Allan Rankin- Thinking about it

Finance Minister Roach has been travelling throughout Prince Edward Island these past few weeks consulting Islanders on the upcoming provincial budget.

Mr Roach says government is working to balance the provincial budget for 2016-17 because it “demonstrates the fiscal responsibility and accountability that Islanders expect.”

In other words, Minister Roach is presuming Islanders will support the reductions in program spending required to eliminate the current projected provincial deficit of $32.9 million.

I somehow doubt that very much.

In spite of the Island’s precarious and chronic financial footing, we are not at all a fiscally conservative people, and with the exception of former Premier Catherine Callbeck’s successful deficit crusade in the 1990s, which led to her own political downfall, Island governments in recent times have been big spenders.

When I was a deputy minister running a government department, Premier Joe Ghiz welcomed me into his office one day with a call to action.

“Tell me how I can spend the people’s money today,” the Liberal premier asked as he sat back in his chair smoking a cigar.

It was a serious and genuine request, for Joe Ghiz was a social progressive who wanted to make life better for Islanders.

He wasn’t at all preoccupied with operating deficits.

His son had much the same philosophy, and there is no reason to believe our current premier, having re-built UPEI and left that institution with a sizeable debt, will adopt a much different approach to fiscal management.

And there is really no reason he should.

For while some Islanders may pretend they want a balanced provincial budget, and the Opposition jump up and down demanding one, the truth is our expectations for quality health care and educational services in particular, rule out a balancing of the books anytime soon.

It’s all a futile exercise in book keeping.

Premier MacLauchlan wants to grow the Island economy and I applaud his efforts to do so. But save for the discovery of a rare metal under the sandstone cliffs at North Cape, or the announcement of a new Tesla car assembly plant for Borden, our economic development outlook remains bleak.

Now it might be a different story if our political leaders were interested in making structural, fundamental changes to our economy, but they are not.

When individual citizens become financially insolvent they declare bankruptcy. Private companies go into receivership. Municipal corporations either have their indebtedness assumed by the province or they are dissolved.

But provinces are governing jurisdictions under the Canadian Constitution and as sub-national bodies are protected from financial Armageddon by the federal government.

Because Prince Edward Island is a province, to put it bluntly, we are ‘too small to fail.’

In my opinion we should stop all of this wringing of hands about deficits and debt.

When Saskatchewan fell into financial ruin during the Great Depression, the federal government stepped in and total relief payments amounted to almost twice the provincial budget in the years between 1937 and 1939.

In fact, you could argue that the federally funded Comprehensive Development Plan of the 1970s in Prince Edward Island was a similar kind of financial rescue package, transforming social and economic institutions as it did and pulling us up as a society.

The MacLauchlan government doesn’t seem to be interested in pursuing any kind of multi-sector development agreement with Ottawa.

And so we will stumble along, from one year to the next, taking federal infrastructure and other one-off funding when we can get it, tediously managing and trying to keep costs down while increasing revenues.

Business groups will harp in the media about the Island’s deteriorating fiscal position and the Conservative Opposition will spend weeks in the Legislature grilling the government on its projected spending.

We should instead take comfort in our gift of jurisdiction and let her rip.

Government should hire more teachers and nurses, take children and families out of poverty, build our industries, invest in rural communities and as Joe Ghiz liked to say, spend the people’s money.

Islanders don’t really care about balancing the provincial budget.

Regardless what Minister Roach might tell you, it’s not a priority, nor is it essential to our future as a province.

Parva sub ingenti.

These words are emblazoned on the Great Seal of Prince Edward Island.

From a poem by the Latin poet Virgil, they mean “the small under the protection of the great.”

It’s our provincial motto and in my view it’s our priceless gift of jurisdiction.

For when Prince Edward Island slips below the financial waterline, Ottawa will be there to protect and save us.

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(1) comment

de udder guy

Spoken like a true lifelong Liberal, well versed in the fine art of spending other peoples money. There will be a financial reckoning at some point and those who giggled their way to spending it all will have left the mess for someone else to clean up. Which is not a specific Liberal trait but one shared by politicians of all stripes, spend now, look out for me and mine and then run to the hills when the time is right. With my pension.

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