The protests over last year’s revenue-generating methods - tax changes, the introduction of the levy - make it pretty clear that people aren’t willing to pay more for the services they are using, so this is the other side of the coin - reducing costs.
And it has to happen.
Wednesday, the province announced that it would be getting rid of 287 management positions. As a result, 197 people will lose their jobs (90 of the positions were already vacant).
The move will save somewhere between $20 million and $25 million, but not right away - the provincial government says it expects to have to come up with $15 million in payments in lieu of notice. The other shoe is, of course, yet to come: Wednesday’s announcement doesn’t include expected layoffs among unionized employees.
It may sound like a broken record to keep pointing this out, but we can’t continue to solve our problems by pushing debt into the future and onto our children.
Think of it this way: there are about 519,000 people in the province, according to the 2016 census. At the beginning of this budgetary year, the provincial government - even after increasing taxes and fees, with things like the two per cent hike in the HST - was forecasting a deficit of $1.8 billion.
That means pushing $3,468.20 apiece into the future - and since we’re not likely to be able to pay down that debt, even without new debt, you can start adding on interest.
The government’s last public borrowing was a $500-million bond, a deal that closed Dec. 7, 2016. The best interest rate the government could get? Get ready - it’s 3.7 per cent per year. Given that interest rate, by next year, that $3,468.20 per person will be an unpaid $3,596.52.
Still unpaid in the following year (the government still expects deficit spending then), the debt from this year would be $3,729.59. You see the problem - paying taxes that are only going to disappear as an ever-growing amount of interest is a mug’s game.
To quote Merle Travis from his 1946 coal mining song “Sixteen Tons,” we’re “another day older and deeper in debt.”
And keep in mind, even that 3.7 per cent interest rate isn’t the only way we’ll pay for borrowing; tucked away in the government’s accounts this year is $65.2 million that we’ll pay in management fees, underwriting commissions and discounts to the financial firms placing the province’s debt on the financial market.
It’s worth pointing out, as the government did repeatedly in announcing the layoffs, that this province has 94 government workers per 1,000 people - the national average is 67.
It can’t continue.
This is, perhaps, stating the obvious.
If you aren’t willing to pay more, you clearly have to expect less.
Welcome to the start, just the very start, of less.
— This editorial originally appeared in The Telegram