All posts by jordimorgan

Demographics and the Depredation of Deficit Politics

Last year, Richard Saillant, the former director of the Donald J. Savoie Institute at the Université de Moncton published A Tale of Two Countries, How the Great Demographic Imbalance is Pulling Canada Apart. His argument centers on how provincial governments must change the way they are doing business or the burden of our demography will eventually prove unbearable.

His is but one of what is becoming a cavalcade of documentation outlining the oncoming demographic and financial crisis to which our provincial politicians seem oblivious. The idea of the Nova Scotia government spending its way to future prosperity borders on immoral.

The mysterious “debt to GDP ratio of 36.6%” getting floated as some reasonable economic milestone, conveniently ignores the Sword of Damocles current day politicians are hanging over the heads of millennials who are being forced to pick up the tab twenty or thirty years hence.

Yes, there are several $175,000 per year, publicly funded economics professors with defined benefit pensions who seem quite happy to promulgate this idea however, the small business operators who are already picking up the tab through higher taxation, constricted growth projections and puny margins aren’t quite as enthused.

Given a robust economic growth rate over the next 30 years, perhaps we could swallow the theory of absorbing more debt, but there is nothing indicating that is even remotely in the cards in most sectors. RBC pegs the economy expanding by meagre 0.8% in 2017, and this with massive infusions from construction including the Nova Centre and the Maritime Link.

It is mind-boggling to think there are politicians still willing to say, if only the government spends more money, things will be better. It is even more amazing there are people who still believe it. What is that saying about repeatedly doing the same thing and expecting different results?

What magical productivity unicorn are we collectively expecting will appear to provide the kind of economy that will sustain several billion more dollars in debt? Pile on top of this the vastly higher costs of a bubble of aging baby boomers siphoning off hundreds of millions more in pension and healthcare liabilities as they live into their 80s, 90’s and 100’s.

Optimism is one thing, delusion is quite another.

If anything, we should be saving right now, not looking for new ways to spend every dime that comes in and borrow more. There is a fiscal and demographic bill coming due and unless government dramatically changes the way it does business, the burden on all those fresh young faces graduating high school will, in the years ahead, become simply unbearable and they will leave. If they’re not already gone.

Meanwhile, federal and provincial politicians are skipping around the province espousing the virtues of borrowing cheap money. “It’s almost free!” they say. Except it isn’t. It has to be paid back, and when interest rates rise, as they inevitably will, there will be people down the road staring at debt servicing charges asking themselves, what were we thinking? Even at current bargain basement interest rates, we have spent over 4.5 billion in debt servicing charges alone in the last 5 years. That would build a lot of hospitals and highways or if you’d rather, green infrastructure and bike paths.

There are fewer than a million people in this province now. Despite some very long overdue attention to immigration and population retention, Statistics Canada projections over the next 20 years, which take into account real things like birth rate, mortality rate and net interprovincial migration, show a rapidly aging and shrinking population which will completely reshape our labour supply.

So where in this election are we actually discussing how a smaller, older population will bear not only the additional costs of this higher debt burden but also support the healthcare and retirement needs of, in military parlance, five or six full armies of seniors? Many of these 300,000 or so seniors, incidentally, will not have the resources to pay for these necessary services. This too will put additional pressure on the tax base.

Our current tax load is already the highest in the country, how do we expect to attract and retain people to this region when we are constantly looking for ways to put ourselves at a competitive disadvantage through taxation? And make no mistake, today’s deficits are tomorrow’s taxes.

The size of a government’s tax base is dependent on the size of its business sector. If we want to prepare for a better future, we need to provide a tax environment which will encourage businesses to set up and operate in Nova Scotia, not continually look for ways to drive them and our already shrinking labour force elsewhere.

There are those who may like the sound of a 15 dollar minimum wage, free tuition, free groceries, free drugs and free everything else, but I would ask them to stop and think for a moment about who’s spending the money, why they are spending it, when the bill gets paid and who gets to pay it?

Advertisements

Fall Back Up

This week, I have two more episodes of Fall Back Up for your weekend listening pleasure.

 

Bill CarrIn the first I talk with actor, commentator, motivational speaker, restorative justice specialist and now president of the Professional Speakers Federation, Bill Carr. I’ve known Bill for many years and we cover lots of territory in our conversation, from growing up in rural Nova Scotia and his athletic and theatrical career at Acadia, to restorative justice practice and how to give a better speech.

 

LisaAlso this week, entrepreneur, designer and philanthropist Lisa Drader-Murphy. After building a successful career in the textile business in Calgary, Lisa decided, along with her partner, to move their family to a renovated 18th century sea captain’s estate in Falmouth, Nova Scotia. I met her there to talk about why she decided to move to Nova Scotia and what it takes to build a successful business with no debt, on retained earnings and find ways to give back.

 

You can either click on the images above to go to my PodBean site or play the podcast directly from the Soundcloud players below. I’m still testing each of these platforms and if you have any comments on which work best for you I’m all ears…so to speak.

Again, if you have any suggestion of people you think might be good to interview for this podcast, just let me know on the contact me page up top…

Winter is Coming

Game of Thrones

Nova Scotia’s electoral Game of Thrones is in full swing and while it may lack the dramatic flair of the HBO series, it has one thing in common, winter is coming. Unfortunately, the parties are either unaware of it or are seemingly oblivious to a stark reality.

All of the parties have launched their offensives by flinging open the doors to the treasury, each with new and creative ways to spend our tax dollars with the greatest political efficiency.

The number one priority for CFIB’s 5,200 members in Nova Scotia, consistently, is a reduction of the overall tax burden and the clearest path to this is through alignment of public sector wages and benefits to private sector norms and an overall reduction of the size of the public service. In other words, reduce the cost and the size of government.

For those who argue we have already been dealing with austerity budgets, here’s the reality. Since 2007 Nova Scotia government spending has risen from $7.3 billion to $10.5 billion, an increase of 43 per cent. Additionally, we’ve seen a whopping 22.5 per cent increase in our debt from $12.4 to $15.2 billion over the same time period. All this with an increase of only 16 per cent in the CPI (inflation) and our population flat-lining at 1.5 percent. This is not restraint and certainly not “austerity” by anyone’s definition.

Spending restraint is becoming more important than ever before. Perhaps because the weather is warming our politicians are floating sunny prognostications but there is an inevitable, relentless sociological cold front headed our way. Stretching our Game of Thrones metaphor, let’s call it “The Wall”.

According to Statistics Canada, that “wall” can be found in baseline population predictions. In 20 years, those over 65 years of age will make up fully 30 per cent of our population. A great majority of those will be out of the workforce and needing higher levels of healthcare. Keep in mind, in 2013, that same cohort made up only 17 per cent of Nova Scotia’s population.

By 2038, the forecasts indicate our median age will be nearly 50 and our overall population is expected to decline to under 934,000.

So who will carry additional tax load? If you’re a voter in your 20’s and 30’s, have a look in the mirror.

While efforts are being made to increase immigration, and claims are being made about having the largest population “ever”, the fact remains, unless we make some fundamental and dramatic changes to the way our government spends, we will be faced with some very, very difficult decisions indeed.

Absent in all of the spending promises in this election is a discussion of any long-term fiscal planning to deal with this issue. By long term, we don’t mean 4 years out, we mean 25 years out. Intergenerational forecasts which will set sustainable spending patterns.

Where are the real plans to deal with the inevitable decline in revenues from a shrinking and aging workforce? While some creative gains are being made through immigration, they are incidental and the problem is not getting people to Nova Scotia, it’s keeping them here. More than half of those who arrive leave within five years.

It’s not much wonder as we’ve been struggling with economic growth and carry the some of the highest tax burdens in the country. Our public service is nearly 5 points larger than the national average and their salaries and benefits are completely out of whack with private sector norms. Is anybody connecting the dots?

Meanwhile, the front pages are littered with political spending sprees.

Small business owners want politicians to have the courage to not just stop the bleeding, but begin to fix the problem through an actual reduction in the size of government, lowering the costs of doing business and a putting laser-like focus on better regulation and more efficient service delivery.

If not, we are sentencing our next generation to a cold, bleak future, on the other side of the wall.

This originally appeared in the Chronicle Herald, May 13, 2017

Fall Back Up

Jordi FBU Cover 3.01

This week on Fall Back Up, I have two podcasts for you to enjoy with two exceptional people.

The intent of this podcast is to is to provide you with engaging and thoughtful insights into Atlantic Canada through conversations with business leaders, innovators and high performers.

First up this week, one of Atlantic Canada’s digital pioneers. Back in the early 90’s Malcolm Fraser saw a business opportunity in this thing called the Internet. Over the years he built Internet Solutions Limited (ISL) into one of Atlantic Canada’s largest web marketing and development companies, but as you’ll hear, it wasn’t without some bumps in the road.

MalcolmIMG_2060-1000x464-1401900483He is an active member of the business community and has been recognized as one of Atlantic Canada’s Top 50 CEOs and is now the Vice President and Managing Director, Halifax at FCV Interactive.

In this episode we have a wide ranging conversation about the early days of the Internet, what business needs to know about adapting to new digital marketing environments, and what’s really going on in the background while you’re scrolling through social media.

The second episode is with Dr. Jeremy Koenig, a fascinating guy who I first met when I was looking to get in shape to run the Bluenose Marathon in 2012. While I never became marathon man, he did manage to whip my 50 year old carcass into the best shape it had been in for 30 years.

Jeremy is a geneticist and athlete. He got his PhD in biochemistry and molecular biologyJeremy_New specializing in genetics. As he tells it, he ran track because it fed his need to train.

After teaching nutrigenomics at Mount St. Vincent University and training high-performance athletes, in 2014, he launched Athletigen in cooperation with the high tech incubation hub Volta Labs. Athletigen uses proprietary software which looks at an athlete’s DNA to uncover data about strengths, weaknesses and ideal diets.

In another wide ranging conversation, we talk about how he landed in Halifax, how DNA analysis could be a game changer in personal health care and thoughts on success and failure.

If you have any feedback, comments, or suggestions, please be sure to leave a quick note on the comments section of my site.

To access the podcasts, there are a few options here. You can click on the pictures above, take this link to my PodBean site and you also can now also find Fall Back Up on  Stitcher or  iTunes.  The Soundcloud versions are below. I’m testing to see what works best so let me know if you have a preference of platform.

Have a great weekend.

 

Fall Back Up

Jordi FBU Cover 3.01I’m delighted to announce the launch of my podcast, Fall Back Up.

It’s a weird name, I know. The idea is to explore the experiences of business leaders, entrepreneurs, innovators and high performers in Atlantic Canada. The idea behind “Fall Back Up” is the exploration of  life’s missteps as they relate to individual growth.

I’ve had a broadcasting career spanning over 40 years. If it’s in the realm, I think I’ve done it. From reporting news to interviewing and long-form journalism to rock radio, music television, sports and the weather, I’ve had the opportunity to interview some of the more fascinating people on earth. In Canadian politics I’ve talked to everyone from Stephen Lewis to Stephen Harper. In the music world, it’s ranged from AC/DC to Frank Zappa.

And pretty much everything in between.

So I’ve taken to listening to Tim Ferriss. Tim has a podcast where he deconstructs ‘world class’ performers to tease out habits, rituals, and their approaches to living. He talks regularly to an impressive list of innovators and thought leaders, trying to pull out some of the techniques they use to achieve amazing results, from Arnold Schwarzenegger and Tony Robbins to Navy SEAL generals and Internet billionaires. It’s personal, practical and compelling. You can find the podcast at www.fourhourworkweek.com. I’d highly recommend it.

Tim’s podcast served as an inspiration for me. I’ve lived in Atlantic Canada all my adult life, and as mentioned, I’ve had the privilege while working in broadcasting to meet a boatload of fascinating people from all walks of life. Since I jumped on board with the Canadian Federation of Independent Business (CFIB) as the legislative lead in the Atlantic region, I’ve not only expanded my exposure to people but to many profoundly interesting stories of entrepreneurship and personal growth.

This podcast is not about public policy, but we’ll discuss it, it’s not about economics, but we’ll discuss it, it’s not about politics, mental health, taxes, failure or success, but we’ll talk about all those things too. This podcast is about people. The people who make up the fabric of this fabulous place we call home. I’ll leave the ‘world class” designation to Tim, I’m looking to talk to ‘Atlantic Canadian class’ people because they are the folks who exemplify the spirit of our place and as is very often the case, they are, in fact, world class.

I hope you take some time to listen.

I want this to be a two-way communication. The funny thing about being in broadcasting this long is you get very used to putting stuff out, but less adept at getting feedback. I want to hear from you. Leave a comment on my site. If you like it as is…terrific, if you think it can be better, please tell me how.

I’m interested in hearing your thoughts on the people interviewed and your perspectives on the topics raised. I’ll be keeping the tone respectful and I expect the same from anyone providing feedback. I’ll be moderating comments. Also, if there’s someone specific you’d like to hear interviewed, let me know. If I agree, I may be in touch with you to do some networking.

I want also to take a moment to thank Jim Robson and Russell Grosse at CIOE, 97.5 FM, the community radio station in Lower Sackville, Nova Scotia. Jim and I started talking about doing some kind of business-oriented radio show about a year ago, and after a lot of thought and some pretty bad first attempts, this is what emerged. All the folks at CIOE are so committed to doing something good for the community, they deserve a huge pat on the back. Thanks for letting me be a part of it. I edit these interviews and provide a bit shorter version to the station and they are gracious enough to air it every Tuesday at noon. Community radio is a pretty awesome little movement.

If you’re arriving here through social media platforms (Twitter, LinkedIn, Facebook, Google+), I’d also recommend you check out The MacDonald Notebook. I’m delighted to have the opportunity to contribute to Andrew MacDonald’s new subscription based weekend newsletter with the podcast and commentary. Andrew has a deep, rich journalism background and is one of the founders of AllNovaScotia.com, the excellent business and politics online news outlet. You can subscribe to Andrew’s weekend read for only $3.50 per issue at themacdonaldnotebook.ca

All this being said, welcome to the first edition of Fall Back Up, today with the Chairman of Clearwater Seafoods, Business Hall of Fame Laureate, philanthropist, music fan and family guy…the inimitable, Colin MacDonald.

Colin MacDonald Clearwater

In the mid 70’s Colin MacDonald and John Risley opened up a small retail lobster shop on what was then, the outskirts of Bedford Nova Scotia. 40 years later Clearwater has grown into one of the world’s leading seafood companies. With a combination of enthusiasm and grit and a little help from their friends, the duo changed the face of seafood exporting in Atlantic Canada.

MacDonald grew up in Fairview, just down the road, in a family familiar with hard work and the rough and tumble of suburban Halifax. In this conversation, he explores his early days, dealing with adversity, the politics of the fishery and how he views both success and failure.

Nova Scotia’s pre election budget: anger and gratitude

delorey mcneil
Nova Scotia Finance Minister Randy DeLorey looks on as Premier Stephen McNeil speaks in Nova Scotia Legislature 

Premier Stephen McNeil must be listening to Tony Robbins. One of the tenets of the motivational speaker’s philosophy is it’s impossible to be angry and grateful at the same time. McNeil’s recent budget leverages the idea in spades.

CFIB members have been lobbying for tax relief over the last four years. Finance Minister Randy DeLorey delivered one of our key asks, to raise the small business tax threshold from $350,000 to $500,000, giving small business owners the capacity to retain more money in their business to innovate and create employment. Check that box.

Additionally, we’ve been adamant about providing some relief on personal income taxes, especially so lower-income earners can keep more of their earnings.

By raising the basic personal exemption by up to $3,000 for those earning less than $75,000, many low-and-middle-income earners in the province will see more of their paycheck, a much preferable mechanism than raising the minimum wage.

As we’ve argued for years, as a poverty-reduction measure, minimum wage is ineffective because government becomes the principal beneficiary through higher taxes. With this adjustment to the basic personal exemption, thousands more lower-income Nova Scotians will pay no provincial tax at all.

Another positive benefit of the budget for small business owners is the provincial government’s measurable commitment to reduce red tape. This is a principal file for CFIB. We have been supportive of the efforts of this government to put in place the structures to begin reducing unnecessary regulatory burden. Nailing down a target of $25 million in cost to business is the right thing to do.

CFIB members will be grateful for these improvements, which may temper taxpayer anger heading into the predicted provincial election. While these measures are sensible, and should be commended, there is still much work to be done on tax reform to put Nova Scotia in a competitive position.

We remain concerned, however, about the propensity of government to create boutique programs to benefit specific sectors. While there are programs geared toward small business growth in areas such as export and innovation, historically the programs go largely unnoticed or unused.

Leaving more money in the hands of small business owners to reinvest, without forcing them through the rigours of bureaucratic process to access benefits is a far more efficient and desirable approach.

Preparing for an election, it’s not hard to see why this government has chosen the former option. It provides more control over who will be the principal beneficiaries and constituencies. That is a simple political calculation.

Many small business owners remain frustrated by high taxes and governments that seem out of touch or ambivalent to their needs. This is a good start, but it’s only a start.

It has been a very long time since the people in Nova Scotia have seen any meaningful tax relief at all. A morsel can seem like a feast for the starving. Now that the math is done in the Department of Finance, it will, presumably, be put to the people of Nova Scotia to determine if they are indeed grateful or angry.

This post originally appeared in the Chronicle Herald, April 29, 2017 on day prior to the call of the 2017 provincial election.

Cap and Trade for Nova Scotia Still Fuzzy for Small Business

cap-and-trade

The Nova Scotia government’s decision to go it alone with cap-and-trade to put a price on carbon raises more questions than answers.

This spring, government released a discussion paper, looking for feedback. They gave less than a month for responses and you needed a degree in environmental science to make any sense of what was being asked.

At an information session, executive director Jason Hollett of the climate change unit tried valiantly to outline a coherent picture, but he was working within an unreasonably tight timeline and without all the tools. In spite of a commendable effort, many left the session scratching their heads. Under questioning, somewhat ominously, he referred to the scheme as “a big regulatory beast.”

Without much heavy industry, Nova Scotia has few large greenhouse gas (GHG) emitters. Our coal-burning generating stations are pumping out the lion’s share (44 per cent). The transportation industry creates 27 per cent, followed by commercial and residential heat (combined 13 per cent) and the oil and gas industry (five per cent). The remainder comes from waste, agriculture and other industry.

For years, Nova Scotians have been paying through the nose to achieve GHG reductions through transition to renewable electricity generation and efficiency. We can pat ourselves on the back. After coughing up the highest power rates in the country over the last 10 years, our renewable portfolio has grown from seven to 27 per cent, exceeding our reduction targets.

Apparently unsatisfied with this progress, the Trudeau government, riding its mandate to legislate away climatic catastrophe, told Nova Scotia to put a price on carbon by 2018 or we’ll do it for you. The McNeil government initially balked, then came up with what it felt was the best option, a go-it-alone cap-and trade-system.

Using cap and trade, the premier successfully avoided the “carbon tax” narrative, opting instead for what appears to be a more saleable version.

The proposed Nova Scotia cap-and-trade model is fairly simple, but its administration is expected to be complex and therefore, presumably, costly.

Government will cap the amount of GHGs emitted into the atmosphere, hand out free credits for that tonnage to this handful of larger polluters and they can trade among themselves. When someone needs more, they can buy in this tiny market of emitters. How that will affect price is unclear.

A central tenet of carbon pricing is revenue neutrality. But with this plan, at least for now, there is no clarity in respect to dollars changing hands or how it will affect the price of electricity or fuel. Other questions: Will the incentive to be greener simply be higher energy and transportation costs? What would be the offset?

Moving ahead without the required evidence in respect to cost and competitiveness will frustrate business owners. In spite of a stated intention by government to measure and cost all regulation prior to application, none of these calculations are yet available.

While public servants are trying to align regulations between provinces to break down trade barriers, Nova Scotia’s approach (in spite of the premier’s openness to having the other Atlantic provinces jump on board) could result in two, three or four carbon pricing schemes in the region.

cap and trade chart

CFIB members support environmental initiatives. Seventy-nine per cent believe it is possible to grow the economy and protect the environment at the same time. But 80 per cent say government must consider the cost to small business before implementing a mechanism to price carbon. That means measuring and communicating real economic costs and environmental benefits and establishing a reasonable window for consultation and implementation.

In light of the work by this government to improve the regulatory environment, introduction of a “regulatory beast” feels counter-intuitive and environmental and economic impacts are still fuzzy. For something of this size and importance to be a cost of doing business in Nova Scotia, we need clarity.

This originally appeared in the Chronicle Herald, April 26, 2017

The Atlantic Provinces “special snowflake” syndrome.

special-snowflake

The term “special snowflake” is generally used as a term of derision in the service industry. It comes from the term parents may use for their singularly wonderful child being “special”, like a “snowflake”.

After being popularized in the 1999 movie Fight Club, the term has transmuted into a sneering reference to those who feel they are or-so-very unique, but generally fall into columns of all-too-common attributes.

Kind of like our provincial governments.

In many ways, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador are indeed unique. The geography is somewhat different, the weather is more severe in some areas and in some locales, we speak in unique and charming dialects.

Beyond that, all of us, all 2.4 million Atlantic Canadians, are dealing with pretty much the same thing. Our economies are primarily resource based, we are in debt up to our ears (personally and publicly) and for a population slightly smaller than downtown Toronto, we are grossly over-governed with far too many people living on the public dime.

22.6% of all jobs in Atlantic Canada are in the civilian public sector. That’s fully five points above the national average.

To add to this problem, the public service continues to grow while public sector unions complain about “austerity” when governments simply try to reduce the speed of spending growth. There has been only one year in this century that Nova Scotia has seen a drop in the percentage growth of program spending, while most years spending has far exceeded the benchmark of population growth and inflation.

Do you feel we are getting 3 billion dollars worth of better government than we did in 2007? I didn’t think so.

To govern us across this region we elect almost 200 federal and provincial politicians and if we are counting just the major census areas (not including small villages, towns, county and other governments) we elect a total of 137 municipal councilors. To manage just the municipal and provincial affairs of the region we are forking over in excess of 33 billion dollars to politicians and the public service.

If we were getting absolutely awesome service from our over-investment in politicians and the public service, perhaps we wouldn’t have reason to complain. If we were getting “World Class” public services, we could all look at our tax bills and rejoice at the universal higher standards of living here in Atlantic Canada.

Except we don’t because the vast majority of our citizens know our total tax burden is much too high and “government customer service” is the punchline to a joke.

For mostly parochial or political reasons, governments in Atlantic Canada have historically felt our uniqueness trumped all. Because our respective provinces were somehow unlike any other province in the region, it was necessary to have separate provincial regulations, laws, and labour standards reflecting our “specialness”.

Not so much. There is no longer any rational economic justification for the layers of unnecessary governance Atlantic Canadians must contend with. A recent APEC report clearly explains the problem and quantifies the burden, and it isn’t pretty.

However, a glimmer of hope has arisen in our region. Perhaps because of the tireless lobbying of group like CFIB, or maybe the stars lined up to provide four political parties of the same stripe in power at one given time, or perhaps just because of the urgent need to finally try to address the problem, we have a body to attack some of our ridiculous regional redundancies.

With Newfoundland and Labrador signing on in December to complete the quartet at the Joint Office of Regulatory Affairs, the region now has a central tool to start dismantling some of the unnecessary costs and confusion that comes with four sets of rules to do business.

While such an event may have only titillated the wonkiest of public policy aficionados, it could prove to be a pivotal moment in the political and economic evolution of our region.

If the four governments finally come to grip with reality and accept the tax load on our shrinking population to support our unnecessary layers of government is unsustainable and must be lowered,  if they can come together to find governance efficiencies between provinces and enact sensible regulatory and interprovincial trade policy, perhaps Atlantic Canada has a fighting a chance at being a special snowflake.

Cutting Red Tape: An old problem finding new solutions

scissor-red-tape

I was having coffee with an old political warhorse recently and we were talking about red tape. He told me a story about how after John Buchanan won the 1981 election, his government promised to cut red tape. The classic line from Digby Liberal Joe Casey in the legislature was, “He sure is cutting, but lengthwise.”

This is to say, there’s nothing really new about politicians promising to cut red tape. The idea has been kicked around for years because red tape is a horrible drag on the economy. What’s new, however, is after years of hounding federal and provincial governments, the Canadian Federation of Independent Business (CFIB) is beginning to see some results.

To give credit where it is due, during John Hamm’s government, there was some movement on red tape, but it was no secret the bureaucracy regarded the project as bothersome. The “Better Regulation” initiative was largely ignored, then quietly shelved during Rodney MacDonald’s years and completely jettisoned during the Darrell Dexter years.

However, under Stephen McNeil regulatory reform has been revived and Nova Scotia’s grade on CFIB’s annual Red Tape Report Card has climbed from the “D” he inherited in 2013. As it is Red Tape Awareness Week, CFIB is announcing Nova Scotia is receiving a mark of “B” for 2016 putting the province back in the top half of Canadian jurisdictions.

The improvement in the mark is not because we’ve seen significant regulatory burden reduced for business, it’s because of the political leadership and excellent groundwork completed by a small group of dedicated individuals led by Chief Regulatory Officer, Fred Crooks.

We were very pleased to see Regulatory Accountability and Reporting Act passed, the creation of the Joint Office of Regulatory Affairs and Service Effectiveness, the Premiers’ Charter of Governing Principles for Regulation adopted, the creation and implementation of the ground-breaking business economic impact analysis tool and the initiation of a “Business Navigation” project to help new businesses get off the ground.

In particular, the Premiers’ Charter is a beacon of hope for small businesses in Nova Scotia. The commitment to enact fewer and better regulations, as well as the cost-for-cost rule, should keep the current regulatory burden in check. It’s now also been adopted by the three other Atlantic Provinces with mirror legislation as part of their participation in the Joint Office.

While this is all good, to see improved satisfaction levels from business owners, the government must begin producing results in time and/or money saved. With new technologies designed to make secure, online transaction readily available, there are tremendous opportunities for government to find creative solutions to cut costs, fix the government customer service experience, measure improvement and deliver real results.

To advance this, CFIB is recommending the province establish a baseline measurement of the existing red tape burden faced by Nova Scotia’s small businesses, set clear targets for its reduction, and publicly report on how it’s going. We believe only accountability will force this innovation.

If the Premier really wants to make Nova Scotia “the best regulatory environment in Canada”, we need to get at it, and now. The groundwork is done, it’s time to take action. Let’s navigate away from bureaucracies that are simply held accountable for process and move to a service oriented public sector that is held accountable for results.

This article was originally published in the Chronicle Herald on Thursday, January 26, 2017 

We have all the evidence we need. It’s time for action to support small business

reports1

How many more studies until government finally takes the necessary steps to fix the drag on our regional economy?

There have been many reports generated to reinforce that which we already know. We know this because we’ve written many of them.

From CFIB’s work on inter-provincial trade barriers to multiple pre-budget submissions, red tape report cards, and other position statements, our members have consistently identified regulatory burden and taxation levels as the primary constraints on their business growth.

The latest, compelling piece of proof, comes from the government’s own joint office of regulatory affairs via Atlantic Provinces Economic Council (APEC). The new APEC project, Trade Barriers in Atlantic Canada: Opportunities for Regulatory Reform, reinforces what CFIB has been repeating for years; red tape and trade barriers are destructive to our economy.

The author, economist David Chaundy, says it’s some of the most significant work he’s ever done. In a career that has seen plenty of economic analysis of our region, that’s saying something. We were pleased here at CFIB to see APEC provide clear quantification of the problem. We believe this report, along with the other work we and other groups have presented, provides plenty of evidence to put regulatory reform (red tape) and interprovincial trade barriers squarely on the front burner in Atlantic Canada.

If governments in our region are serious about doing something meaningful to assist economic growth (as they should if we want to avoid plummeting head-first into a demographic abyss), it’s time everybody gets with the program.

Chaundy’s work identifies how the Atlantic provinces, more than any other region in the country, suffer economically under the weight of unnecessary regulation and inter-provincial trade barriers. It points to recent research which estimates the gains from removing all trade barriers in Canada could be as high as 3.3 per cent of GDP ($65 billion). This translates proportionately to even greater gains in the Atlantic region of 7.6 per cent of GDP or $8.5 billion.

trade-liberalization
From Trade Barriers in Atlantic Canada – APEC 2016

To put it in more relatable terms, this kind of cost reduction is the equivalent of an after-tax income increase of $2,000 for every person in Atlantic Canada.

Lowering interprovincial trade costs for Atlantic businesses will also improve their international competitiveness. With the signing of the Canada and European Union Comprehensive Economic and Trade Agreement (CETA), eliminating regional trade barriers have now become increasingly more urgent and more important.

Freeing up trade restrictions must become a central ingredient in the economic growth model being prioritized by each of the Atlantic provinces. It’s time for politicians to discard Donald Trump style parochial protectionism in favour of unfettered interprovincial free trade.

We have enough reports now all pointing in the same direction. As we noted at the time of its inception, the joint office of regulatory affairs can play a pivotal role in dismantling these trade barriers, removing red tape and setting our region on a path toward greater economic growth and prosperity.

There have been some good first steps, but each of the provinces now must re-double its efforts to tackle these important issues. With the body of evidence in front of them, the premiers must unify behind and forcefully advance this agenda.