Categories
Politics

The Activist Senate

The intervention of the Canadian Senate in the passage of Bill C- 14 highlights a serious and emerging problem. More than that it highlights the careless inexperience of our new Prime Minister.

Bill C- 14 is the Assisted Dying Legislation mandated by the Supreme Court of Canada decision that found or identifies that the ‘right to die’ is a protected right of the citizen under the Charter of Rights and if government wants to provide limitations or guidelines for those who would be involved in the decisions and execution of such decisions, that they need to do so in a timely fashion.

The House of Commons recently passed a version of the bill which was passed on to the Senate for passage as required in our constitutional bicameral arrangement.

But the Senate to whom the Bill was sent is not the Senate of yesteryears. Then, the Senate collectively and Senators individually understood they were not elected and had no mandate to interfere with the decision of the elected Commons. They were a ‘sober second chamber’ populated for the most part by sober, senior members of the political parties who appointed them, understanding their duties to approve the legislation sent to them for approval by the Commons.

Today it appears we have an interventionist Senate, an activist Senate, a Senate that is populated by many Senators who feel they are ‘independent’ of….. well anyone.  Indeed, the former Liberal Senators are independent since their Leader (before he became PM) unceremoniously kicked them out of the Liberal caucus two years ago and declared that henceforth they would be Independents. At the time, he said he wanted the Senate to be nonpartisan. However, his real motivation for doing so seemed clear. He wanted to avoid the Liberal brand having any responsibility for the fallout from the Senate expense claims scandal that was erupting to the embarrassment and shame of many Senators and those responsible for putting them there. Senators receive their appointment to the upper chamber by the sitting Prime Minister of the day – roughly accounting for significant numbers of both Conservative and Liberal Senators in the Chamber at any given time. Most of those individuals had prior political involvement or otherwise enjoyed some degree of political experience and appreciation for the role of an appointed and unelected legislative body.

This then was Mr. Trudeau’s answer to a political problem that he was facing or thought he would have to face and didn’t want to face all dressed up as progressive change.

At the time a few of us predicted what would unfold. Based on his lack of understanding of the constitutional dynamic governing the nation – upon being cut loose and made ‘independent’ some of these capable Senators would indeed decide to think and act independently of the Commons and any direction from their former Leader.

In his grand emancipation, it was reported that he had not consulted with his caucus or his party in making the decision. It is clear Justin Trudeau had not consulted with his Liberal Senators – the decision came as a shock to them. Indeed at least one Senator, in reaction, commented that he was a Liberal and Mr. Trudeau had no right to say otherwise.

At the time, some few of us wondered about his apparent lack of understanding of the constitution and the constitutional arrangement that over time had ensured that the Senate’s role was both muted and compliant of the wishes of the elected House and the government of the day.

Many Canadians are unhappy with the Senate. Most would agree it is a seriously flawed institution – an unelected, unaccountable chamber of politicians who are appointed to serve without term limits or recall to age 75. The purpose of the Senate historically was to provide regional representation and balance for the elected Commons, but those origins were rooted in a nascent democracy when most ‘commoners’ were not trusted with the franchise (women for example). Times have changed. It is time we acted like a grown uo democracy.

Many would like the Senate abolished or otherwise reformed. Unfortunately it is enshrined in the constitution and any change to its role or even existence would require a constitutional amendment. And it is not surprising that our ten provinces and federal government cannot agree on what a reformed (perhaps elected) Senate would look like or do.

But the situation that endured over the years, not without the occasional bump, made for a de facto working arrangement that was not too offensive to even those who seek change. This was precisely because that Senate was not activist, interventionist or Independent. Senators understood that notwithstanding their ‘constitutional ‘ entrenchment, they were not a democratically mandated institution and their talents best lay in giving a sober second look to legislation and encourage useful amendments to the government of the day.

The issue is not whether the Senate is right in any given instance. It is whether this country – a democracy – will be governed by an unelected legislature. The Commons may be wrong, but they have a mandate to be wrong and can be held accountable at the next election.

It won’t end with Bill C-14. An independent Senate indeed will be an undemocratic institution and will likely lead at some point to constitutional crisis. Our inexperienced and impulsive Prime Minister opened a Pandora’s box. Thank you Mr. Trudeau.

Categories
Politics

The Holiday

The MacNeil government has gifted a new holiday to all Nova Scotians. The third Monday of February will henceforth and forever be a provincial holiday for Bluenosers. Although originally thought of as a ‘family’day, it is officially designated as Heritage Day with each year a different Nova Scotian of note being the honouree of the day.

There will of course be some kind of competition for the honour of the day name but ultimately the name of the day will be of import to those involved in that process and not to most others. But we didn’t need a holiday to honour the hundreds of former citizens who will be in competition for the position. We could have simply named the day and not make it a holiday.

Our government deserves a big thank you from a grateful citizenry.  Holidays are wonderful – you don’t have to work or if you do you get paid extra. But of course, there aren’t nearly enough of them.  So it makes you wonder. Why don’t we have more of these holidays. And why did it take so long to get this ‘family day’ in place to break up the long winter months? We have been talking about it for at least the last twenty five years.

Well, there is a reason why we don’t have a holiday every week and why it seemed to take forever to obtain this new addition to the lists. Its called the economy. Every holiday affects productivity or the cost of productivity. And as it turns out, when government gives us a holiday, they didn’t actually give us anything. We citizens pay for the holiday. We pay directly because we close our businesses and have to pay to make up the loss of productivity later, or if the business has to stay open then employees are paid extra for working a holiday. This all has an impact on employment and income.

But we also pay increased taxes or more indirectly suffer the knowledge of assuming the greater debt burden accumulated by the province. For public servants – teachers, civil servants, health care workers –  it is paid holiday. Vital work is not being done that day. Schools are closed, government offices are closed. For those services remaining available for citizens, the employees who must work are paid double overtime.

We citizens pay for the lost productivity and the extra wage costs . And there is a cost to lost productivity – we either make it up with additional work performed at some other time – overtime perhaps – or we pay for it on the lost service. Interestingly, one wonders whether the school year will be extended by an additional day. Given the well known correlation between the length of the school year and performance on international testing and the recent tests results of students in this province, it is surely on governments agenda to ensure our students futures do not suffer as a result of this.

What is truly remarkable is that for the past several years a great many words have been uttered and profusion of ink spilled in the collective anxiety ensuing from the publication of the Now or Never Report on the Nova Scotia economy. We are, it is reported, in dire straits. Our demographics, our public debt and our economy are all moving in the wrong direction and the clock is ticking on a kind of doomsday scenario – at least for anyone who wants to live in Nova Scotia twenty years from now. The MacNeil government adopted this report and have been working assiduously to develop a plan to implement a cure for these collective ills.

So how exactly does this new holiday fit with this planning? How will this new time off improve our demograhics, eliminate the public debt, make our civil service more efficient, improve health care, advance student education and test scores, assist small and big business and generally strengthen our economy?

Categories
Politics

Balancing The Budget

Election 2015 is shaping up, at least on fiscal policy, as a choice between pro-deficit and anti-deficit. Justin Trudeau says the government he wants to form will run three consecutive deficits. Mr, Harper and Mr. Mulcair say they will balance their budgets and in articulating what they will do are very clear that deficit budgets are contrary to the needs of this economy and the interests of Canadians. Mr. Trudeau contends that deficit spending, particularly on public works/infrastructure projects is necessary to stimulate a slow growth economy.

It is noteworthy that the other two leaders are committed to extensive infrastructure spending as a well, perhaps not as extensive, but with billion dollar price tags nonetheless. Indeed, Mr. Harper can claim to have already invested billions in public works in the course of his tenure.

The issue then is not whether we spend money on these public works projects – everyone agrees there is need for renewal just to maintain what we have and for new investment, particularly in the area of transportation. This is not a matter of stimulating the economy, but a matter of necessary spending. And it is axiomatic. If you spend money on capital infrastructure, you will provide some stimulus for the economy – with jobs creation and materials acqusition. That is not really the issue.

The issue is, what is the correct level of government spending – not on public works – but on everything. What no one is talking about but we need to talk about is the effect of spending beyond our means.

In the context of the nation what does it mean when we aren’t able to balance our budgets. It means we accumulate debt. And just because it is government debt does not mean there aren’t consequences for the average citizen. The consequence?

Simply stated and cutting through mind numbing numbers and statistics, the answer is easy to grasp. The effect of many years of deficit spending, always for essential public purposes, always to achieve national priorities, has resulted in the current federal public debt of over $616 billion and counting. This is $17, 242.00 for every man woman and child living in Canada. Servicing that debt – interest costs- consumed 10% of the federal budget in the 2013 -2014 fiscal year. This is some $28.2 billion for that year.

Servicing the debt – the interest we pay on our debt – is money obtained from citizens every year in the form of taxes – the same taxes that are needed to fund programs (including infrastructure projects). In Canada, the public debt today (the federal government and provinces combined) is over $1.2 trillion. It is an astonishing number. And it continues to grow because too many politicians find it easier to borrow and spend than to say no.

They don’t seem to appreciate that saying no to this generation means saying yes to the next. And they don’t seem to appreciate what we could be doing with those billions of tax dollars today if we hadn’t spent it yesterday.

Unfortunately, promises made in the euphoria of the campaign are often not honoured in the aftermath. And campaign mathematics is always a little fuzzy.

The trouble with announcing you intend to engage in deficit spending is that you will and likely in a much bigger way than you intended. When it comes to fiscal policy, there are always more demands for spending than sources of revenue. At least when you promise to balance a budget, the reality might more closely resemble the promise.

Balancing the cheque book is an end in itself. And avoiding deficits should be a national priority.

September 20, 2015

Categories
Politics

No More Half Measures – Nova Scotia tax and spending reforms

Nova Scotia is in economic and demographic decline.

At the root of the problem are the public finances. Our taxes are too high. We can’t control our spending. Our present level of public services is unsustainable. Our provincial governments have been running serial deficits and have grown the public debt to a projected $15 billion. Interest on that debt approaches $1 billion annually.

It did not happen overnight. Nova Scotia has been a have-not province for decades, the recipient of grants from the federal treasury that now is almost $3 billion annually. This pays for what we cannot pay for ourselves — health care, education, social services.

We can rake over the history and there are lessons. The reality is that in a competitive world, Nova Scotia is not an attractive place to do business or to find a job.

We are overtaxed and over-regulated. Our political parties have failed us. They have contributed little in the way of public policy and regularly deliver mediocre candidates for public office.

Governments have failed us. There have been too many inept or timid MLAs and cabinet ministers. Some lacked ability, some the courage of their convictions. The “vision thing” has been lacking for a long time, but successive governments have not even been good stewards of the public purse.

The reason we are in this fix is failure of leadership. The answer to these problems is also leadership.

A notion of a unity government has been floated as if this will provide the answer. It is exactly the wrong approach. Such an approach entrenches mediocrity and reduces transparency.

We have a long-established system of democracy that is messy, but it works. We need a strong government with a positive articulated agenda. We need a strong opposition that will challenge government in a proactive and constructive fashion. This will be no bandwagon. There will be difficult decisions to take. It will hurt. Many people will be unhappy and upset. There will be more marches on Province House.

What must government do now?

We must reduce personal and business income taxes in Nova Scotia as well as sales taxes to well below the national average. This is essential in order to become competitive. Reducing taxes also creates jobs. If our youth cannot stay, then neither will immigrants come.

To reduce taxes, we must reduce spending. When spending is reduced, deficits are eliminated. When deficits are eliminated and public debt is managed, taxation can be reduced. Then government has the flexibility to act. The province can invest in targeted and essential infrastructure, research and development.

The provincial government needs to ensure that municipal taxation is restrained.

This will mean the encouragement of municipal amalgamation and the discouragement of municipal government extending its reach into areas that do not involve the delivery of essential municipal services. This requires oversight and legislation.

In order to gain control of spending, the provincial government needs to address in a comprehensive fashion the cost of public sector employees. Temporary restraint measures, such as wage or hiring freezes are only a stopgap measure.

The size of the public sector needs to be rationalized. Public-sector wage increases need to be constrained, not only within the limit of inflation but also within the limits of economic growth.

Ultimately, public-sector compensation should be tied to private-sector compensation. There is no logical reason for the taxpayers, as employer, to pay compensation to public sector employees beyond what the private sector taxpayer earns.

Public sector pensions require urgent address. In 2011, the provincial budget took a charge of $536 million to fund the underfunded public sector pension plan. This charge was largely responsible for the huge deficit of that year. This and previous similar periodic bailouts (costing hundreds of millions of dollars) to the public service and teacher pension plans are major contributors to our looming $15-billion accumulated debt.

The way government has permitted these plans to be funded has been grossly unfair to the general taxpayer. These unsustainable public sector defined benefit pensions must be abolished and replaced with accountable, self-funded, defined contribution plans which are common in the private sector.

We do not need to wait or consult for 10 years. These tax and spending reforms are really “Now or Never.”