Maybe the media are trying to level the playing field for the official opposition after giving two Liberal Premiers months of mostly positive pandemic-related airtime. Or perhaps it’s because they no longer have the newsroom resources to analyze or fact check election promises. Whatever the reason, it’s astonishing that it took until day 22 of Nova Scotia’s a 32-day election campaign before anyone in the mainstream media turned a critical eye toward the “Better Paycheque Guarantee”(BPG) being promoted by PC Leader Tim Houston.
In all my years of observing, covering or working on election campaigns I’ve never seen anything quite so, um, eccentric, make its way into a party platform. The idea is to give corporations the choice between paying their full taxes to the provincial government or holding back up to 50 percent of taxes owing and distributing the money to employees – or in Houston-speak “their team.” This is supposed to boost wages and raise Nova Scotia’s chronically low income levels.
When I read about the proposal an old joke came to mind. It was about an admiral in some distant war who came up with the idea of destroying enemy U-boats by heating up the ocean so they’d be forced to surface, becoming sitting ducks for bombardment. Asked how he proposed to heat up the ocean the admiral said that was a matter for operations – he was in policy.
The operational side of the Better Paycheque Guarantee (BPG), while not quite so daunting as heating up the sea, conjures up images of a flotilla of Tim Houston’s fellow accountants sallying forth into the bowels of big business in an effort to keep track of profits and payrolls to ensure that every dollar kept from the grasp of the taxperson goes into the pay packet of the lower paid 80 percent of the “team.” Good luck sorting that out.
Operational practicality aside, as policy, destroying enemy subs seems like a good idea during conflict. But even if you could make the BPG work, would it be a good policy? Gary Burrill and the NDP don’t think so, having circulated a statement calling it “a gimmick and a corporate tax break for big business.”
Perhaps that reaction’s to be anticipated coming from the NDP. What has been unexpected is the fact that when the mainstream media eventually got around to due diligence on the policy ramifications of the BPG, the inquisitor was Chronicle-Herald columnist Bill Black. A near miss contender for the Conservative leadership 16 years ago, a former head of the Halifax Chamber of Commerce and the boss of Maritime Life before it was taken over by outsiders, Black likely knows a bit about the operations of corporations – especially those who make money, pay taxes and build “teams.”
As may be expected from someone of Black’s pedigree, the critique of Houston’s Better Paycheque Guarantee was low key, and buried deep in his Saturday column in the Herald. But it was no less devastating.
First off, the thing is expensive. According to Black, employers will have more than $300 million to divert from taxes to payroll costs – even more than the price tag suggested by the NDP. And who are the employers most likely to take advantage? We don’t know for sure because tax data’s not made public. But according to Bill Black “a good guess would include the big banks, Emera, Michelin, Municipal Group and other large employers.”
And how would these big employers treat the tax rebates from a PC government? According to Black, someone who has been there, this would happen.
“The annual increases they’d normally provide, together with hikes for people advancing in their job grade or being promoted, would use up a great deal of the incentive without creating any jobs.
“Small-business employers who pay very low taxes and employers in sectors who pay none would not receive much benefit from this program but would find it harder to compete for talent with the big taxpayers.” (italics mine)
So that’s the bottom line for the Better Paycheque Guarantee. A large drain on the public purse that will benefit mostly big business while creating few jobs in those businesses. At the same time it will make it more difficult for small business to attract or retain talented employees. And small businesses – firms of fewer than 100 employees – provide three quarters of the private sector jobs in Nova Scotia. Many of those jobs are low paid. For the workers who hold those jobs, a stable employer and a higher minimum wage would be a much Better Paycheque Guarantee.
Bill Black calls Houston’s big idea “a very expensive way to achieve, at best, a modest impact.” Perhaps he’s being too kind. Someone else might take a critical look at the BPG and conclude that anybody espousing such a hare-brained scheme is not ready to take over leadership of the province.