N.S. premier hints at wage restraint among public-sector workers to tackle deficit

Nova Scotia Premier Stephen McNeil says his government will waste no time trying to address the province's massive deficit, and he expects public sector unions to be part of the process.

On Wednesday, Finance Minister Karen Casey released a fiscal update that showed the effects of COVID-19 have placed the province on track for a deficit of $852.9 million. Tackling that number would not be an easy or fast process, Casey said.

On Thursday, the premier told reporters that effort would begin this year by looking at steps that could generate economic activity while also looking at possible savings.

"We're going to continue to work at ensuring that we, again, are delivering programs that we've committed to, but at the same time trying to control those costs of government," he said.

Unions must be part of the process

One of the biggest costs to running government is people, and with contract negotiations ongoing or looming for several public sector unions, the premier warned that they would be expected to play a role in reducing the deficit.

"It can't just be the private sector who will be the ones to put us back in a good fiscal position," he said.

"People need to understand that for four months there were many people in this province who lost their entire paycheque while others were continuing to be paid, and I think we need to be mindful of that."

On Wednesday, Casey said the government was not considering layoffs as part of efforts to deal with the deficit. But on Thursday, McNeil suggested unions would play a role in deciding the approach to be used.

"If the issue becomes that labour wants to continue to fight for more and more that the province does not have the ability to pay, then obviously that would mean there would have to be fewer people," he said.

"They're going to have to make that decision and I look forward to continuing to work with them."

The premier said his government has "demonstrated over the last number of years that we've been fair when it comes to the collective agreement process." Several unions are now suing McNeil's government on account of contracts imposed on them in recent years.

Ways to increase revenue

Labour negotiations aside, the government must also find ways to kick-start revenues, which are down $532 million since COVID-19 roared into the province in March. McNeil said key tasks will include finding ways to increase exports and immigration. It's also why he wants to see more travel restrictions in the province lifted.

Right now, anyone coming here from outside the Atlantic bubble must self-isolate for 14 days upon arrival. McNeil has made no secret of the fact he'd like to see that requirement lifted sooner than later for people coming here from the rest of the country.

"We need to get back to moving our economy," he said, noting that it would help tourism, but also include business travellers.

"We have to get to the point where we're going to be living with COVID and we can't continue to lock ourselves down. That's why it's critical that we continue to practise the public health protocols."

Premier's approach is 'mired in pre-COVID fiscal policy,' says NDP leader

NDP Leader Gary Burrill said the premier's thinking "is really mired in pre-COVID fiscal policy."

Burrill said the core problem in the economy right now relates to revenue. For him, the question becomes what stimulus efforts the government is prepared to make to raise revenues.

"This is not a matter of how can we, as a government, suck our wind in, how can we diminish ourselves and reduce what we offer to the people," he told reporters.

"There is no credible economist in the Western world who thinks that that is the road to recovery."

MORE TOP STORIES