Economist Says N.S. Has Bright Future Despite $853-Million Deficit
HALIFAX – Ian McAllister has spent nearly 60 years immersed in the world of economics. He advised Newfoundland Premier Joey Smallwood back in the 1960s and became a professor at Dalhousie University in 1972. One may think experienced economists like him would have hit the panic button last week when Nova Scotia announced its $853-million deficit. But McAllister has an optimistic outlook on the economic opportunities of Nova Scotia and the Atlantic region.
“I think one of the real benefits that can come out of this virus experience is the much more serious discussion about the kind of region that people want to live in,” said McAllister.
“Nova Scotia is in a very privileged position in terms of the opportunities…it’s one of the best parts of the world.”
McAllister notes that Nova Scotia, and the Maritimes, is in a perfect position on the globe for importing and exporting, has beautiful scenery, and plenty of natural resources. He blames lack of political leadership, in part, for why this region hasn’t seen more economic prosperity over the years. What is desperately needed now, he argues, is a multi-year economic plan, with Atlantic provinces working together.
“We need a very solid 10-year development plan for Atlantic Canada,” stated McAllister.
“It hasn’t had a coherent five or 10-year development plan for Atlantic Canada for 25 years-plus. Why?”
The veteran economist believes Nova Scotia and the Maritimes should be exploiting its proximity to New England for economic gain.
“We don’t have nearly as much in the way of connecting…with Maine and other Northeastern U.S. states,” said McAllister.
“Isn’t it incredible that we’re sitting in this wonderful province and we don’t even have a functioning ferry system between Nova Scotia and the Northeast of the United States?”
Much of McAllister’s suggestions are lofty long-term solutions. But what about the immediate problem of the $853-million hole? When asked, the Dalhousie professor immediately said the federal government should step in to help.
“The federal government can handle it and there’s no darn reason why they can’t,” said McAllister. “It’s not something you want to go on forever and ever. But I don’t think Nova Scotia has been aggressive or coherent enough in its relationships with the federal government.”
According to the Canadian Taxpayers Federation, the federal government has more than $835-billion in debt, and many people fear Covid-19 may push that number past a trillion. This year alone the federal government projects a $343-billion deficit. This may seem like a national debt crisis to some, but McAllister quickly scoffed at that notion.
“I don’t think they’re anything like (being close to a debt limit) …if you look at the essential assets, in broad terms of what the federal government can access…Canada is in a privileged position.”
McAllister also says it’s time to review the tax structure across the country. He believes the people who make enormous sums of money need to start paying more.
“If you look at Canada as a whole, as well as in Nova Scotia, there’s a small percentage of the very high income…who are paying relatively small tax amounts compared to what a more egalitarian society would require them to pay,” he said.
The Dalhousie economist is also against large corporations receiving major tax breaks in Atlantic Canada. He had advised the federal government against them before in a previous career.
“If you want to go into the region, go there. But if you want to have subsidies coming in on the large scale, why don’t you look somewhere else,” said McAllister, bluntly.
“I think we’ve been too sucked in by apparent benefits of some of these large corporations.”
McAllister even got so bold as to suggest certain high-earning employees in both the public and private sectors should willingly take pay-cuts form the greater good. He admits, however, that this may be a tough sell.
“I’d like to see that money going to people who are on the streets and not on the employed side. I see a lot of inequities in this province,” he said.
“I spoke to one of the union people recently about it and they said no way would they make that proposal.”
As a professor of nearly 50 years, McAllister sees a lot of economic and entrepreneurial hope with the younger generations. He has seen many recent graduate students produce creative ideas that can be used in Nova Scotia. The biggest challenge, however, is convincing the youth to remain in the province.
“I tell you; I’m impressed by the enthusiasm and the energy and the great ideas coming from them,” McAllister said, with much enthusiasm himself. “If the officials don’t wake up and do more, I think we’re going to have much more leadership coming from the very young generation.”
“What concerns me is we are not doing nearly enough to encourage and enable these young people to stay in this region. For every reference letter that I write for graduate students from Dalhousie for jobs, I would say that 80 percent of those have been for those students to go outside this region.”