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Scott Brison’s plan to avoid a Greek tragedy in Maritimes

Scott Brison believes the Maritime provinces are a decade away from calamity. He thinks he knows how to prevent it.

"We are at the tipping point," the Nova Scotia Liberal MP said Sunday in an interview. Debt is expanding even as fiscal capacity is shrinking. Maritime governments could soon find it increasingly difficult to raise money from lenders.

"My message is actually one of hope, because it's not too late," said Mr. Brison. "But in a very short period of time it will be."

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In a speech Friday to the Atlantic Institute for Market Studies, Mr. Brison laid out in stark detail just how close his home province has come to insolvency:

– Nova Scotia's debt has topped $12-billion. "If you combine our share of the federal debt with our provincial debt as a percentage of our GDP, our fiscal situation is about as dire as that of European economies like Portugal, Italy, Greece and Spain just before they hit the tipping point," Mr. Brison observed in his speech.

– So determined are young people to get out of the province that in the past five years alone the median age has increased from 42 to almost 44, and the population over 65 has increased from 15.1 per cent to 16.6 per cent. Three thousand fewer children start school every year.

– Raising new revenue to eliminate the deficit and reduce debt is a limited option. Corporate income taxes are already the highest in the country; so are electricity rates. Nova Scotia ties with PEI for the highest sales-tax rate (15 per cent); income-tax rates are second only to Quebec's.

"These trends should scare the heck out of us," Mr. Brison concluded in his speech.

They point to a near future that could look something like this: Fewer and older people are forced to pay ever higher taxes and energy rates to sustain fixed capital costs, driving out the few remaining industries. Impatient taxpayers in other provinces refuse to bridge the gap through increased equalization payments. Spooked lenders start charging interest rates so high that the province cannot borrow and Ottawa has to intervene, imposing grinding austerity on the region in order to get the books balanced and debt under control.

This doesn't have to happen. Although Mr. Brison does not support the trio of Conservative senators who advocate Maritime political union, he does propose economic union, which he calls a New East Partnership and Trade Agreement Plus.

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That title may remind you of something. The New West Partnership of British Columbia, Alberta and Saskatchewan will be fully implemented by July 1. Workers can move freely between provinces without requiring additional certification; all governments commit to treating out-of-province firms equally in procurement contracts; regulations are being made mutually compatible; and the three governments seek opportunities for joint procurement.

A similar economic union in Atlantic Canada, Mr. Brison believes, would promote regional growth while reducing government costs. He also wants to see a regional strategy to encourage immigration, a regional securities regulator and an Atlantic Liquor Commission.

He would dream farther. There is nothing in the existing New West Partnership to prevent any or all Atlantic provinces from joining it, he observes, though "obviously there would be a name change."

This writer wonders whether a future Ontario government couldn't also join, finally creating an English Canadian economic union. Quebec, as is almost always the case, would probably prefer to go its own way.

If Mr. Brison's prescriptions are not sufficient to reverse Maritime Canada's relentless decline, they at least point the provinces in the right direction.

"While the decisions may seem difficult now," he warned, "they will be much easier than the excruciatingly painful ones that will be imposed on us in 10 years."

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The alternative is to go past the tipping point and see what happens. That route is easy. All politicians have to do is nothing.

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About the Author

John Ibbitson started at The Globe in 1999 and has been Queen's Park columnist and Ottawa political affairs correspondent.Most recently, he was a correspondent and columnist in Washington, where he wrote Open and Shut: Why America has Barack Obama and Canada has Stephen Harper. He returned to Ottawa as bureau chief in 2009. More


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