Investing a royalty windfall
Premier Stephen McNeil and Finance Minister Karen Casey held an unusual press conference Thursday to pre-empt the provincial budget that Ms. Casey will table next week with a cornucopia of one-time investments.
They’re mostly in new broadband infrastructure and in health, oceans and IT research. Yet there are also funds for heat and shelter programs, primary health-care access, opioid countermeasures, primary health-care and employment assistance for people with autism spectrum disorder.
The reason for the prequel isn’t surprising. The province will show a huge offshore royalty windfall for the 2017-18 fiscal year that ends March 31. Mr. McNeil says the finances are healthy enough to let him to spend it on economic and community priorities — stuff that premiers’ news conferences are made of. He says the investments will drive growth, attract matching private and federal funds and meet compassionate needs in health and housing.
The windfall, estimated at $250 million, comes from winning an arbitration on how much producers could deduct from gas royalties for their pipeline costs. Eighteen years of royalties were recalculated and the added amount must be recognized in this year’s revenue. The responsible options were to use it to pay down debt, make one-time payments on priority matters or do both.
The government is picking door No. 2: keep the surplus where it was ($139 million in December’s update) and make one-time investments that will boost economic capacity and address some severe social needs. Is this a good choice? It depends on the quality of the investments.
Few would argue that we shouldn’t be preparing for an opioid scourge or that $18.2 million for primary-care access is wasted when 40,000 people are looking for a doctor or primary-care team. If anything, the public would give this the highest priority in making the province more attractive.
There is also a good record of provincial investments in health, oceans and IT research and innovation reaping matching funds and creating employment opportunities.
It’s the biggest bet — putting $120 million into an Internet Trust to improve broadband infrastructure and boost high-speed access — that’ll raise the most questions. Yes, slow or no broadband is a serious barrier to economic growth in rural Nova Scotia. Changing that is a legitimate priority. But we could have had some public examination first of the trust concept, of the $120-million budget and of the strategy adopted from a report, released only Thursday, from consultants Brightstar Canada. High speed is great for broadband, less attractive in scrutinizing public spending.