Peril, promise in P.E.I. estimates

There are both peril and promise in our 2020-21 financial estimates

With the silent enthusiasm of a deflating child’s balloon, the $173-million P.E.I. budget deficit exhales with barely a whimper.

Not even the opposing Liberals can maintain the focus of an attention-deficient public on the future costs of deficit management. The new shinny ‘bubble’ has diverted public opinion which traipse like lemmings to the sound of travelling pied pipers.

A little sunshine, heat stroke and a grasp toward a glimpse of normalcy, no matter how fleeting, has captivated our collective attention. An anxious business community wipes sweat from its brow in anticipation of seasonal salvation, while small beads of perspiration form across the foreheads of health planners.

This is the dichotomy of our economy. Balancing economic destruction with public safety. An impossible position for politicians and one to be judged unkindly regardless of the chosen fork. Opposition cannot lose in either scenario while policy makers can’t really win.

The undeniable truth, government will never again suspend the economy. Full-stop. In future, this will be debated and studied, if government ever should have intervened to the magnitude of its imposition.

Provincially, we have afforded government wartime powers to abruptly suspend liberties once again. And, it’s my opinion, these powers will be exercised. If wellarticulated and short in duration solely for the benefit of our collective public health, this action will be accepted. But social, economic, educational interference to the magnitude and degree of our last suppression is not an option.

I feel like the last sentry with time or interest to reflect on last week’s old news – the budget. Still absent comment from our famed economic recovery council, I see both peril and promise in our 2020-21 financial estimates.

The peril is obvious. As the current government would frequently decry when in opposition, ‘we are burdening and hamstringing the opportunities of future generations’. We now carry a $2.4-billion net debt. Maybe the lowest in the region, but a substantial obligation and inhibitor to our future growth.

The promise is more challenging to view through the opacity of public sentiment. Reopening the economy and welcoming seasonal visitors will serve to minimize the losses of our entrepreneurs and create much-needed employment for a CERB-expiring workforce. Listening to industry leaders should create more responsive solutions to paralyzed public policy and expedite ideas into action. But the public are suspicious, and inward observing.

Now is the time for bold thinking. Aspirational actions too often absent from the upper floors of our concrete West Kent high-rise.

Of the 44 per cent of federal government income dependency, not all can be depended upon into the future. We will get a shortterm boost in infrastructure investments, but health transfers will never serve our structural demands and equalization may be on perilous footing in a faltering economy.

Our 46 per cent of provincial-generated revenues (taxes) is optimistically forecasted – but even if we overshoot these estimates, it will not bring our spending to balance. With growing, but a small industrial footprint and provincial revenue limited to taxation and transportation, where can we secure new revenues?

I am unfamiliar with the provincial budgeting process, but I would hedge a bet that 99 per cent of the energy invested in its inception is directed to lobbying for more spending. Where business budgeting is driven from the top down, a concept foreign to public policy.

With a shift in mindset, the provincial approach could move from one of spending to one of service and topline generation. A ministerial directive to ‘find revenue’ in each department rather than ‘cut spending’ would be refreshing. One approach is transformative and inspiring, the other is offensive and paternalistically regressive. Revenue does not need to be in the default of taxation, but of creation; not burden but inspiration.

What drives the economy? Construction, housing, population, retail sales, business creation, exports and consumer confidence. We can institute a baby-bonus and grow our population, but it takes 20 years to make a 20-year-old. We can promote provincial residency, domestically, but this tact generally attracts retirees and we need 30-year-olds with families and early in their productive career. Contributors to our growth and by consequence tax base to afford our required services, elevating our economy through expansion.

Our financial need is not $173 million; its $500 million – annually. We need to repair our fiscal imbalance, invest in growth supports and apply surplus to our debt (while interest rates remain favorable). Immigration is the pillar to this solution, and not 1,000 people. We need a future focused target of 200,000 people contributing to our province, driving our growth.

Our budget process is archaic and outdated. We need to disrupt this process and drive innovation at government, through our economy. We presently lack capacity to achieve this. I don't see it coming from any quarters presently active in our province, but maybe this too deserves a dose of disruptive application.

Now is the time for bold thinking. Aspirational actions too often absent from the upper floors of our concrete West Kent high-rise.