The PCs got elected on a promise to “fix health care” and they warned it would be expensive. The operating budget for 2022-2023 predicts a deficit or shortfall of $506.2 million. Spending on health care has increased $413.4 million from last year to reach $5.7 billion. During last summer’s election campaign, Tim Houston said it would take four years before the province’s books would be balanced.
“This budget presents a new path forward that includes historic investments in health care, a renewed effort to recruit health care professionals and solutions to improve our workforce, economy, housing and roads,” said Finance Minister Allan MacMaster on Tuesday.
Read the budget breakdown here.
Keeping election promises
Before getting into the details of additional health care and long-term care expenditures totaling hundreds of millions of dollars, it’s worth noting three new tax goodies promised by the Progressive Conservatives delivered in their first budget. There’s a new $4.7 million Children’s Sports and Arts Refundable Tax Credit that allows families to claim expenses up to $500 per child, effective now. There’s $3 million allocated to help individuals and couples pay a portion of the cost of fertility treatments. The maximum amount will be $8,000 for $20,000 worth of costs under the first in Canada “Fertility and Surrogacy Rebate.”
Skilled tradespeople under the age of 30 will no longer pay any tax on the first $50,000 they earn under the “More Opportunities For Skilled Trades” program. This is estimated to cost the government about $80 million next year. Missing in action is the “Better Paycheque Guarantee” Tim Houston promised during the election campaign. That policy would have allowed business owners the choice of paying 50% less corporate income tax if they used the money to increase the wages of existing employees or hired additional workers. Finance Minister MacMaster explained the government couldn’t keep every promise in its first budget and this one is expensive.
New taxes on non-residents
The Houston government is introducing two new taxes it says are designed to cool down the housing market and make more housing available for Nova Scotians struggling to find something they can buy. Both taxes will take effect April 1 of this year. Nova Scotia has borrowed a page from PEI’s playbook and will charge non-resident owners of cottages and residential properties — with fewer than three units — a tax of $2 on every $100 worth of assessed value. The tax does not apply if the property is rented out.
The second measure is a non-resident deed transfer tax of 5%. It will be levied on property purchased by people living outside the province unless they have a signed agreement to purchase dated before April 1. Taken together, the two taxes are estimated to generate about $81 million for the government.
“Fixing health care”
As expected, given the promises made on the campaign trail, health care and long-term care for seniors saw the biggest increases in funding. Health care spending has increased 7.7% over 2021/22 — representing an increase of $413.4 million. This increase includes the Department of Health and Wellness, Office of Addictions and Mental Health, Seniors and Long-term Care, and the Office of Healthcare Professionals Recruitment. Here’s the breakdown:
Health care:
- $14.5 million more to expand virtual care for patients without doctors
- $17.5 million more for 2500 more surgeries at Dartmouth General (includes 28 new beds & staff)
- $2 million for training more nurses, 120 LPNs and 80 RNs
- $22.9 million for COVID-19 vaccines
- $10.2 million to reduce ambulance wait times at hospitals
- $3.4 million more for virtual care for mental health clients
- $1.7 million more for drug withdrawal programs
Long-term care
- $66 million in wage increases for Continuing Care Assistants
- $25.1 million more to increase staffing levels to establish a daily standard of 4.1 hours of care per resident (this will require hiring 549 Fulltime Employees, 441 of whom will be CCAs)
- $15 million to keep assistants in long-term care due to COVID-19 public health directives
- $11 million to extend or convert more than 190 new long-term care spaces, including Veterans Affairs spaces, to increase admissions
Overall, government spending by departments will increase by 7.9%. Almost every government department will get an increase except, perhaps tellingly, Environment and Climate Change, Natural Resources and Renewables, Fisheries, and Economic Development. The annual budget allocation for Environment and Climate Change has dropped by $6 million, mostly due to the transfer of conservation officers from Environment to Natural Resources. Natural Resources and Renewables will receive $8 million less partly due to the phase out of a federal Low Carbon Economy Fund.
Other spending
Community Services:
- $54.2 million more to support people with disabilities. This includes $16.4 million to find alternate homes for people living in institutions and $3.5 million to move young adults out of nursing homes.
- $12.5 million more for the NS Child Benefit to help reduce poverty. For example: For families with an income below $26,000 per year the increase will be $1,275 per child, per year. For 18,000 kids Statistics Canada identified as living in poverty, the province estimates this change could lift 1600 children out of that trap.
MacMaster was asked by reporters why there was no upward adjustment to income assistance or welfare cheques considering the rising cost of food, heat, and shelter. The finance minister replied that the government chose to deliver more “targeted assistance” such as the Child Benefit and $500 Seniors Care Grant and $12 million for home heating costs.
Emergency Shelters and Homelessness:
- An increase of $16.7 million next year
Affordable Housing:
- An increase of $15 million
Public Education:
- $15 million to support recommendations from the Commission on Inclusive Education
- $12 million for pre-school programs for children with autism
Tourism
- $12 million to support tourism recovery and $13 million for the Halifax International Airport
COVID is not over and $228 million is the estimate for what it will cost this coming year. Capital spending on new hospitals and roads totalling $1.6 billion is included in this $13.2 billion budget.
“March Madness”
As predicted last December, the province finished 2021-22 with a surplus of $107.7 million, mostly due to higher-than-projected revenue from business and personal income tax, and $106 million that resulted from offshore drilling companies giving up their exploration licenses.
There came a flurry of spending announcements in the last month of the fiscal year. They included yesterday’s announcement of $65 million to help four universities in rural areas of the province (Acadia, Université Sainte-Anne, St. Francis-Xavier, and Cape Breton University) make repairs to buildings and infrastructure. Cape Breton University also received an additional $40 million to build an Innovation Centre and develop a fast-track training program for health care workers.
By contrast, today’s budget delivered just $3.7 million more in operating money for all 10 universities, including the largest ones in Halifax. The end-of-year spending included $11 million to pay for raises to RCMP officers negotiated under their first collective agreement and $65 million to cover cancer treatments for firefighters.
The debt
The net debt stands at $18 billion and the ratio of net debt to GDP is 34.9% today. That net debt-to-GDP ratio is estimated to hit 40% by the end of four years. A growing debt for a growing province.
“With our Budget 2022-23 ‘Solutions for Healthcare, Solutions for Nova Scotians’ we are looking to the future with optimism,” MacMaster said.
Fingers crossed the interest rate remains low.
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Re the Children’s Sports and Arts Refundable Tax Credit: This is a gift to middle-class and wealthy families that allows the government to claim it is doing something for children while doing nothing for child poverty. Like all refundable credits, it is only useful to people who have the ready cash to spend, and can wait up to a year for reimbursement. As any poor parent knows, the program costs are only a fraction of the expenses – many programs require access to a vehicle and free time on evenings and weekends, and travel costs can be substantial. It’s brutal to tell your children you can’t afford the time or money to go to an out-of-town weekend tournament (and it’s not much fun to hear the other parents gush about the all-night hotel party they enjoyed). If the government truly wanted to do something for child poverty, it could simply give every family a taxable $500 per child. Call it a sports and arts grant if you want, but let people decide what to do with the money. Poor families could put this to good use.
Great break-down of budget specifics. Could I ask you to get deeper into the weeds and ask about the $15,000,000.00 to support recommendations from the Commission on Inclusion? Could you ask Minister Druhan, Deputy Minister Montreuil, the NDP education critic, Hansen, or the Liberal ed. critic, Mombourquette, how much of and in what amounts this $15 million will end up supporting more properly scheduled resource support and how much will support co-teaching in the “diverse classrooms of today”?
The devil is always in the details.