Heath care contract: adding and subtracting
Last week’s to-the-edge-of-the-ledge, past-the-last-minute contract settlement between Capital Health and its 3,600 health workers raises all sorts of difficult but intriguing questions.
The first, and most immediate, of course, is could the disruption—even without an actual strike, the anticipation cancelled 560 elective surgeries and emptied 172 beds—have been avoided?
The short answer is probably not. Both sides have legitimate, vital interests in the outcome and only the combined pressure of a looming deadline and smacking up against the real-life consequences of not settling creates the conditions necessary for compromise.
So long as there is collective bargaining, we will have brinkmanship.
But should we even have collective bargaining in health care? Let’s come back to that.
Is the settlement fair? We won’t know the full financial implications until an arbitrator picks either the union’s (nine per cent over three years) or the province’s (6.5 per cent) final position. The province’s finance department has undoubtedly already crunched both scenarios, so Premier Darrell Dexter should disclose them so we can discuss their merits now.
This year’s provincial budget includes a $199-million “restructuring” line item, supposedly to cover contract settlement contingencies above the government’s hoped-for one per cent salary increases, so the deal may not deflect the government’s goal of balancing the books by next year. But it will raise the bar for other public sector workers.
Other numbers also come into play when asking if the settlement makes sense. Nova Scotians’ cost of living increased by 3.7 per cent last year while wage settlements barely nudged 0.4 per cent. Even the union’s final demand just keeps pace with cost-of-living increases.
One more, different set of “numbers:” the settlement calls for an across-the-board wage increase, meaning those at the lowest end of the union’s 100 or so different job categories—those who need more most—will get the least. How fair is that?
Back to collective bargaining and essential services. Given that the final salary settlement ended up in the hands of an arbitrator anyway, why not cut to the chase and ban strikes in health care?
That, my friend, is a whole other discussion. What do you think?
Copyright 2012 Stephen Kimber
Debt? What debt?
The thing I don’t understand—one of many actually, but let’s start with this one—is whatever happened to the debt?
Whenever governments decide to put us on short rations—as the NDP did after it came to power in 2009, as the federal Liberals did in the 1990s—they do their best to frighten us into submission with the double-whammy bogeymen of unsustainable annual deficits and future-defying, long-term debt walls.
But then, as soon as they tame the former, they quickly forget the latter lives on.
How else to explain Darrell Dexter’s pre-budget good-news announcement last week? The province is declaring a balanced-budget dividend and will soon begin lowering the HST it raised to slay the deficit dragon Not to forget eliminating the large corporation tax, cutting the small business tax and throwing in a few tax-credit bones for good measure.
Tucked in a forgotten drawer of the next day’s budget speech was the reality that, despite declining annual deficits, the province’s net direct debt will actually increase from $13.3 to $13.7 billion by the end of the coming fiscal year.
That represents a $14,547 hobble for everyone of us, infants and the elderly included. And paying just the interest—$881 million a year, or about 10 per cent of what government departments spend on actual services—“crowds out government activities from sectors that it should be more active in, from education to social welfare to economic development,” as the government’s blue-ribbon economic panel of economic advisors succinctly put it back in 2009.
The NDP isn’t alone in ignoring the debt.
Tory leader Jamie Baillie, who hasn’t met a tax he wouldn’t cut, was puppy eager to slash the HST deeper and faster. Oh, yes, and balance the budget yesterday too. Debt? What debt?
Liberal leader Stephen McNeil wants the government to cut the gasoline tax.
Business leaders—who pretend they know how to read a balance sheet—clamoured for even more tax cuts… for themselves.
No one, it seems, wants to talk about the debt. Or, alternatively, restoring some of the public services cut in the name of restraint.
And so the debt grows. Until the next time a government needs to scare us with an even bigger bogeyman.
Copyright 2012 Stephen Kimber
Nova Scotia budget: the cost of cutting v the value of investing
In the all-too-brief interregnum between Thursday’s bad-news federal budget and tomorrow’s more-bad-news provincial budget, it’s worth noting the across-the-board, cost-cutting Kool Aid fiscal policy makers in Ottawa and Halifax have swallowed is not the only—or necessarily best—way to slay the deficit dragon.
The Nova Scotia branch of the Canadian Centre for Policy Alternatives, for example, a progressive think tank, recently released its annual alternative provincial budget. Its “Forward to Fairness” document calls for “strategic investments” while finding “creative ways to save money and increase revenue.” Instead of rushing to balance the budget in 2013-14 “to fit the timing of the electoral cycle,” the CCPA wants the government to stretch the back-to-balance timetable to 2015-16 to “reflect the actual fiscal situation.”
“Austerity does not come for free,” says the CCPA’s Nova Scotia director, Christine Saulnier. The CCPA says the government’s decision to cut $772 million in public spending over four years will mean the loss of “well over 10,000 jobs.”
By contrast, the CCPA’s approach involves investing $492.5 million in social infrastructure and programs, including everything from $40 million to establish 10 new community health centres, fund 10 more nurse practitioners and 12 more midwives, to $45 million to phase in an early learning and child care system and $21 million for rural public transit.
Where would the money come from to pay for all of this. Primarily by shifting the tax burden, says the CCPA, from low and middle-income taxpayers “to the upper 45 per cent of income earners, especially the top 10 per cent,” those who have gained the most in the past decade.
Graham Steele
Don’t expect to hear any of this on Tuesday. While the CCPA had what Saulnier calls “a serious and engaged exchange” with Finance Minister Graham Steeele, the finance department “has framed the problem and the solutions in a way that precludes our proposals. In other words, they see declining enrollment in P-12 as a way to justify cutting; we see it as an opportunity to finally catch up with the rest of Canada and begin to really address quality.”
Pity.
Copyright 2012 Stephen Kimber
Budget making 101… you be the finance minister
While not nearly as addictive as Angry Birds, spending a few hours with the province’s You-Be-The-Finance-Minister teeter-totter app—more prosaically known as backtobalance.ca—is entertaining. And depressingly, face-slappingly educational.
The government created the interactive online budget-making tool as part of its pre-budget consultations. It allows taxpayers to virtually raise and/or reduce revenues and expenses—and immediately see the bottom-line consequences.
Wanna play?
Let’s begin with the government’s starting point—a projected budget deficit of $390 million—and our own biases. Can we bring the numbers back to balance?
Finance Minister Steele consults
Perhaps like me, you think the rich don’t pay their fair share of taxes. According to Back to Balance, 9,000 taxpayers making over $150,000 a year currently pay the top personal tax rate of 21 per cent.
Go to the highest personal income tax rate bar on the page and slide the on-screen slider thingee a full percentage to the right. A little box pops up, telling you’ve raised $9.6 million. Just $9.7 million? A drop in the deficit drain.
Or perhaps you’re a delusional, cut-taxes-balance-the-books booster who believes corporations pay too much tax. Let’s lower the general corporate tax rate by one per cent. Oops. Now you have $25 million to make up somewhere else before you even begin to dent your deficit number.
You could get that much back by reducing granny’s nursing home bed budget by five per cent, of course, but can you do that to a fast-aging population? And granny?
Doctors—we spent $722 million on salaries and fees for 2,500 doctors last year—make up the second largest line item in the province’s $3.7 billion health care budget. We could make big savings here, but how many doctors would we lose if we did?
The point is that it’s all a zero sum game. And actions have consequences.
By the beginning of the month, the backtobalance website—the first of its kind in the country—had had close to 39,000 page views and 458 budget-making submissions.
I only hope they’re better than mine.
***
Match wits with reality at backtobalance.ca
Copyright 2012 Stephen Kimber
When in Yarmouth… Politicians and the Hypocritic Oath
Progressive Conservative leader Jamie Baillie was in high dudgeon last week when he took his summer road show to Yarmouth to warn business leaders there about the terrible costs to our grandchildren’s grand kids because of our socialist-horde government’s “stubbornly… swimming-against-the-tide” tax policies.
A slight exaggeration, perhaps, but it’s summer. And Baillie himself was attempting to generate maximum barbecue-season publicity for his third-place party from the fallow news-bite possibilities of last week’s eastern Canadian premiers’ and New England governors’ gathering.
“We sit around the table with the neighbouring jurisdictions, but when it comes to spending and taxes, we are uniquely going in the wrong direction,” Baillie harrumphed, parroting the currently popular, populist, less-government-is-better, no-government-is-best mantra. “We are surrounded by jurisdictions that are reducing taxes and containing the cost of government to create jobs and strengthen their economies. In Nova Scotia taxes are up, government spending is up and jobs are disappearing.”
Baillie’s Republican-loving, Tea-Party-aping, Harper-hoping-to-be cut-cut-cut speech might have sounded more sincere if not for the last phrase in the last, please-don’t-notice paragraph of the Tory press release previewing Baillie’s talk.
Baillie, it said, would “highlight the importance of our province’s longstanding relationship with New England and the economic isolation caused by the NDP’s decision to cut the ferry service.”
The Yarmouth-Portland ferry service? The one that a former Conservative government subsidized to the dance-that-jig tune of $18.9 million between 2007 and 2009, the one the NDP refused to give $6-million more of taxpayers’ dollars to in 2010, the one that the operators—not the NDP—cut after the company couldn’t get what it considered its fairest share of our tax dollars.
Yup, that ferry service.
All opposition politicians, of course, must take the Hypocritic Oath. It comes with the territory.
And there are, without doubt, sound economic reasons for subsidizing ferry service, which brought thousands of tourists and created hundreds of jobs in economically fragile southwestern Nova Scotia.
But to follow the logic of the currently ascendant no-government-is-good-government movement—see Jamie Baillie above, plus Rob Ford, Jim Flaherty, Michelle Bachmann et al—using taxpayers’ cash to prop up private businesses should be a bad thing…
No?
Unless, of course, you’re in Yarmouth at the time.
Copyright 2011 Stephen Kimber
And the rich get… tax cuts
Last week, news reports about three economic reports thudded into my electronic in-basket.
The first had to do with Canadian Business Magazine’s “The Rich List,” an annual compilation of who’s-worth-how-astronomically-much this week.
Toronto’s Thomson family topped the list again with a net worth of $23.36 billion—yes, billion!
As allnovascotia.com noted proudly, Maritime titans were well represented. Eleven regionally-based or connected masters of the universe made the top 100. Most did even better than the year before: the Sobey family’s net worth jumped 27.7 per cent to $2.14 billion, for example, while the divided McCains upped their fortunes by 13 per cent to $2.6 billion (Harrison’s branch) and 18.7 per cent to $2.29 billion (Wallace, godfather). Even the Irvings, who fell from second to third place, increased their net worth by 2.5 per cent to $7.46 billion.
Steve Maich, the magazine’s editor, told allnovascotia “there’s a hugely under-appreciated entrepreneurial culture in Atlantic Canada.”
Perhaps.
The Canadian Centre for Policy Alternatives also released a report last week showing that, as the Globe and Mail put it, “the gains from growth are increasingly concentrated in the hands of the rich.”
According to the study, the richest one per cent of Canadians gobbled up 32 per cent of all income earned from economic growth between 1997 and 2007, and now account for 14 per cent of all personal income, “a bigger cut of the action than any previous generation.”
On the flip side, the report notes Canada’s top tax rate in 2007 was half what it was in 1948—and been reduced since.
Uh…
The third thud came from the Fraser Institute’s latest survey of Canada’s “leading” investment managers on factors they claim create a “positive investment climate.” Perhaps not surprisingly, investment managers favour even lower corporate and personal income tax rates to benefit their clients… if not the middle class or the public interest.
Ironically, on the same day allnovascotia.com reported so favourably on The Rich List, it lamented Nova Scotia ranked ninth on the Fraser Institute’s list and “dead last” for taxing business profits.
It’s clearly time we put more money into the hands of our province’s richest. They need the cash.
Copyright 2010 Stephen Kimber
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About
STEPHEN KIMBER, a Professor of Journalism at the University of King's College in Halifax, is an award-winning writer, editor and broadcaster. He is the author of one novel -- Reparations -- and seven non-fiction books.
Buy his books at Amazon.