News
Views
Government
On campus
Noticed
In the harbour
Footnotes
News
1. Sidewalk protest
A hundred accessibility advocates took to the street yesterday to protest the poor state of Halifax’s sidewalks.
2. Part time work, full time misery
Moira Donovan examines how universities are increasingly using poorly paid adjunct professors. This article is behind the Examiner’s pay wall and so available only to paid subscribers. To purchase a subscription, click here.
3. Bullets and body bags
The department of Natural Resources has an open tender for bullets, while the department of Health and Wellness is tendering for body bags. The two are entirely unrelated, but this will get the conspiracy nuts going.
4. Bridge closures
Just a reminder: Macdonald Bridge closures start Sunday evening at 6:30pm, and will continue Sundays through Thursdays, 6:30pm to 5:30 am, for the duration of the 18-month reconstruction project. Sporadic weekend closures will start this summer.
Information about the Halifax Transit shuttle bus is available here (basically, it travels between Scotia Square and the Bridge Terminal).
Additionally, starting Monday, the Alderney ferry will travel on a 15-minute schedule after 6pm on weekdays. Weekend service ferries will travel on a 30-minute schedule all day and evening Saturday and Sunday.
The Bridge Commission still hasn’t published definitive information about its shuttle bus for pedestrians and bicyclists, but once the bike and pedestrian lanes are taken off the bridge in June, the bus will travel from the middle of nowhere (the abandoned Bridge liquor store, which might be convenient to bicyclists but will require pedestrians to walk through an empty field) to the middle of nowhere (the sewage plant, convenient to no one at all, unless you happen to be a worker at the sewage plant).
Yea, I know, never read the comments, but if you want a taste of the hatred for bicyclists, check out the comments on this CBC article.
5. Gas pumps
We should put warning labels on gas pumps, says an environmental lawyer.
Views
1. Ivany Report
In the Chronicle Herald today there are two different takes on what the Ivany Report says about forest management. In an op-ed piece, forest ecologist Minga O’Brien says that the Ivany Reports says there should be better management of forests, less clear-cutting, and that the province should set aside significant acreage for hardwood production and selective management. Meanwhile, over on the letters page, Jeff Bishop, executive director, Forest Products Association of Nova Scotia, says the Ivany Report says that people shouldn’t be complaining that the companies he represents are clear cutting like crazy in St. Margaret’s Bay area.
2. Debt
Rachel Brighton has a thing about the provincial debt, which we’re all supposed to be worked up about.
I’m sure people with far more knowledge and understanding of this will weigh in, but my back-of-the-envelope calculation shows that Nova Scotia’s public debt of around $15 billion compared to its annual GDP of around $39 billion results in a debt-to-GDP ratio of around 38 percent.
A quick internet search this morning show that Nova Scotia’s debt-to-GDP ratio is high for Canadian provinces — Ontario’s is a percentage point higher, while Quebec’s is much higher, at 50 percent — but the RBC forecasts the Nova Scotia’s public debt-to-GDP ratio will decline in the next few years, to 34.2 percent.
Even Quebec’s 50 percent public debt-to-GDP ratio isn’t particularly alarming in comparison to worldwide debt levels. The ratio in Germany, the healthiest economy in the EU, is 80 percent, for example. Most European countries are hovering around 80 percent; South Korea has a debt load almost identical to Nova Scotia’s.
Sure, long-term demographic trends might create some problems in the future in terms of the government’s ability to deliver services, but for right now, the debt load is immensely manageable. The sky-is-falling pronouncements look like an excuse to force a neoliberal austerity agenda down our throats — with the political aim of cutting services to working people in order to further enrich the wealthy, and essentially killing any public expectations that government work for the common good.
Noticed
The passing of Leonard Nimoy reminds me of what may be the very best Simpson’s episode, Marge vs. the Monorail, written by Conan O’Brien.
Nimoy had earlier Simpsons form, of course, in the Marge vs the Monorail episode, where he happily sent up Spock-esque humourlessness. The guest of honour at the opening, Nimoy fails to be recognised by Mayor Quimby (“Weren’t you one of the Little Rascals”) and then drones on about Star Trek (“Actually, the doors on Star Trek were not mechanical, we had a stagehand on either side”).
After the monorail’s disastrous maiden voyage, Nimoy calmly claims responsibility for saving everyone (“My work is done here”) before vanishing, teleporter style, after being challenged by Barney: “You didn’t do anything!”
“Didn’t I?”
Small but perfectly formed, his Simpsons bits showed he could take a joke.
Here in Halifax, the Monorail song became the anthem for we convention centre naysayers:
In the harbour
Zim Savannah, container ship, New York to Pier 41, then sails to sea
Atlantic Concert, ro-ro container, Norfolk to Fairview Cove, then sails to sea
Maersk Penang, container ship, Quebec to Pier 42, then sails to sea
Nounou, tanker, Antwerp, Belgium to Tufts Cove
Fusion, sails from Pier 36 to sea
I’ve been waiting to see if the collapse of oil prices would mean that Nova Scotia Power would switch from burning natural gas to oil. The arrival of Nounou today suggests that it is.
Footnotes
After the Saturday morning Morning File, the Examiner website is typically inactive for the weekend, but I’ll have a couple of posts up later today.
“A solar eclipse. The cosmic dance continues.”
Where in the Bedford rapid Transit-fest were two important items mentioned? CN’s attitude? – never the easiest corporation with which to deal.
The second is what role a plain and unfancy small ferry service could play sailing from Bedford with a couple of stops to downtown and back via Dartmouth. Yes, there was a sort of study a while ago which made all the mistakes that the Yarmouth ferry is making – jet speed and fancy-fancy. Instead, wouldn’t commuters care to spend 30 or 40 minutes watching the coast and reading for a reasonable fare price?
I think this possibility should be put into the mill with rail and see what the advantages and costs might be before we go too far down any rail path.
Richard Starr puts debt mania in perspective on his blog Nova Scotia Observer.
http://lilstar2.com/2015/02/26/new-ag-picks-up-where-lapointe-left-off/
http://www.fin.gc.ca/fedprov/mtp-eng.asp
https://www.novascotia.ca/finance/communitycounts/profiles/economic/income.asp?gnew=&table=&acctype=0&chartid=&mapid=&dcol=&sub=&ptype=geo&tid=&gview=6&glevel=pro&gnum=pro9012&gnum2=pro9012&yearid=2006
Bruce, I was going to say that this fellow is being irresponsible and wonder why on earth he would undermine the attention paid to the important problem of servicing our growing debt. However, in reading his blog he gives some reasoning. He is interested in the issue of equalization payments and propose its premier import.
I’m not moved much one way or the other by the equalization debate. I’ve tacked on some simple numbers above to get a handle on my reason. The truth is NS over a long period of time gets a couple hundred million dollars a year more from federal transfer payments than the total amount of federal taxes we pay. I don’t think the differ numbers are big enough to justify any of the talk from either side of this issue. It’s generally been this way for a century because our economy is just not going to move at the same pace as the other regions with their vast northern expanses of wealth. Rather than talk about equalization I’d be interested in getting at why we really need it in the first place and other tools for handling the problem.
Even as it is though, we don’t need to choose between concern for equalization fairness and debt problems. The annual cost of servicing our debt, the terrible reasons we’ve incurred and continue to incur that debt and the risks we’ve created using foreign currencies are just simply an order of magnitude larger and in the other direction from the equalization quandary… and as the auditors are working to point out, not being addressed… no one is responsible and there is no long term strategy… and that I think is the heart of the problem.
I would like to hear more about what you, Mr. Starr and Tim are trying to achieve with your lines of talk, which to my reading seem to say we should not be as concerned as the auditors about this issue.
Tim, you’re getting very close to my favourite question in the world. One that reporters NEVER ask. IS THAT A BIG NUMBER? “The provincial debt” is only a small portion of our total debt which you know includes the federal debt, personal debt, car loans, mortgages, and student loans. An sometimes payday loans. This last week we’re more aware than we were before there is also substantial off-balance sheet debt – unfunded liabilities, that no one is being responsible for. The current example are the unfunded defined benefit government pensions.
Since debt is a future liability, understanding whether the debt is bad, tragic or indifferent requires making some assumptions about the future.
Since WWII western government have been able to grow their way out of seemingly insurmountable debt problems. This is now to the point where government is obsessed with growth. As you point out debt is judged relative to wealth. If you owe $1000 it’s a very different thing if you make $1m per year rather than $29k.
The thing that rarely gets discussed is the cause and quality of debt.
Cause: If we incur debt to create long term wealth creating assets (like factories or homes that have value lasting longer than the debt) then debt is trivial, it’s just a way of using markets to match long term assets with the costs of creating them. Even accountants understand and accept this. However if we use debt to basically buy smokes – to cover short term things that we don’t really need or are wasteful or environmentally unsound (suburban sprawl, much of our roadwork) then the debt is a very serious thing no matter what the number because it has no corresponding long term value – worse it creates other liabilities.
Quality: We’re not the only ones to think about our debt. The people we owe the money to are unsurprisingly quite interested as well. It was one time imagined that government debt is risk free and government enjoyed very low interest rates. No one thinks government debt, especially provincial debt, is risk free these days. The more debt we have, and the more nebulous the cause of the debt, the more the debt costs because of higher risk premiums. These numbers are not small. Rather than debt to GDP, the ratio of most concern to us today should be our debt service ratio. How much of our total tax burden goes to servicing the risky, unproductive debt we’ve accumulated?
A final point. NS also takes on debt in foreign currencies. It’s a shockingly bad plan. Combining coupon interest rates as high as 11% with currency exchange risk and we’re in a much worse position than Brighton or anyone imagines.
Here’s a list of our current provincial debt. http://www.novascotia.ca/finance/site-finance/media/finance/debt2014.pdf
A rough estimate of the cost of this debt next year would be 6% of $20b (including the offbalance sheet liabilities). That’s $1.2b on an annual budget of about $10b. 12% of all our taxes going directly or eventually to debt servicing without ANY repayment of principal. Imagine if your personal finances worked that way.
Do you have any idea why NS takes on debt in foreign currencies? I’ve heard that, for example, the MacDonald Bridge was financed in German marks at the time it was built.
Foreign currency debt is widely believed to increase risks of financial crisis, especially after being implicated as a cause of the East Asian crisis in the late 1990s. So why would we take it on? Two reasons. Related. We take advantage of the lower cost of foreign currency debt. Foreign lenders are willing to accept greater risk.
The question is really why, if this kind of debt is used and problems well documented, aren’t proper and available currency fluctuation hedging tools used?
This from the Wikipedia article on the MacKay Bridge:
“In 1970, a decision was made to finance the construction of the bridge with low-interest loans denominated in foreign currencies. That decision saved money in the short term and allowed the tolls to be kept low. However, the subsequent decline in the value of the Canadian dollar against the German Mark and the Swiss franc wiped out the interest cost advantage, then added massively to annual debt servicing costs.”
yep, that’s what happened