Liberals stunt to inflate deficit will hurt programs and services Nova Scotians count on
December 18, 2013
NDP Leader Maureen MacDonald is calling the Liberal plan to tack over $300 million in unfunded pension liability on the current budget a risky stunt that places programs and services Nova Scotians count on at risk.
MacDonald said when she was the Minister of Finance the department and the Auditor General disagreed on how to address the unfunded liability in the public service pension plan. As a result the department solicited legal advice and determined the best course of action would be to amortize the liability over a period of 11 years.
MacDonald is calling on Finance Minister Diana Whalen to release all legal opinions the Department of Finance received regarding the unfunded pension liability, when she provides her financial update tomorrow.
“The AG and the Department of Finance squabbled over this, but ultimately it was decided a plan needed to be developed to reduce the burden on taxpayers,” said MacDonald. “In the interest of transparency the Liberals need to release all legal opinions the department received on this matter. Nova Scotians deserve to know if the Liberals are tossing the practical approach out the window to inflate a budget deficit for political purposes.”
Placing the balance on a single year’s operating budget is an unusual move as pension liabilities are typically amortized. A 2009 provincial review into pension plans recommended liabilities be amortized over a 10-year period. In 1993 a similar $300 million payment to the Nova Scotia teacher’s pension was amortized over 30 years.
MacDonald said the Liberals are obligated to find a solution that will not add millions to the provincial debt.
“In January 2012 Jacques Lapointe said adding to the provincial debt was unethical. I think we can all agree that the best solution is one that won’t add to our provincial debt. In this case that solution is to amortize the liability. Unfortunately the Liberals are more concerned with accumulating political capital than managing provincial capital.”
“Ultimately, a few months ago I was prepared to make a choice based on legal advice, departmental advice, precedence and common sense,” added MacDonald. “The Liberal’s have taken the opposite approach.”