Saturday, October 12, 2013

Nova Scotia Election - Why did the NDP lose?

NS Liberal Leader Stephen McNeil
As TC suggested in his last pre-election post the Liberals did win big in the Nova Scotia election meaning that Liberal leader Stephen McNeil will soon take over as Premier of Nova Scotia.

There is an interesting analysis in the Halifax Chronicle Herald today that provides some clues as to why the election turned out the way it did. TC thinks that while such articles tend to focus on the 'clever' campaign strategies of the winners, the story of the election is less about how the Liberals won and more about how the NDP lost.

While the Dexter government crowed about its balanced budget, that accomplishment came at a considerable political cost including a "broken promise not to raise the HST", which Dexter hiked by two points. The budget also required austerity and spending cuts. As the article notes: "Program cuts take their toll on any government, and the teacher’s union spending tens of thousands of dollars on advertising to protest education budget trimming had an effect."

But the Dexter government also spent foolishly, especially on corporate giveaways, which might not in and of themselves been fatal, but looked especially bad in the context of austerity. One large giveaway was a $260 million forgivable loan to Irving industries but there were others. There is a comment below the main Chronicle Herald story worth quoting that illustrates the problem:
Raising the HST by 2% and breaking a promise really stunk, but for me as well as many others, I accepted it as Graham Steele explained that it was necessary to deal with the province's finances. But when the big handout to the Irving's came into being that reason for raising the HST suddenly hit home that they were using that added money for other reasons and not dealing with the finances, and went on a spending spree. Suddenly every single thing the NDP spent on gave the optics that they raised taxes to support their spending habits. They lost our trust. In the weeks leading up to the election call, we were deluged with spending promises. And despite reporting a "balanced budget" to make it appear that they were being conscientious financially, the public didn't believe them.
A good lesson for any government here, the electorate has a long memory when it comes to raising taxes and breaking promises. And it looks even worse when you start spending our money to further your agenda. Good decisions or bad decisions are part of the job, but you have to keep the public's trust first if you want them behind you in whatever you do.
The NDP's loss also stemmed from an unambitious program in 2009 that did not a include a signature
Darrell Dexter
equality-promoting commitment. In fact, it reads like a program that almost any party could run on: more jobs, reduce health care waiting times, fix rural roads etc.

Fundamentally, however, the NDP's loss had its origin in a bad economy over which they had little if any control. That can be seen in the data TC generated from a Statistics Canada CANSIM series on employment. In Nova Scotia employment has been stagnant since the Dexter NDP took office. The table I generated is dense with data (can't link directly to it) but here are the two key figures:

Total Employment in Nova Scotia June, 2009: 410,423
Total Employment in Nova Scotia June, 2013: 408,818

A provincial government in Nova Scotia can't do all that much to have an impact on employment levels in the context of a globalized economy and the biggest economic downturn since the thirties. In this context one can understand the desperation that led to corporate giveaways.

The impact of the global economy on the Nova Scotia will be just as important for the incoming Liberals whose fates will depend on external events every bit as much as those of Dexter's NDP.

TC noted that the central Liberal promise in this election is to reduce electricity rates by introducing competition for the private monopoly electrical utility Nova Scotia Power. What Sir Humphrey Appleby once said in an episode of Yes Prime Minister I think applies here: "Prime Minister, it is the most courageous policy that you have ever proposed."