News
Views
Government
In the harbour
Footnotes
News
1. Wage freeze
The government has put a three-year freeze on wages and retirement allowances for management and non-union staff at the health authorities, including the IWK Health Centre. The freeze is retroactive to April 1, the beginning of the province’s fiscal year.
I suspect that this freeze anticipates the government’s position going into negotiations with the NSGEU. Civil service workers have been without a contract since April 1; negotiations have not yet been scheduled.
A wage freeze effectively lowers workers’ pay as inflation increases the cost of living.
2. Played
CTV reporter Rick Grant has been played.
On Monday, about 200 film industry supporters rallied outside Province House as the legislature passed the budget, which included changes to the film tax credit. That evening, Grant revealed that he had obtained a report, apparently leaked from someone in the Department of Finance, purportedly showing that the bulk of the benefits of the program went to just six per cent of workers making over $100,000 a year.
You can watch Grant’s report here.
Here’s the document:
There are several problems with this analysis. John Wesley Chisholm goes into more detail here, but let me summarize:
• The tax credit isn’t paid to employees; it’s paid to production companies. The point of the film tax credit was to support the production companies through a subsidy for wages. The companies took the promise of the tax credit to the bank to get financing for production; at the end of production the bank loan was paid back with the tax credit payment. The amount going to each worker is incidental to the equation; that’s why the government itself wants future supports to reflect total production costs, which are a better measure of economic impact.
• But even taking the chart at face value, it’s still inaccurate. The “Applicant Company Labour” shows that the data reflects per employee per production company. In reality, many people in the film industry work on multiple projects through the year, and so the “0-10K” line is a distortion — camera operator X might get paid $8,000 by Company A, then $7,000 by Company B, then $9,000 by Company C, and so forth until she earns a total of $40,000 for the year.
• Of course there are going to be highly paid workers in the film industry. What do you suppose Bubbles is paid? Or Tom Selleck? And of course those are the exceptions. Most people are modestly paid.
Played
This gets to the nub of our understanding about economic development in Nova Scotia. We structure payroll rebates based on employees making more than a certain amount every year, typically $50- or $60,000. But, as with the film tax credit, the government rebate is paid to the company, not the employee. Why is it good to have relatively highly paid workers at RBC but bad to have relatively highly paid workers in the film industry?
In the case of payroll rebates, the argument is that the government payments are worth it, not because RBC needs a few more million more dollars to add to its multibillion dollar coffers, but because the benefits of the payroll rebates flow through to the rest of the economy, helping us all. It comes down to this: Part of the taxes on the minimum wage worker at Tim’s goes to the multi-billion dollar company with execs taking home million dollar bonuses, managers getting paid six figures, and nerdy dudes in the Bedford cheque processing centre making 50 grand, because there’ll be so much money sloshing around the province that maybe one of those nerds will leave a couple of quarters on the counter after ordering a double-double. Well, that’s the theory, anyway.
Sure, decisions about who gets the economic development loot sometimes reflect nepotism or insider connections, but I increasingly think there’s a social class issue at play. The Ben Cowan-Dewars of the world don’t have to sleep with the minister of finance or whoever; they don’t even have to know anyone in Nova Scotia. Rather, they’re recognized at first interaction as part of the clan, one of “us,” the us being not, well, us, but rather the self-important sort that control such decisions. And people in the film industry evidently are not part of the clan.
It looks like someone gave Grant a misleading chart for political purposes, and Grant didn’t think through the political issues involved.
3. Halifax Water
Workers at Halifax Water can legally strike at any time, and the company can lock out its workers as well, but both sides have held off. The union says it wants to go back to the negotiating table.
4. Quarry
Chief Justice Michael MacDonald issued two rulings related to Northern Construction Enterprises’ proposed quarry next to Miller Lake, near the airport. Together, the rulings allow the quarry to go forward.
The city had denied the company a permit for the quarry; the company appealed that denial to the UARB, which agreed with the city; and then the company appealed the UARB ruling to the court.
MacDonald sided with the company and ruled that the city’s bylaw regulating quarries exceeds its mandate. Read his ruling here. That ruling made a second appeal from Northern Construction irrelevant, and so MacDonald dismissed it. Unfortunately, the second ruling came first in the email the court sends to reporters listing rulings, and so I tweeted about that before reading the first. My apologies for the confusion.
5. Vulgarity
The CBC interviews local reporters who have had to put up with the FHRITP ugliness.
I’m so old I remember when people who try to video-bomb live sporting or news events and hold up signs saying “hi mom!,” which was kind of sweet.
Views
1. Close your eyes and think of the queen
Photo: Stephen Archibald
In anticipation of the Victoria Day weekend, Stephen Archibald notices all the things in Canada referencing Queen Victoria. In Halifax, he tell us:
[I]t is easy to find evidence of Victoria around our old military establishments. Look for VR that stand for Victoria Regina — queen in Latin (so the capitals of Saskatchewan and British Columbia are named after the same person?).
[…]
I’m most fond of the VR over the front doors of the Armoury. You have to look carefully because it is obscured by the staging that protects you for falling bits of the building.
I worked kitty-corner [the US term is catty-corner] from the Armoury for eight years. I still hang out at the after-work church across the street from the Armoury. I’ve probably walked past that VR a thousand times, and yet I’ve never noticed it.
2. Who shot Snot?
John DeMont has a thing for nicknames.
3. Cranky letter of the day
In November 2014, thanks to the Town of Shelburne, the Union of Nova Scotia Municipalities passed a resolution aimed at having our province “develop a provincial program in conjunction with Nova Scotia Power and all municipal utilities (a few towns still have their own power utility), to compensate low income individuals and families for food losses incurred due to power outages of more than 24 hours.”
I was there when the resolution passed and witnessed strong support from elected representatives from many county and towns across our province.
Six months later, the province, through Community Services, has just responded, ever so weakly.
It appears they are in no rush to act. But it looks like they would join in if someone else takes the lead. Notably, the motion called on the province to develop a province-wide program.
It looks to me that the province’s preference is to sit on things until someone else initiates a discussion or takes a next step. The resolution that so clearly asked for the province to help vulnerable people got a typically bureaucratic response.
It’s responses like this that cause people to believe government is there to serve corporations, not the little guy or gal with freezers that represent their life-line to food security. This type of wishy-washy government response allows a corporation seen by most as a big, greedy, highly profitable monopoly to continue to be unaccountable for the economic whack a power outage represents to many families.
The cause of these power outages has repeatedly been tied to a lack of proper maintenance. Clearly, NSP could mitigate the expense of compensation by limiting outages through increased maintenance. Our province’s response is woefully inadequate.
Of course, province, the compensation should come from NSP. But this can’t happen without you in the lead role. The required result should be a compensation package ready before the next storm season. The “discussion” should be a short one between you and NSP. It should be argued that all households be eligible, but could start with attending to the needs of those who are most economically vulnerable. After scores of years as a poverty rights activist, my interpretation of your response is that your intention is to do a little bit of nothing and only if some-one pushes further to see you do that. The text of the province’s response is below.
“The Department of Community Services currently provides relief to eligible recipients of the Employment Support and Income Assistance program in times of emergency including lengthy power outages. Yet there are many more low-income Nova Scotians outside the ESIA program and the jurisdiction of the department—working poor and seniors.“At a time when the province is calling for fiscal restraint, and progressive corporations are recognizing the value and goodwill to be gained from being socially responsible Community Services would propose that any program to compensate low income Nova Scotians for food replacement costs to power outages of more than 24 hours be fully funded by NSP.
“The department would be prepared to participate in these discussions, share experiences and administrative data.”
Pauline Raven, Kings County Councillor, District 3
Government
City
Appeals Standing Committee (10am, City Hall)—come watch your neighbours appeal their unsightly premises citations! Today the owners of that property on Wyse Road in Dartmouth that used to be the Little Nashville country bar and then was the worst strip bar in the world and now is an animal hospital will plead for mercy. Also this failed construction site on Shore Road in Bedford:
Photo: Google Street View
Environment & Sustainability Standing Committee (1pm, City Hall)—it isn’t yet posted on line, but the most interesting issue for today’s meeting is the staff report on the Nova Scotia Nature Trust’s 100 Islands campaign.
This is a worthy endeavour; past staff reports have said saving the archipelago is outside the municipality’s mandate, which may be true, but not enough attention has been brought to the effort.
Harbour East–Marine Drive Community Council (6pm, Nantucket Room, Dartmouth Sportsplex)—the staff report recommending against the daylighting of Sawmill River is on the agenda as merely an information item, but it’s likely that the council will ask for a discussion of it.
Here’s how Sam Austin describes the report:
The report was clearly not written with a willingness to explore daylighting as a potential option. It focuses exclusively on the barriers and offers no discussion of what daylighting would look like or the potential benefits. Its sole purpose seems to be to justify the decision to abandon daylighting in the Greenway, a decision that has clearly been made by staff months ago without any public discussion. It’s one-sided and deeply flawed. This is my rebuttal.
Time is an issue here. As I understand it, Halifax Water is planning to replace the pipe that now contains Sawmill River this summer, so if daylighting isn’t approved in the very near future, the opportunity will be lost. It’s not good enough for the community council to ask for another report; councillors should instead kick the issue up to the full city council for action at its next meeting, on May 26.
Province
Veterans Affairs (9am, Room 233A, Johnston Building)— Barry Yhard, Executive Director of Veterans Emergency Transition Services, will be questioned.
In the harbour
Halifax Harbour, 8:40am Thursday. The blue boats in the inner harbour are the ferries. The red ship is the tanker Iron Point, at anchor. Three container ships are docked at HalTerm in the south end. The pilot boat (grey) is making its way to the cargo ship Resolute, off Herring Cove (green square). Map: marinetraffic.com
Augusta Kontor, container ship, arrived at Fairview Cove from New York this morning
Iron Point, tanker, sails to sea
Reykjafoss, container ship, Argentia, Newfoundland to Pier 42, then sails to sea
CPO Korea, container ship, Antwerp to anchor
CPO Miami sails to Antwerp
Footnotes
Nothing to say today.
I think Halifax Water is still in the design face for the culvert replacement and is aiming for 2016.
They are challenged by the technical difficulty of providing fish passage underground for that length of culvert which is why many people think daylighting could make that project more successful and maybe even less expensive.
The only route that seems feasible for some portion of daylighting, however, includes a part of the Canal Greenway where the city is planning a historical project. Work is being done on that this year so your point about time being a critical factor stands.
RE: Kitty Corner/Catty Corner:
It is neither American or Canadian to use one or the other – it appears the Southern Tier states do seem to prefer Catty Corner, but the Northeast, Midwest and the entire west seem to prefer the “Canadian” variant, if that’s what it is 🙂
http://spark.rstudio.com/jkatz/Data/comp-76.png
I grew up in Virginia but lived most of my life in California, and used (and heard) “catty-corner” both places.
Interesting! Virginia is certainly firmly in the blue on that map, Southern California less red, in that both are probably used. I find the geographical distribution of language fascinating! I’d love to see a North American version vs. just the lower 48… There are differences within Canada such as this, too.
To be fair, even if RBC manages to get the full $22M, (conditional on creation of 500 jobs) wouldn’t that add up to somewhere around a 10% labour subsidy? That’s still less than the 12.5% proposed by the province to the film folks. We know now that would have crippled or destroyed the industry.
Could the “clan” you speak of just be industries that can subsist without the province picking up a quarter of their costs of doing business?
Still, its not like these moves aren’t consistent with the stance they got elected on. They just can’t get their message straight to save their lives. Who needs an opposition with the blunders they’ve made on this issue? Its like Leo said in the West Wing: “we can’t put a forkful of waffles in our mouth without coughing up the ball”
I don’t believe there is many relevant comparisons between an industry tax credit and an NSBI bestowed deal.
Did you ever notice how discouraging incentives like Labour Rebates are? Do you note that every time one is announced the whole province goes grrrrr? Did you ever think that economic incentives shouldn’t be discouraging to the larger economy?
Did you notice until last month we had many refundable tax credit systems in the province for knowledge-based industries including digital media, animation, film, R&D, TV drama and documentary? These systems have worked well and created jobs and wealth for nearly 20 years. A real sustainable competitive advantage. And they did it without discouraging or holding back anyone with ambition and a good idea. Tax credits are broadly enabling and do what they’re supposed to do… encourage.
The refundable film tax credit is an economic development strategy that enables people with ideas to become local job creators and attract investment to Nova Scotia that would not otherwise come. Beyond this it has social, cultural and tourism benefits that are quantifiable even as they are denied at this moment by the current government.
Even the most cursory economic impact analysis no matter what figures you choose to use, if done the same way government in Nova Scotia measure economic impact for other projects, policies and industry, reports an import contribution to GDP and jobs as well as a net positive contribution to the tax coffers at the provincial, municipal and federal level.
However, the key feature of the strategy is that it is the only sustainable and proven alternative to the old timey crony capitalist, pick-a-winner style of economic development that is at the heart of Nova Scotia’s discouraging and divisive experience economically speaking over the last generation. Instead of limiting ourselves to the mediocrity of bureaucrats and politicians, the sectoral tax credit strategy can work for Nova Scotia by pointing generally towards innovative future industries and ideas and enabling anyone with the ideas, ambition and drive to effectively become an economic development army of one. No other economic development tool so effectively and sustainably diversifies risk and creates a real market for innovation, self-sufficiency and improvements to our quality of life.
None of this is to say that the labour rebates aren’t good investment. I’m not one of those who would bash the shipbuilding deal or the RBC deal. I’m just saying that in terms of a policy tool they are slow, unnecessarily high risk in terms of picking winners and suffer DEEPLY, discouragingly and divisively because for every winner picked, even insider chosen for whatever reason thousand of people with hopes, dreams, ideas and ambitions are left on the outside defeated and head-shaking. Sectoral or regional tax credits, properly directed and well administrated are better, faster, more fair, more encouraging, and more fiscally adaptable.
If NS wanted to build ships we should have set up a shipbuilding TC credit where anyone who brought in a contract, did the design, hired the workers, delivered and reported audited results responsibly could earn a refundable tax credit, which could be used to grow or finance more industry. Irving would have gotten the same in the end, but if Theriult’s or Big Pond boatyard pulled in a build, they could have gotten one too.
It’s all about really understanding where wealth comes from and how we imagine Nova Scotia to be more prosperous in the future. Wealth can only come from jobs that fish it form the sea, dig it from the ground, grow it in the soil or manufacture it using our ideas. All other jobs, though often wanted and needed, are just churning our wealth or out-conveying it from our province.
I believe knowledge-based industries, especially media, is woven into the fabric of the future and integral to building sustainable, wealth-creating, competitive advantages in innovation beyond industrialization, modern factory work, and resource extraction. I believe local job creators are more important than multi-national out-conveyors of wealth in economic terms.
“I don’t believe there is many relevant comparisons between an industry tax credit and an NSBI bestowed deal.”
Except for the whole “They’re both payroll rebates” thing.. Except the film rebate was 50% and RBC’s is 5%. The province literally makes money on the RBC one. Not on the film one. The RBC is also over 10 years. And it makes money on it.
The RBC credit returns more in tax dollars than we spent.
Did I mention the RBC credit makes money?
“I believe local job creators are more important than multi-national out-conveyors of wealth in economic terms.”
Hollywood is super local. In fact it’s part of NS now isn’t it? When we annexed SoCal? Didn’t make the news for some reason.
Halifax has it’s own Versailles house, on Shore Road, by the looks of it!
A minor correction: the Wyse road property no longer houses my vet Markus Stasiulis. He moved out many years ago, and has his own practice VetWise on Ochterlony – the one with all the animal statues on the roof :). He is wonderful, by the way.