No Cuts to Health, Education
Nova Scotia will not cut health care or education to balance the budget, Premier Russell MacLellan declared today in his annual State of the Province address.
He told the Metropolitan Halifax Chamber of Commerce that events outside the province's control -- including a record-low Canadian dollar -- have conspired against the province's balanced-budget plan for this year, but he rejected cuts to essential public services or higher taxes as answers to the budget problem.
"The balanced budget the finance minister forecast in June is slipping into the red. It that cause for concern? Yes. Is it cause for alarm? No," the premier said.
"The bigger, more relevant question is: how do we achieve long-term financial stability? How, in the foreseeable future, can we balance the budget every year?"
Premier MacLellan said his government rejects "an unending cycle of public sector cuts" or higher taxes as options. He said there is a "third option (which) requires a longer-range view and demands confidence in our present ability to shape our future prospects. My government has that confidence."
The premier identified offshore gas, a growing export economy and the knowledge-based sector as great economic opportunities for Nova Scotia.
"Simply stated, the third option is to grow an economy capable of sustaining quality health care, education and other essential services -- an economy capable of offering hope to every Nova Scotian who wants to work."
Noting that Nova Scotia's economy is now outperforming the national economy, the premier said government could kill that success by shocking Nova Scotians with another round of cuts, or by attacking the economy by raising taxes.
"Let me be clear. We must, and we will, practise consistent, sound, responsible financial management. We will keep government spending in check. But, at this time in our history, we must also be willing to wisely invest in our future. We must work to spread this new found economic success to all corners of the province. We must encourage confidence among Nova Scotians. And we must provide Nova Scotians with the tools they need to make the most of their lives."
The premier laid out the financial challenge facing the province, noting that health care now costs $1.5 billion annually; education, another $1 billion; debt payments, $700 million; and social services, $500 million. Together, those expenditures consume 87 per cent of the provincial government's revenues.
He said health care will not be cut, and "we hope and expect" Ottawa will begin to restore some of the $320 million it has removed from health care in Nova Scotia. But with baby boomers reaching middle and approaching old age, health care costs can be expected to increase over the longer term. Increased federal funding will only relieve the pressure, it won't result in less provincial spending.
"We will not cut education. In fact, we believe our investment in education should increase so that every child gets the attention he or she needs. And so that child can grow up and graduate from university without a mountain of debt."
Premier MacLellan noted that the province's $700-million annual debt payments were pushed higher than anticipated by the low Canadian dollar. Much of the province's debt was borrowed in American dollars during the 1980s. "Our debt costs are non-negotiable."
He said the province will continue to meet its social obligations, but a greater share of social services dollars will be spent on programs that fight child poverty.
"Every Nova Scotian child, regardless of economics, has a right to a good start in life."
The premier also reminded the chamber of his government's management record over the past 12 months.
"We closed the books on one balanced budget and brought down another. We also successfully concluded more than 45 collective agreements with five different unions representing some 40,000 public sector employees. That achievement is unprecedented in our province's history. It was accomplished responsibly on all sides, without jeopardy to you, the taxpayers."