Nova Scotia needs to fight for growth
From "managed decline" to "problems of growth" and back again
There is a snap election in Nova Scotia. The PC Premier, Tim Houston, would like to make the election about PM Justin Trudeau. Or about cutting taxes for affordability.
Those are fine political strategies, but I think they miss the moment that the province is in. For a short history of Nova Scotia’s role in the federation, you can look at it’s share of the population. And outside of WW2, Nova Scotia has spent 150 years becoming less and less relevant on the national stage.
With only 3% of the population, and a high reliance on federal transfers, we are at high risk of having political irrelevancy worsen our economic malaise.
Even more importantly, much of the past two decades have seen outright declines in population, not just just a relative decline. Population declines risk death spirals - as the remaining workers are unable to sustain the infrastructure and healthcare demands and taxes rise, making it harder to keep the remaining population.
That’s not new, ‘managed decline’ has been a buzzword for years (see Ivany report, which names “decline” 4x as often as “housing”). But then, to quote J.R.R. Tolkien, “hope came from the most unlikely places”, a surge of population growth.
Starting in 2015, population growth began to accelerate, and accelerate. Even before COVID, population growth trends had basically caught up to the national average. We are now living in the longest period of growth outperformance (outside of WW2) for Nova Scotia ever (it isn’t a high bar..).
It’s worth noting that Premier Houston’s PCs have only governed in this context of abnormal growth (with all the benefits and problems they bring). It also strikes me that Premier Houston is choosing to play “small ball” instead of setting the agenda for how the province can keep the growth going.
That’s a red flag. Because keeping the growth going is about to get ridiculously hard. Federal immigration policy changes, first cutting international students and temporary workers, and now permanent residents as well, have set the country on track for population decline. The province has already seen growth plunge drop from ~3% to under 2%, and they measures have hardly started to bite.
With Nova Scotia’s 150 year history of underperforming the country by ~1%, you’d expect that slight national decline to translate in -1% provincial growth for the next two years. Provincial coffers, healthcare funding and staffing, and the economy broadly will suffer greatly if it comes to pass.
While a return to decline seems dark and dour - there is a difference this time around. The path to growth is clear - more homes. Across the country cities are stuck at staggeringly low vacancy rates of ~1% or less (and a shortage measured in the millions of units). Halifax included. The simplest possible plan to keep Nova Scotia growing has to include building as many homes as possible.
More on that later - but I’ll be looking for plans to build many more homes in this election.
