Mr. Premier, Think Beyond the Pandemic to the Province’s Future Prosperity

Commentary, Government, Joseph Quesnel

The Nova Scotia Liberal Party has chosen a new leader and it is important to think about the policy priorities of the province’s incoming premier. 

Although an election does not need to be held until spring of 2022 (Nova Scotia is the only province without a fixed election date), Elections Nova Scotia is already preparing for one as early as April 1 of this year. 

The premier-designate has some big shoes to fill; his predecessor was incredibly popular and shepherded the province through the first wave of the COVID-19 pandemic. Nova Scotia has become known for its quick actions in response to the pandemic and low rates of infection. 

Here are some policy recommendations that transcend party labels for the incoming premier.  

For starters, the premier-designate should continue on the same path regarding the pandemic as his predecessor. The province has worked closely with top scientists and has been strict on isolation requirements (as part of the so-called Atlantic Bubble, which has burst somewhat recently, but not in Nova Scotia). Now, the challenge will be the vaccine roll-out, but that will involve working closely with the federal government. 

The pandemic forced the province to eat through its slim surplus; the incoming premier will be dealing with a $500 million deficit by the end of the fiscal year. The tourism and hospitality industries have suffered greatly throughout the pandemic period. The government faces the perennial choice between tax increases or budget cuts. 

The province needs to work with Ottawa on ensuring a balanced economic recovery. 

However, as the premier-elect plans the recovery, he should thumb through some insightful commentary that came before him. The premier-elect should read a commentary by David MacKinnon, a senior fellow with the Frontier Centre for Public Policy and a native of Prince Edward Island. Looking at the system of regional subsidies in Canada, MacKinnon pointed out how our equalization scheme—while aiming at regional fairness—often distorts policy choices that Nova Scotia and other Atlantic Canadian provinces are making. The system damages the provinces’ market economy, reduces the provinces’ competitiveness as compared to other provinces and outside jurisdictions and encourages provinces like Nova Scotia to engage in risky policy because it is shielded from the consequences. 

For example, Nova Scotia, like some other subsidy-dependent regions, has an excessive public sector compared to its per capita population. It also tends to generate large budgetary deficits, which come thanks to federal bailouts. Moreover, the way that natural resource wealth is calculated in the subsidy formula has allowed the province to embrace serious NIMBYism through the shunning of fracking and uranium mining. Nova Scotia, like nearby New Brunswick, has some important energy resources that it is not developing because it is not being forced to.

While Nova Scotia is envied for its commitment to the environment, which is positive, it must also embrace its entrepreneurial, risk-taking side and encourage resource developments and business startups in a much more aggressive way, as New Brunswick’s premier did in the past. 

The new premier should also dust off the cover of the report of the Nova Scotia Commission on Building Our New Economy, called Now or Never: An Urgent Call to Action for Nova Scotians. This honest, insightful and hopeful 2014 report identified many of the systemic challenges facing the province into the future. It was compiled before the pandemic, but many of the systemic challenges it identified still ring true. Most hopeful was its declaration that the province would not always remain a have-not province. An aging and shrinking population and lower traditional rates of economic growth are affecting the province’s standard of living and critical public services. However, the province’s educated human capital could change things. The government must think beyond the pandemic to the province’s future prosperity. 

Now, the equalization system is set at the federal level, but Nova Scotia must work with Ottawa and the other provinces to bring about systemic change to the way it is calculated. Like some other provinces, Nova Scotia must find a way to restructure its costly public sector. This does not have to mean mass layoffs. The province must also deal with its large hospital and university infrastructure. 

The new premier and his government should deal with the pandemic first, of course, but the incoming premier should engage in an honest conversation with all Nova Scotians about the systemic reforms needed to improve their province’s chances. This should happen before the next election. 


Joseph Quesnel is a senior research associate with the Frontier Centre for Public Policy.

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