Dan Leger writes a worthy column in today's Chronicle Herald. I hope Nova Scotians are paying attention. His message is that we've got to back out of the "private financing" is bad mentality, something that New Brunswick is easing out of and now gives them success.
Leger is right to lampoon this province for having no evident economic growth principle beyond demanding more money from Ottawa. Do we have no shame? Even if it was our money that seeded the growth of the West, where's the pride in taking money off them now with no end in sight?
Increased equalization may give us a fleeting sense of triumph when in the long run it really only solidifies in our souls a "can't do it but for them" mindset. In fact to answer Leger's question, I fear that has become the defining principle of economic growth in our fair province. We must shake it loose.
Where is the spirit of those of our ancestors who founded Canada? They didn't demand money from government, either local or European as if it were an entitlement. Individuals built up the economy on their own in one of the toughest locations on the continent. And now, we've grown so dependent on the state that we've forgotten that.
I take issue with Leger's statement that government should partner with business though, because that's a recipe for corruption and disaster. Government should in fact be a bystander. It should get out of the hair of businesses who are working to create wealth by keeping taxes low and regulations to a minimum.
Enterprise oriented individuals may complain about Rodney MacDonald's equalization pandering and old style business subsidizing, but he will only stake out so much political capital on taking the province where it doesn't want to go. Unless we get more demands like Leger's, the Premier won't free the market.
Showing posts with label rodney macdonald. Show all posts
Showing posts with label rodney macdonald. Show all posts
Monday, November 5, 2007
Saturday, November 3, 2007
Wealth Creation Equals Poverty Reduction
In today's Chronicle Herald, Ralph Surette swoons over recent statements by the UN special envoy to housing and concludes that more forced wealth redistribution would help Nova Scotia. Surette notes that tax-cutting and privatizing has prevailed in Canada over the last two decades. Unfortunately, he fails to connect those measures with Canada and "all its wealth" that he approvingly cites from the envoy.
It's old style thinking from people like Surette that keep our province poor. He wants Nova Scotians to be dependent on the state and dependent on Western cash. After all, "poverty reduction" is just a code for state seizure of property as if we are slaves whose belongings can be taken from us at any time.
In Surette's world, a province already as poor as Nova Scotia would jack up welfare payments, luring more vulnerable citizens into dependency, and jack up taxes, driving more capital to the West. He'd finance this all by taking more money from the West, making us all helpless without their contributions. Sure enough, this province will stay poor and he'd wonder why.
On the other hand, Prime Minister Stephen Harper (a former economist) understands that the best form of poverty reduction is wealth creation. Wealth is not a fixed commodity--it can be created. Does Surette know this? Knowing journalists, he's probably not well versed in either economics or math. To create wealth, the right conditions must be laid, because wealth creators can pack up and move.
Premier Rodney MacDonald, a nice fellow though no economist, finally seems to have caught on to this. He still practices old fashioned business subsidizing, but he is sincere enough to be improving business conditions and busy attracting businesses to Nova Scotia. Of course, the reason he has to try so hard is that business conditions are lousy. (If you were a business owner would you freely choose this jurisdiction out of all the others in Canada to set up shop? Didn't think so.)
Nova Scotia's per capita GDP is less than half that of Alberta's so in fact we're pretty much all poor; we all need poverty reduction. And businesses, with that thing they provide called jobs, are the best way to do that. Lets stop giving them reasons to not start and thrive out here.
Perhaps some wealth redistribution is justified, but let's be real about this: there must be wealth to redistribute in the first place. You can't scare it all away and then demand that it be there to pass around.
It's old style thinking from people like Surette that keep our province poor. He wants Nova Scotians to be dependent on the state and dependent on Western cash. After all, "poverty reduction" is just a code for state seizure of property as if we are slaves whose belongings can be taken from us at any time.
In Surette's world, a province already as poor as Nova Scotia would jack up welfare payments, luring more vulnerable citizens into dependency, and jack up taxes, driving more capital to the West. He'd finance this all by taking more money from the West, making us all helpless without their contributions. Sure enough, this province will stay poor and he'd wonder why.
On the other hand, Prime Minister Stephen Harper (a former economist) understands that the best form of poverty reduction is wealth creation. Wealth is not a fixed commodity--it can be created. Does Surette know this? Knowing journalists, he's probably not well versed in either economics or math. To create wealth, the right conditions must be laid, because wealth creators can pack up and move.
Premier Rodney MacDonald, a nice fellow though no economist, finally seems to have caught on to this. He still practices old fashioned business subsidizing, but he is sincere enough to be improving business conditions and busy attracting businesses to Nova Scotia. Of course, the reason he has to try so hard is that business conditions are lousy. (If you were a business owner would you freely choose this jurisdiction out of all the others in Canada to set up shop? Didn't think so.)
Nova Scotia's per capita GDP is less than half that of Alberta's so in fact we're pretty much all poor; we all need poverty reduction. And businesses, with that thing they provide called jobs, are the best way to do that. Lets stop giving them reasons to not start and thrive out here.
Perhaps some wealth redistribution is justified, but let's be real about this: there must be wealth to redistribute in the first place. You can't scare it all away and then demand that it be there to pass around.
Thursday, April 5, 2007
TrentonWorks Closes Due to Losses
The closing of the TrentonWorks railcar plant in Pictou County will cost 330 jobs, but given the losses the plant was throwing up, who can really blame the management?
The plant lost $2.2 million dollars in after tax dollars this second quarter (ending Feb. 28) according to the Chronicle Herald, but that's just one way of putting how bad it was. Writes the Greenbrier Companies:
In this case, criticizing Greenbrier won't get the plant back. Perhaps government "help" could have changed things, but at what cost? Giving the plant $2.3 million a quarter still won't be able to make it beat a Mexican site.
So what's Nova Scotia to do? Well, plant closures are a fact of economic life. This goes back to industrial revolution times. The key is to create an environment where new plants are encouraged to spring to life. The NDP certainly won't help do that, so it's all on Progressive Conservative Premier Rodney MacDonald.
The plant lost $2.2 million dollars in after tax dollars this second quarter (ending Feb. 28) according to the Chronicle Herald, but that's just one way of putting how bad it was. Writes the Greenbrier Companies:
The net loss for the current period includes a special charge of $16.5 million associated with the impairment of assets at the Company's Canadian manufacturing operation, and an $8.6 million tax benefit associated with the write-off of the Canadian investment for tax purposes, for a combined loss of $7.9 million, or $.49 per diluted share. In addition, the net loss for the period includes operating losses of the Company's Canadian facility of $2.2 million, or $.14 per share.Big figures. Late nights with accountants and tax lawyers. And if not for the plant in Nova Scotia?
Exclusive of the Canadian facility's operating losses, the impairment charge, and the tax benefit, Greenbrier's earnings for the quarter were $4.0 million, or $.25 per diluted share.Corporations are favourite targets of populist attack because they are big, yet as big as they are, they are weak. When consumers stop purchasing, they lose money and quickly retreat.
In this case, criticizing Greenbrier won't get the plant back. Perhaps government "help" could have changed things, but at what cost? Giving the plant $2.3 million a quarter still won't be able to make it beat a Mexican site.
So what's Nova Scotia to do? Well, plant closures are a fact of economic life. This goes back to industrial revolution times. The key is to create an environment where new plants are encouraged to spring to life. The NDP certainly won't help do that, so it's all on Progressive Conservative Premier Rodney MacDonald.
Tuesday, April 3, 2007
Getting Over Equalization
The Chronicle Herald reports today that, "Foreign Affairs Minister Peter MacKay says it’s time for Nova Scotia’s premier to move beyond the rhetoric and recognize that the federal budget and new equalization deal were good for the province." That is not unreasonable.
The Nova Scotia government was recently given the choice to either get more money now and lose the Atlantic Accord, or to keep the Atlantic Accord but to get less equalization money. For the time being, the government has chose the former.
Premier Rodney MacDonald however, claims Ottawa forced Nova Scotia to tear up the Accord in order to get more federal money now. Nova Scotia was certainly given a tough choice, but it is exaggerated to say the choice was "forced".
Perhaps forced is correct if Nova Scotia was going to balance its budget again and still spend at an unsustainable rate. Nobody says the province has to spend so much. Certainly not at a higher rate than inflation as in this year's budget. Then the province could could keep the Atlantic Accord.
It's time to stop crying for federal money. Sure, equalization is a constitutional right, but it's a drug that only makes the province worse off. While we're hooked, it's hard to see that our economy will actually improve.
The Nova Scotia government was recently given the choice to either get more money now and lose the Atlantic Accord, or to keep the Atlantic Accord but to get less equalization money. For the time being, the government has chose the former.
Premier Rodney MacDonald however, claims Ottawa forced Nova Scotia to tear up the Accord in order to get more federal money now. Nova Scotia was certainly given a tough choice, but it is exaggerated to say the choice was "forced".
Perhaps forced is correct if Nova Scotia was going to balance its budget again and still spend at an unsustainable rate. Nobody says the province has to spend so much. Certainly not at a higher rate than inflation as in this year's budget. Then the province could could keep the Atlantic Accord.
It's time to stop crying for federal money. Sure, equalization is a constitutional right, but it's a drug that only makes the province worse off. While we're hooked, it's hard to see that our economy will actually improve.
Friday, March 23, 2007
2007-08 Nova Scotia Budget
The Nova Scotia Budget is out. "Balanced" though it's supposed to be, spending will out pace economic growth.Schedule 15 shows that the programs expenditures forecast for 2006-2007 is $6.495 billion. The 2007-2008 programs expenditures estimate is $6.917 billion. That's an increase of 6.5%. Meanwhile, the Nova Scotia Real GDP Growth rate is forecast to be 2.2% for both 2007 and 2008 (on p. B8).
Yesterday, the Province embarked on a "sustainability" campaign. Given that Nova Scotia's population rate is stagnant and that retirees rate is increasing, one just has to wonder about the commitment to economic sustainability.
I guess sustainable means using money from Alberta and Ontario. Sustainable off the backs of others.
Nevertheless, budgets are political documents. The Tories are in a minority position (propped up by a Liberal shell) and this might just be all they could do. It's no doubt better than what the NDP would have done.
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