Whether or not the health care redevelopment plans will successfully improve health care in Cape Breton isn't what I'd like to discuss today. Instead, my concern focuses on the risk that healthcare investments may severely limit other desperately-needed intervention. Consider this statement from MLA Derek Mombourquette:
"Not only will this transform the way health care is delivered, but it will also have a significant impact on the local economy by creating real employment opportunities here at home"
With a $250 Million investment in health care and perhaps another $100 Million investment in the NSCC Marconi campus move, will Liberal MLAs Mombourquette and MacLellan not only secure their reelection bids but also convince CBRM voters that they've done enough? Will they alter the economic conditions that continue to drive people away from the island in a meaningful way?
Over the next 10 years, these projects will be ongoing. No doubt there will be employment opportunities and some economic spinoff that results. But the bigger question is: will the economic impact be enough to turn our economy around? If the answer is "no", then clearly the next question to our MLAs is:
What else are you going to be doing to change our economic situation throughout the next 10 years?
I expect at this point a common objection from many readers will be that I'm foolishly dismissing an investment in the ballpark of $350 Million, some of which is already underway, and not giving it a chance.
For those inclined to agree, I'll concede that it would certainly be reasonable to challenge me for doing so, if it were true. But, not so fast. The entire motivation for writing today is because I'm quite certain that a precedent already exists to tell us what to expect. Thus, we can have a discussion about what might happen, based on what already has happened with a similarly sized investment and timeframe.
I draw your attention to a table of unemployment stats for Cape Breton shared by the Cape Breton Spectator. Now, if you take a look, you'll notice a few things that jump out. For one, in the 1990s, the unemployment data looked much worse. Without scrutinizing the data further, we'll also notice from 2006 to 2008, the unemployment rate still wasn't good, but was at least moving in the right direction during those few years. We'll ignore, for now, the effect people leaving has on reducing the demand for scarce job opportunities. When people leave the regional job market, it directly affects the unemployment rate, of course.
Determining what led to those changes from 2006 to 2008 definitely requires complex analysis to do so with a high degree of certainty. I'll leave that complexity to the qualified academics.
However, a reasonable hypothesis is that some of the improvement in employment rate likely related to the $400 Million, 10-year Sydney tar ponds cleanup announced in 2004 and running for most of the decade that followed.
Using the tar ponds cleanup project (and investment) as a precedent, it's fairly clear that hundreds of millions of dollars in investment in large projects inject money into the local economy and create some additional employment opportunities while it's underway. It's not transformative. It doesn't "turn the ship around". But it does move the needle.
But we must acknowledge that even a $400 Million project had only a relatively small impact on employment rates by the time of completion, and it did not stop our regional outmigration from continuing. The trend of our population consistently declining is the best data to support Senator Dan Christmas's assertion that our island is "dying."
As such, can we really expect $350 Million in investment projects over the next 10 years to have a more significant impact than the $400 Million in investments during a previous 10-year span of time that ended in 2013?
Though I anticipate the typical apples to oranges objection will be raised now, I believe that a reasonable expectation is that it would have a similar impact on creating jobs and reducing our employment rate.
The concern I have is that a short-term improvement in the unemployment rate is nowhere near what is required to turn around an economy that is among the poorest performing in the country, with a full gamut of economic indicators stacked against it, whilst steadily losing its population year after year.
By comparison to an alternative strategy over a decade, $400 Million is $40 Million per year. If that funding was directed to the CBRM to reduce unfair housing and commercial taxation, it would inject new money into the economy (freeing up disposable income), make housing and homeownership more affordable, and encouraging more commercial investment to grow our tax base. You can see the impact here with this CBRM Equalization Calculator. It'll give you an idea of how more equalization funding transferred to the CBRM could have a direct impact on your personal finances.
That amount of increased resources would allow us to remove the damaging tax cap effects without hurting seniors or other homeowners that have the cap in place for many years.
There will be few objections to the tax cap removal if it doesn't cause people to have to pay more when it comes off. But, assuming nobody had to pay more, there will be immediate positive effects on housing construction and growth of the tax base when it does. Many people who want to build or renovate aren't doing so because of our absurd and unaffordable residential tax rates.
While the CBRM budget is severely constrained, growing its tax base enough to raise just an additional $10-$15 Million in revenue a year would require thousands of new homes to be built. On the present economic path, that's not happening. However, even with a $400 Million project announced every 10 years, it might take 50 to 150 years. In other words, most of us would be dead or advanced into our senior years before it happened. It's also presumptuous that our future local economy would be able to persist throughout the entire duration.
We've suffered a destructively transformative change in the Cape Breton economy, with our population hemorrhaging since the 1960s. If we turned it around at the same rate we've declined, we'd be looking at 60 years for the restoration. The economic impact of people who have left and taken whatever earning potential and income with them eclipses $400 million every year.
While we might improve healthcare or concentrate students in downtown Sydney to spend money on food and drinks with these projects (health care redevelopment, and the Marconi move), I believe the precedent of the tar ponds cleanup establishes that they won't result in economically transformative impact. It's more likely, they'll simply move the needle in a positive direction.
What happens if our two MLAs (or future MLAs) believe that they've done enough, and continue to ignore the obvious: we need more equalization transfer flowing into the CBRM to even the economic playing field with our provincial capital and growth centre, and to thereby deter our people from leaving Cape Breton. If not Equalization, then everyone needs to get back to the war room and devise a strategy that qualifies as transformative. We haven't had one presented to us yet.
Your takeaway should not be to question whether the health care projects or the Marconi move are the right ideas. That's a separate discussion. Instead, the key takeaway is that even with these projects, we still don't have an economic plan that qualifies as transformative. The current government is resisting even the thought of doubling the provincial equalization transfer line item on their books. It's completely affordable, can be done with the stroke of a pen at any time, will have an immediate economic impact, but just isn't being done "for home." Why not?
NOTE: The views expressed above are my own and do not represent lokol (goCapeBreton.com). Read more
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