April has been a busy month for the Chamber as both the provincial and municipal governments released their budgets. These two documents gave us, and the business community, a lot to digest. In case you did not have time to catch-up on what happened, here is what the Chamber thought about each budget:
The Chamber was disappointed, but not surprised, that the provincial government will be running a deficit of $279 million this year. Given the large shortfall tabled by Minister Whalen in December, it was clear it would take more than one year to balance the budget.
What matters most is that the government is not planning to balance the budget for three years. With our debt currently at $14.6 billion and rising, we strongly believe that Nova Scotia needs a balanced budget sooner than 2017. Spending has also increased sharply compared to past years, which we hope is not the start of a long-term trend.
The budget does have some positives for business. The ongoing Tax and Regulatory and Fee Review has the potential to lower the tax burden and remove many longstanding regulatory barriers. The enhancement of Access to Business, reforms to the province’s apprenticeship program, and the new Graduate to Opportunities program will help business deal with red tape and retain talent. We are also pleased to see that the government has fulfilled its promise to provide Metro Transit with $2 million in funding.
While this budget does contain some good initiatives, we believe that the government’s fiscal plan does not do enough to address the province’s serious financial situation.
This year’s municipal budget has good and bad news for businesses. Commercial taxes are still going up, with the average commercial tax bill rising by 2.3%. While 57% of businesses will not see an increase, the Chamber notes that will do little to comfort the 43% of businesses who have to deal with rising costs.
On the positive side, city leaders have reduced the commercial tax rate. As well, the commercial sector’s share of total revenue has declined – these are both forward-looking indicators that show Council is looking to create a positive business environment while balancing fiscal pressures.
The Chamber is pleased to see that the City is continuing to adhere to its Multi-Year Financial Strategy. The City has a good track record of reducing its debt and we hope to see that continue. It is also encouraging to see that the City is performing well on the province’s Financial Condition Index.
Finally, the Chamber’s Pre-Budget Submission called on the HRM to place a higher priority the Regional Centre Plan and Transit and we were pleased to see they will both be strategic priorities in 2014. On the risk side, we continue to urge HRM to fulfill its promise of a pension review to rein in spending increases.
Eric Blake is the Policy and Research Analyst for the Halifax Chamber of Commerce. His responsibilities include providing supporting research for the Chamber’s policy positions; drafting its submissions to government; and coordinating the Chamber’s two Task Forces and its Energy Committee. Eric studied International Relations and Economics at Mount Allison University before completing a Masters of Public Administration at Queen’s University. He also spent a year traveling New Zealand with his fiancée and came back with a love of meat pies and Kiwis (the animal). He can be reached at (902) 481-1351 or email@example.com.