This morning, Contrarian observed that Darrell Dexter had to have known he could not keep the three main promises of his June campaign: no deficit, no tax increases, and no program cuts.
Sure enough, the premier jettisoned all three promises at a news conference this morning, and lamely tried to ascribe his about face to new information:
But there are economic realities that we are faced with today that we did not know six* months ago.
We have information now that no one had six months ago.
Do tell. What new information is that?
The Economic Advisory Panel report offers little that wasn’t known long before the May election call. The very first sentence of the Finance Department’s March, 2009, fiscal overview said, “the 2009-2010 budget will require some very difficult decisions [because] costs continue to rise while revenues remain flat.”
A chart from that review clearly shows the falling revenue:
From the same overview, here’s a chart showing rising expenses:
The plunge in offshore revenues was known as far back as the 2007 fiscal overview, which warned at page 11:
In recent years government has seen revenues increase in a number of areas, most notably in categories related to the production of offshore natural gas. However, some of these upward trend lines are flattening out or even declining.
The 2009 Renewed Energy Strategy, released in January, was equally candid about the pending drop in natural gas revenues at page eight:
Production of natural gas, a cleaner fuel than coal, has made a major contribution to our economy. Revenues from the Sable Offshore Energy Project account for nearly one-tenth of the provincial budget this year and a significant share of our GDP. However, production from Sable has peaked (or will peak soon), and royalties from that project will decline. Deep Panuke is the only other Nova Scotia offshore project moving into production, and its total gas and royalties are expected to be much smaller than Sable. If we are to retain the revenues, jobs, and business opportunities we’ve enjoyed from Sable, we need to attract new, large-scale offshore developments.
The Premier is famous in NDP circles as a numbers geek who pores over polling data. His then-Finance Critic / now-Finance Minister is a voracious reader of and commenter on government financial documents. It is not credible that any of this “new information” was new to them.
It may be new to voters who relied on Dexter’s and Steele’s campaign rhetoric for their understanding of what to expect in the way of deficits, tax hikes, and program cuts.
* Five months, but who’s counting.