NS Politics

Everything is politics, at least to someone.

Category: NS Politics

  • Untax and Spend.

    I’m the last registered socialist.

    Today Prime Minister Carney announced that Canada will hit the NATO 2% of GDP target for military spending within the next year. This was inevitable, or at least moving in this direction was. It’s as close to a bipartisan issue within the NATO countries you could hope to find. It will help Canada’s credibility if we try to shore up defence agreements with Europe, as the USA starts indicating it doesn’t want to include us (or Europe based on the leaked signal chats) anymore.

    As much as I might dream morally of a world with no need for military and war, we don’t live in that world. All evidence points to humanity being too confrontational for that message to hold long. Coca-Cola and Pokemon Go only brought us together for so long.

    From the Coca-Cola website themselves, “I’d like to buy the world a coke” Ad from 1971. At least Pokemon Go brought us together a bit more organically.

    So defence spending will have benefits in certain places and to certain people. Like any government spending that isn’t just sent to the shadow realm.

    But turning government spending into more government revenue is a trick only a tax collection agency can pull. So this spending will either increase the deficit, require new taxes, or require cuts elsewhere. Carney indicated cuts elsewhere were likely. After all, he has just cut taxes. Everyone is cutting taxes. Because cost of living is rapidly reaching levels of unbearable and a large cohort of people might revolt if nothing happens to bring it down.

    In the short term this is fine. In the long term we might be kicking a debt crisis down the road where tough decisions will be made at the expense of a lot of people. Again. Recessions are cyclical. Hurrah.

    What seems to baffle us about the economy we created is how to fairly tax income, sales, investments, and corporations. As long as we don’t pull a Romney and get people and corporations confused the answer to this seems to depend entirely on what you hold. Income and sales taxes impact the lower wealth bracket of working age people, most which seems to be the driver of all the recent tax cuts. Capital gains on investments were pitched to be raised, but that was a different Prime Minister so that has since been scraped. Investments do benefit people besides the rich, if you have parents thinking about retirement they are probably relying on them at least partially. Like the cost of housing, once you own them you don’t really want the price to go down or taxes to go up. And I doubt most economic analysts would recommend raising taxes on corporations during a trade war against an American president trying to get them to leave our country for the USA.

    What about wealth? This would probably be the most popular among the general population if we can find a way to do it. Easier said then done I’m sure, since corporations with a lot of money have figured out ways to avoid paying taxes by moving country flags around like a cruise ship. I love a good race to the bottom. It would at least be worth figuring out a method to prevent rich people from taking out loans against their assets, which isn’t taxed since they never sell anything and loans aren’t taxed. Neat trick with Twitter Elon, I wish you nothing but the worst with your Trump breakup.

    So income and sales taxes went down and… nothing else really changed. So government income is lower… and spending is going to be higher. Unless we create growth.

    From halifaxharbourbridges.ca Removing the tolls on the harbour bridges has benefited me but it will cost the province, and thus all provincial taxpayers.

    How do we create that growth? Well resources tend to be taxed differently, companies can’t really bypass resource revenue but it isn’t stable since it depends on the price of the resource. But still, it’s a guaranteed winner for a government looking for more income. Thus the incentive to chase what’s in the ground.

    Do we need more investment? More entrepreneurs? I don’t know, I’m an idiot and would need some experts to advise on what’s possible and advisable. But as someone firmly within the working age that income matters, maybe we should have given the capital gains increase a try.

    And Now, An Aside on Marginal Income Tax Brackets

    If you aren’t aware of how income taxes work in Canada it’s worth knowing the basics of marginal income tax brackets. A salary increase is ALWAYS WORTH TAKING, your take home pay will go up no matter how close you are to the next bracket. There is an argument for some people to chose between overtime pay vs time off in lieu, but that’s a calculation of how much the extra time off is worth to you compared to the money.

    A flat tax is a scheme by the rich to make themselves richer.

    Notice how these are bands. If you made $300k in income, you only get taxed 33% on the last $43k of your income ($300k-$253k). Note this only federal tax rates, but provincial income taxes work the same way.

  • What Minerals Do To A Community

    Easy decisions rarely exist when it comes to natural resources. Shame since I feel like we are due for an easy one.

    As the NS provincial government tries to scope interest in minerals that may or may not be present within the province it might be worth thinking about the general impacts they have on an area.

    The dream.

    Hurry Up and Wait

    Considering this is at the exploration stage we have no confirmed projects to review at the moment. You might know there’s some oil or some uranium somewhere, but you have to figure out quality and cost to extract before you can even make a call if it’s worth getting. Thus exploration first.

    Environmentally, mining anything is never a beneficial activity for the local area. Best case you have no effects and just hold a healthy side of risk. And risks are never zero, there’s not enough money and tech in the world to reduce all risk to zero. The exact environmental risks will depend on what is found and how you extract and process it. The Fort McMurray oil sands for example is near the surface so not hard to find, but it is hard to process oil out of sand. It takes a lot of hot water which results in energy spent to heat it and tailing ponds to hold it. Containment is key and not perfect, Imperial Oil being the most recent large case of spillage.

    A community that’s not in hard times likely won’t want this kind of risk. The counterpoint is an argument for the collective, some risks are worth the benefits after all. So what do we get out of it.

    What We Get

    JOBS! This depends heavily on process. To get a lot of jobs you need something that’s very profitable but requires a lot of maintenance to keep running. Project construction is a lot of jobs initially, but it’s cyclical at best and I would caution against too much excitement to that kind of growth. Companies also love talking about how many indirect jobs they create. It is true in the case of long-term jobs, because if more people live in a place to work, more jobs will be induced by that population (more people need more teachers, more stores, etc). This assumes those workers live in local communities, the benefit will be way lower if remote work camps are built instead.

    Taken from Google Earth. Work camp north of Fort McMurray, AB. Beware, fly-in/fly-out workers don’t benefit the local community much.

    TAXES! Resource revenue is a hell of a drug, get enough of it and you can drop taxes to the floor. For those unaware, Alberta has no provincial sales tax (only the 5% federal tax rate applies) and income tax starts at 8% for the first $60k and only 10% up $151k. As a result the vast majority of government revenue is from oil and gas, so the provincial balance sheet is tied to the price of oil. A best case scenario is the model Norway took to build their oil investment fund now valued at over $1.7 Trillion USD, based on the true realization by their government that their oil will eventually run out. But boy a politician sure looks cool if they can lower taxes today.

    What To Expect When You’re Expecting (a Mine)

    Construction pains. Big projects require a lot of people for the build, and in a rural town they’ll need places to stay. Hotels will be full and it can make the local housing market go crazy if the construction phase is measured in years as temporary people look for apartments to rent. A good time to sell for residents, not a good time to buy for newcomers.

    It’s raining men. Gender parity has not hit construction or trade jobs. If a lot of jobs are created expect a lot of men. I highly recommend the graphical novel Ducks by Kate Beaton for a female perspective on working in the oil sands and its human costs.

    Potential for pretty large wage disparities. This depends entirely on how desperate a worksite is to attract the workers it needs but the market will continue to pay the lowest rate. Resource jobs have tended to pay well for remote and difficult work which might not follow to the rest of the economy. People with too much money and not enough to do don’t always make the best neighbours.

    Giving our grandchildren another ghost town. Resources are limited, markets change, nothing is forever. Something will have to be cleaned up eventually. We have a bad tendency to ignore it when we know we won’t have to deal with it ourselves due to our inevitable death.

    Final Stuff

    None of this is guaranteed. It is so dependant on if anything is found and the specifics. But politicians have to pitch growth (I guess), and resources are an exciting low investment possibility for a government so long as approvals don’t get in the way. After all, industry hates uncertainty, exploration is already gambling so why also gamble with approvals. Politicians need to signal we are open for business to get interest and take the backlash later.

    Bring attention to concerns, ask the hard questions, get mitigation in legislation. Don’t believe a company that tells you they’ll do something in the approval stage when no one writes the regulation. Complacency and cost effectiveness will win out in a few years time.

  • Liberal Death and Liberal Resurrection

    General thoughts on a provincial and federal election.

    The Nova Scotia provincial election of November 2024 was boring. Which is probably good since all the exciting elections recently have been about someone losing the plot.  But Tim Houston has held it together, “A good man you might disagree with” to paraphrase John McCain. Houston was only one term in and had a deeply unpopular federal Liberal party holding the provincial Liberals back. My absence will have to excuse my unfamiliarity with Zach Churchill and if they were doomed from the start. Calling an early election after promising not to is a class move, but no one likes keeping promises when it’s hard.

    We were getting electoral reform at some point, right Trudeau?

    Conservatism Rising

    Economic issues have been eating at the general public for a couple years now. I’m still convinced the federal liberals lose the 2021 election to a conservative minority if they didn’t seize on several conservative premiers looking stupid with how they were handling ongoing COVID measures. Needless to say, everyone be pitching tax cuts in 2024-2025. But even pitching more tax savings couldn’t save the NS Liberals. I don’t think what came next could have given them a win but it might have saved their party status.

    By Matthew McMullin – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=154461541

    Die Libs!

    The federal liberals were destined to a similar fate. But bizarrely didn’t seem able to boot Justin Trudeau to attempt to cut the bleeding. I was sure no one wanted to take the fall, until that fateful day.

    Et Tu, Chrystia?

    It’s likely impossible to know all the motivations involved, was this a mistake on Trudeau’s part, was he given bad advice, was Freeland waiting for an opportunity? But to cut to the chase Freeland stabbing Trudeau saved the Liberal party. (My Caesar metaphor breaks down a bit on that point, but Freeland held to the rule that you probably don’t want to hold the knife that stabs.) Mark Carney becomes the new leader and PM and gives to the inevitable election call.

    Milhouse Loses The Trump Card

    But before I give all credit to Carney, who generally seems like the boring centrist dad a lot of people crave right now, we can’t discount how effective Trump was at getting him elected and how ineffective Pierre Poilievre was at pivoting the message. To avoid a long digression, Trump is an idiot and the willingness of half the US population to follow him off a cliff is the swan song of this dying age. With that much of a following, behind that much stupid, it is a huge national and global risk. And with all those chips down we had Poilievre, who up to this point only had a real strength at messaging (the guy was an MP for 20 years with no bills)… fail to message. Except enough to scare NDP supporters to back a more centrist Liberal party.

    Centre-right leaning provincial conservatives didn’t seem to care if Poilievre lost which is notable. A glimpse perhaps that they see too much of Alberta’s Danielle Smith brand of “break the government to own the Libs” in him. That might be projection on my part, and a certain Elon Musk owns that crown now.

    The analysis that given a couple more weeks we likely would have seen the Conservative win seems possible given how close we got to a two party system in that election and the direction of the polls. NDP losing ground to a central banker who at least isn’t as bad as the other guy, and more populist economic messaging on the right. There’s a lot of data with none of it being easy to solve.

    What’s Next?

    Having lived in a province with only viable NDP and Conservative parties, do I think the NS Liberals are dead? It’s a more interesting “what if” had the federal Liberal party died this year, but now I would say no. Not unless the NDP tries to choke them out of the centre, and that risks alienating their core supporters. The Alberta NDP happened into a situation in which the Liberal party was nonviable, right when the right split itself in half. They emerged as the only surviving alternative. I expect a return to the status quo in NS so long as there are no breaks in the PC party. But Houston is leading a very boring party so far (let’s see where the Uranium fights go, I’m living the coal on the rocky mountains all over again).

    As for the federal government, I think their task is impossible. Especially for a minority government. But if they can swerve around the on-again, off-again maniacs to the south to give us a bit more independence, I’ll take what I can get.

    Alberta politics weren’t boring, but that’s not necessarily good. I’m more bored now in my native land, but still not inspired.