one brought in a year before the last provincial election. That 2016 offering, coming only a few months after Justin Trudeau and his sunny ways temporarily captured the hearts of Nova Scotians, tried to put a smiley face on a provincial Liberal government that had spent the previous two-plus years preaching austerity. Dubbed “Working Together for a Stronger Nova Scotia” the 2016 budget highlighted initiatives in child care, income assistance and disability supports.
As discussed here, those turned out to be mostly empty promises. But that hasn’t stopped the government from trying that ploy again in the latest budget, with a snappier but sappier title “Better Together.” The 2020-21 budget covers much of the same social policy ground as the 2016-17 budget did, with the politically necessary addition of some initiatives on affordable housing. The promises, under the heading “Improving the Lives of Nova Scotians” received top billing in the Finance minister’s budget speech.
In light of the budget’s $70 million tax cut for large corporations the government is vulnerable to a charge of tokenism. But another theme that emerged from both opposition parties was, why now? If these initiatives are so good, why have you waited so long? As NDP finance critic Claudia Chender put it: the budget reads like a deathbed confession. Indeed it does. Looking closely at three key areas the inescapable conclusion is – to mix metaphors – that like Scrooge, the Liberals have been visited by the ghost of budgets past and have decided that at least a show of repentance is in order.
Let’s start with poverty reduction, a touchy subject ever since last year’s annual Canadian Income Survey found Nova Scotia poverty rates going up as national poverty was going down. Five years into an amorphous “transformation” of anti-poverty programs the budget claimed a couple of big advances: an additional $17.3 million to fund the new Standard Household income assistance rates as well as an $18 million expansion of the Nova Scotia Child Benefit (NSCB).
On available evidence, smoke and mirrors prevail, both in terms of overall spending and the impact on income assistance recipients. With regard to the former, the proposed increase would for the first time bring spending on income maintenance above the $256 million mark reached in 2013-14. Between that budget year and 2019-20, as overall provincial government spending increased by almost 20 per cent, spending on income assistance dropped by 1.4 per cent. So an additional $17 million – if in fact that turns out to be the correct number – is a pittance to ward off that particular ghost.
Table 1:Income Maintenance Spending by Year (million $)
Source: Public accounts 2013-2019; budget estimates 2020
As for the impact on people, the Liberals are showing even less remorse. In a presentation to the Law Amendments Committee of the legislature last year, lawyer Vince Calderhead exposed the unfortunate reality of the income assistance rates resulting from the Liberal transformation reforms. According to his figures, when inflation is taken into account, the reforms left clients with less purchasing power in 2020 than they had when the reform process began in 2014. Erosion of purchasing power ranged from $5.70 monthly for a single adult with a disability to $70.34 a month for a couple with two children ages 10 and 15.
On first glance, the expanded Child Benefit looks like a dramatic reversal of the reality exposed in Calderhead’s calculations. The Premier tends to boast, Trump-like, that such and such an increase is the largest in the province’s history. The increase in the Child Benefit certainly makes a great talking point – a jump of nearly 75 per cent this coming year, from $24.5 million to $42.8 million. However, history is a double-edged sword, exposing a blot on the Liberal record.
Until this budget, expenditure on the Child Benefit dropped every year under the Liberals, from $26.4 million in 2013-4 to $24.5 million this year. And despite the hype, the increase only partially offsets the effect of inflation on income assistance clients with children. For example, instead of losing $57.17 a month to inflation, a single parent with a two-year-old child will lose only $32.17. And thanks to the expanded benefit, the couple with two children will see their loss due to inflation reduced from $70.34 to $45.34. If families who need income assistance in this province have more now than they had six years ago, it’s thanks to the federal government’s Canada Child Benefit, not the province’s efforts.
And the way in which the new money is being spread around does little to help the poorest of poor families. Most of the new spending is going to expand eligibility to include an additional 6,100 families with incomes from $26,000-$33,999 with a smaller amount directed to raising benefits for 21,800 families with incomes below $26,000. According to a Community Services chart published by the Nova Scotia Advocate increases for lowest income families will be modest. For example, a family with three children and income of $18,000 will receive the maximum of $215 a month, an increase of only $19 a month. A previously ineligible family ($26,000 income or more) with three kids will see a monthly increase in income of $145. But even that increase still leaves families at the $34,000 cutoff more than $4,000 below the poverty line.
The deathbed repentance theme is equally apt in regard to housing. According to budget estimates, the Liberals plan to increase spending by nearly 50 per cent next year, bringing it to over $100 million. This would be the third straight year of increased provincial spending on housing, but it comes after years of declining or stagnant transfers to Housing Nova Scotia.
Table 2: Provincial Revenue to Housing Nova Scotia, by year (million $)
Source: Housing Nova Scotia annual reports
As the table shows, it was not until 2017-18 that provincial transfers to Housing Nova Scotia reached the levels they stood at when the Liberals came into office. And while spending lagged, the quality and availability of housing in the province deteriorated. According to Statistics Canada (Table 46-10-0043-01) in 2018 Nova Scotia had a larger percentage of its social and affordable housing in need of minor or major repairs than any other province. Out of 16,400 such units, 27 per cent required minor repairs and 12 per cent needed major ones.
As for availability, the lack of affordable housing has appeared with a vengeance in Halifax in the last couple of years. The Liberals opted to tackle long-standing waitlists for affordable housing by increasing rent subsidies, only to be bushwhacked by a sudden surge in population and a shortage of affordable rental units. A solution, in the form of a significant increase in social housing units, is not in sight.
Although the housing minister tosses around big dollar figures, the NDP says the surge in provincial spending this year and next will add only 39 units this year and 131 over the next three years. A large part of the government’s housing initiative involves tackling homelessness and the threat of homelessness by hiring a team of housing support workers. But as the opposition aptly pointed out, those workers will have a tough time doing their jobs, especially in Halifax where skyrocketing rents and near-negligible vacancy rates are the rule.
The Liberals may have no choice but to keep spending on housing. The Trudeau government’s National Housing Strategy helped to put the issue back onto the political agenda. But as discussed here the national strategy is unlikely to significantly increase the supply of social housing, putting pressure on the provincial government to deliver.
In contrast with housing, which flew below the radar until the National Housing Strategy raised expectations, Liberal budgets have frequently mentioned the Disability Support Program. Unfortunately, it has been mostly empty talk. Changing the program over ten years from one beset by long waitlists and over-reliance on institutional care into a community-based system to serve adults with mental disabilities or long-term mental illness was an initiative of the NDP government. The McNeil government adopted the policy direction laid out in the Roadmap report by a joint government-community advisory committee, but almost seven years later progress has been painfully slow.
Successive budgets, beginning in 2016, have earmarked funds to help people transition out of institutions into the community. There has been some reduction – from 550 to about 500 – in the number of adults living in large institutions. But the overall waitlist for service has grown from 1,100 to nearly 1,600, and about half of those are waiting to move to a small option home in their community.
In their 2017 pre-election budget and campaign platform the Liberals advanced a token promise, creation of eight small option homes, serving up to 32 people by 2019. Thus far only six are open or close to opening. Two others are on the drawing board and no additional small options have been announced, despite calls from advocates for the addition of at least 25 a year to meet the needs of young adults living with aging parents. In that regard, the latest budget continues a pattern of postponing the required response with small increases in Flex, a nebulous program for those living at home with their families.
A second initiative in the budget – transitioning 50 residents from institutions into the community – is probably a panicked response to the 2019 finding of a Human Rights Commission Board of Inquiry. The inquiry concluded that the province discriminated against three people by keeping them in an institution for many years instead of providing community supports. In addition to the 50 promised for this year, the budget address commits to “increasing numbers and investments in each of the following years and beyond.” If this actually comes to pass it would be a good thing, finally fulfilling at least one of the goals of the Roadmap.
However, there are several reasons to hold the applause. For starters, there is past performance. It has taken the better part of seven years to bring about the modest number of transitions from large institutions that has already taken place, with the government justifying its slow pace by citing the complexity of the task. And even the tiny increase in small options capacity, promised during the last election campaign, is well behind schedule. In addition, there is still no plan – beyond the bandaid of the Flex program – to deal with the growing waitlist for supported community living.
Another reason for skepticism is one that applies to all of the commitments grouped in the “Improving the lives of Nova Scotians” category. These needed improvements have long been identified. The Liberals have even paid lip service to many of them in previous budgets, but significant investment lost out to balancing the books. As the finances of the province improved over the past couple of years the Liberals chose other priorities – a cut in personal taxes, the Yarmouth ferry, rural internet and now, the crowning touch, a $70 million tax cut for large corporations. If the Liberals were really serious about improving lives it would be the corporations made to wait, not Nova Scotians in need. Should the budget tabled last week and being rushed through this week turns out to be a pre-election one the Liberals will have to justify their misplaced priorities on the campaign trail.
[i] This number is shown in the printed estimates. As can be seen by comparing it with estimated spending for 2019-20 it’s only an $8 million increase, not the $17.3 million discussed in the budget. A department staffer explained the discrepancy as an internal operational issue.