The cupboard is bare…

Andrew Coyne on Nova Scotia’s financial woes

The cupboard is <em>bare</em>...Nova Scotia’s new NDP government plays the oldest card in the political deck. Next steps:

1. Announce that you cannot be held to your campaign promises, which were to balance the budget without raising taxes or cutting spending, as the situation has changed utterly.

2. Announce that you are amending provincial legislation mandating balanced budgets, though you forced an election over the previous government’s attempts to wriggle out of it.

3. Raise taxes.

4. Modify growth in spending slightly, announce that it has been “cut”.

5. Run big deficits.

6. Hope economy recovers.

7. As next election approaches, a) raise spending, but b) fudge deficit numbers to show budget balancing, just (at the top of the business cycle). Opposition parties will collude with you in (b) while denouncing (a) as not nearly sufficient.

8. Opposition elected on “fiscal reponsibility” platform.

9. Repeat steps 1 through 8.




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The cupboard is bare…

  1. Hilarious to see it spelled out in numbers. But true, unfortunately.

  2. Yeah, but the new premier is doing it in a down to earth, folksy sort of way.

  3. Your forgot the pre-quel.

    1. Claim you've balanced the budget when you really haven't.
    2. Lose election.
    3. Get appointed to the Senate

  4. After the 10th time reaching step 9, it changes to:

    9. Government goes bankrupt like Argentina. Everybody loses their shirt.

  5. It should be interesting (and revealing) to see if this plays out exactly as Mr. Coyne predicted.

  6. 10. Wonder in the midst of the chaos, what the Governor of South Carolina could possibly want.

  7. 10. Hash out an energy policy that green-washes people into redundancy and diluted feelings of forward-thinking.

  8. Well, it works so well for Ontario after all…

  9. hahahaha gaunilon can't agree more!!!

  10. ROFL – well done – indeed all laid out nice and organized like – especially the repeating previous steps. Looks a lot like my mission statement – you better be careful the cabal that really runs the world doesn't like people letting such secrets out of the vault!

  11. If they're going to fiddle while Halifax burns anyhow, Nova Scotians should have gone with the better fiddler.

  12. If Glen Pearson is still wondering why Canadians feel such ennui when it comes to pols and politics, this would be a good start towards explanation. Pols pull this kind of stunt over and over and over and eventually we start to think all pols are basically the same and lie through their teeth to get elected and then do whatever they want without regard to what citizens think.

  13. Just wait until you see the 2010 Ontario Budget…

  14. If private companies routinely fudged the numbers the way the lawmakers routinely fudge the numbers, we'd need bigger prisons. What we need is legislation permitting the auditor general to refer fraudulent $ reporting to the Crown Prosecutor. Oh, wait, sorry. That would mean lawmakers would voluntarily hold themselves accountable to the people. Silly me.

    • I had this debate with some partisans in the past. It is not a crime to have overly optimistic budget forecasts.

      It would be a crime, however, if the books were fudged AFTER the fiscal yr is complete and they are the final accounts – similar to annual reports by companies (see Garth Drabinsky)

      • you mean like Bre Ex?

        • Based upon salted (fraudulent) core samples.

          • I think that qualifies as an overly optimistic forecast don't you?

            Dot said

            " It is not a crime to have overly optimistic budget forecasts"

            Overly optimistic, in the sense of just being wrong or naive can still be subject to some sanction Public companies are defintiely subject to legal sanction on forward looking statements….why do you think they all make the statements of "safe harbour" when they make those ponouncements. There are rules around that…unlike government budget forecasts, where there are no rules, except for the well worn ones Coyne lays out.

          • I think that qualifies as an overly optimistic forecast don't you?

            Dot said

            " It is not a crime to have overly optimistic budget forecasts"

            Overly optimistic, in the sense of just being wrong or naive can still be subject to some sanction Public companies are defintiely subject to legal sanction on forward looking statements….why do you think they all make the statements of "safe harbour" when they make those ponouncements. There are rules around that…unlike government budget forecasts, where there are no rules, except for the well worn ones Coyne lays out.

          • Sorry, I didn't read this comment until just now.

            I was referring to government budget forecasts. The Bre-X case is not based upon overly optimistic forecasts in the same sense. There were fraudulent core sample – which formed the basis of determining gold assets (reserves). And obviously, any proforma forecasts based upon those fraudulent reserves are similarly tainted.

            You may have a point somewhere, but using Bre-X as your example is not comparable, in my opinion.

  15. What's the gov't equivalent? I'm missing your point.

    • Actually, I just thought of an answer to my own q:

      Defence Minister Peter MacKay's decision to approve an eight-year retroactive promotion and financial payout to the officer who led the ill-fated Somalia mission was such a rare occurrence that military paymasters had to partially guess at the amount Col. Serge Labbé would receive, according to newly released Defence Department documents.

      Last summer, MacKay, acting on the advice of Gen. Rick Hillier and a review board made up of fellow generals, quietly promoted Labbé from colonel to brigadier-general, making the new rank retroactive to July 2000.

      Labbé retired shortly after his promotion.

      http://www.ottawacitizen.com/news/Military+offici

  16. Who is surprised that Rodney McDonald and his Conservatives left NS in sad financial shape?

    This has typically been the legacy of so-called "Conservative" governments in Canada, both federally and provincially.

    Devine, Harris/Eves, Mulroney–the list is long.

    Leaving government finances in worse shape than they found them: it's what Canada's so-called Conservatives actually *do*, despite their vocal claims to the contrary.

    The latest episode is unfolding in Saskatchewan, where the Wall government's economic mismanagement has recently come to light: wildly optimistic resource revenue projections have proven to be a bust, so Wall & Co. are left scrambling to hide their mistakes from the public.

    Despite Coyne's calculated show of cynicism, the real story in NS is that yet another so-called Conservative regime has proven anything but responsible in its management of the economy.

    • "Devine, Harris/Eves, Mulroney–the list is long."

      Looking back at recent Ontario premiers Harris/Eves were the golden years since, unlike Rae and McGuinty, their deficits never topped $10 billion.

    • Imagine the horror, a deficit in a recession! Also, it should be noted it was PC Premier John Hamm who came in and balanced the books. And that dastardly Mulroney, ruining all those balanced budgets of Trudeau. DAMN HIM!

    • Not surprising that politicians who are lawyers for the most part mismanage the economy about which they have not a clue but worst mismanagement awards always go to NDP and Liberal tax and spend governments so this diatribe against conservative fiscal management is just bizarre.

  17. Coyne is wrong in one particular, this is not a continually repeating cycle.

    The thing is the previous Progressive Conservative Premier, John Hamm actually balanced the budget, and not just at the top of the business cycle. He fought the provincial unions, pissed off a variety of constituencies with cuts, and commited the province to paying down the deficit with the royalty money from the offshore. Hamm was not popular with the Federal Conservatives despite his PC brand, but Nova Scotians reacted to his understated leadership and willingness to be unpopular if he thought he was making the right choice.

    • True indeed. He also did it with back-to-back minority governments. For whatever reason, fiscal responsibility (a.k.a. a balanced budget) became the hymn book from which all three parties in the House could sing. It was MacDonald's last budget, which attempted to undo that dedication of Equalization offsets to debt reduction that spurred the opposition to vote it down.

      Now that Dexter has a majority, it will be interesting to watch what happens to the political consensus about balancing the books, which had emerged through the Hamm minority years in Nova Scotia.

      • Hamm only won one minority himself. His initial victory was a majority, back in 1999 I think. He followed that up with a minority win – got tagged with the auto insurance stuff in a summer election, then resigned as Premier after negotiating the offshore deal with PMPM (shocking a lot of people who thought he'd call an election and win a majority). Rodney won the leadership in Feb 2006 and won a minority that summer.

        I am such a geek.

    • And then he went on to star as Don Draper in Mad Men…thats the right Jon Hamm isnt it?

  18. He then retired, and Rodney MacDonald, (who was the only provincial cabinet minister to support Stephen Harper's leadership, and got a fair amount of his support and organisation from that quarter) became premier. The problem was that Rodney, like Harper (but not Hamm), was trying to find a lever to make the popularity jump to a majority government, whatever it took. In essence staying in government became the end and the solution to hand was taxpayer dollars, scattered about with abandon. Throw in a world recession, and we are back where we were before John Hamm (and to be fair John Savage before him as well).
    Along comes the NDP, and during the election they actually picked up the torch or reform and fiscal probity (see the above mentioned Johns) and was the small 'c' conservative option during the election.

  19. I hope that the Dexter government takes the admitedly ancient ploy about the state of the finances as an opportunity to tackle spending, and to fight off moves by Joan Jessome and the public service unions to demand sweetheart concessions from the party traditionally associated with organized labour. If not we may be on to the cycle outlined by Coyne above. More is the pity.

  20. To be blunt, the Nova Scotia NDP played exactly the same game as the Ontarion Liberals – "Making bald faced lies that they knew were lies – remember how Ernie's jaw dropped at the leaders debate when the Liberal leader started spouting his plans – in the face of the incontrovertable evidence. Every single one of them was and is complicit in this perfidy and they should all be fired.

  21. If you have something like "Recall", get rid of the lying bastards. If not, make sure it's there for next time. Ctampaign like you're possessed and let the idiots know they will be accountable. The next logical step in electoral rights is to have the right to sue prevaricators for malfeasance and restrict any political party from providing any funds for a lawyer. It is called Public SERVICE for pete's sake.

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