Government, Business, and Hit and Run Politics

When the Hamm government was elected in 1999, one of the 243 promises in their platform was to get Nova Scotia out of the liquor retailing business. That platform was one that I doubt they ever thought they would need to deliver upon, but as things worked out, they were elected with a majority in 1999 and had to start doing the things they had promised. The liquor promise wasn’t a top priority, but by the year 2000 it had been decided to undertake a consultation on what to do regarding the NSLC, and Price Waterhouse Coopers was hired to undertake an analysis of the financial implications of 6 different retail options, from a full Alberta-style privatization to an IPO to improvements on the existing model and variations in between.

At the time I was working at the Priorities and Planning Secretariat and was assigned as the staffer on the file. Michele McKenzie, the Deputy Minister of Tourism who worked for Tourism Minister Rodney MacDonald, also the Minister responsible for the NSLC, led the process for government, and I ended up working closely with her. The consultation was interesting because there was little consensus among the public on anything. Some wanted the NSLC to disappear in favor of an Alberta-style private system, while others thought NSLC was just fine as it was except, perhaps, that even further restrictions on sale were needed. The majority were somewhere in the middle, saying that certainly some changes were necessary at NSLC, but perhaps not something as extreme as an outright selling-off. PWC’s financial analysis concluded that over time the “Alberta model” would bring the greatest return to the province, but that a revitalized NSLC with some agency stores could return about the same amount each year if done right. Given that the government had just gone through a fairly traumatic period in dealing with the unions on a number of attempts at service delivery reform, the ability to avoid that on the liquor file was welcomed, and the direction to reinvent the NSLC as a Crown corporation free of government interference was agreed upon.

In July of 2001 amendments to the Liquor Control Act were proclaimed making the NSLC a Crown corp, and an interim Board of Directors made up of government officials was appointed until a slate of outside Directors could be found. Michele was appointed Chair and I was chosen as one of the interim Directors, while still continuing to work as the government staffer on the file. The NSLC we walked into was a very odd organization, one which few in government knew much about. The NSLC had not been very open to government over the years, and aside from the regular transfer of profits few in government knew much about what went on there. We learned that many of the management staff had become accustomed to being told what to do by previous governments on things like store locations and property purchases, and we discovered that it was just a few years previous that they had finally gotten away from politicians telling them whom to hire. They had been forced to starve the organization of investment in facilities, technology and people in order to give the government the annual increases in revenue it demanded. Without proper management tools at their disposal to help the business perform better, the primary way they met those demands was with annual price increases. To say management was dispirited would be an understatement. After being told time after time that they couldn’t do things, they had, in some ways, given up even trying. Many of the rank and file staff saw themselves as government employees, with the mindset that entailed. Others realized that they had to provide customer service, but they often received mixed messages from above when they tried to do that. It was a very discouraging environment, especially for a retailer. It was, in short, a mess.

When the outside Directors were appointed in December of 2001, they began trying to change things, bringing in a new CEO and directing him to bring in new executive management. Over time, a new group of Vice-Presidents and Directors, most from the private sector, were brought in and began to change things. One of the biggest challenges was the need to build a culture of customer service among the staff. The idea that store staff could recommend products, ask customers what they were looking for, and make suggestions that would result in customers buying something other than what they came in looking for, was quite foreign to some at the beginning. But achieving that was absolutely necessary if the NSLC was to move beyond being order-takers and become a true retailer that drew people in and offered them an interesting experience. Around this time the first strategic plan was rolled out, with the theme of changing the NSLC from a place where you went just to buy something and leave, to instead become a place to shop, browse and linger.

By this time I had moved to the NSLC at the request of the Board and was working as their Corporate Secretary, trying to bridge both the brave new world of private sector management thinking while keeping the government either satisfied, or at times, at bay. Unfortunately the succession of Ministers over the years seldom seemed to fully understand the concept of a Crown corporation and the role of the Board, at times issuing directives directly to the CEO on various issues, leaving the Board wondering why they were even there. The problem is, of course, that when the CEO gets a call from the Minister giving an order, it is very difficult to say “no”. One can try to finesse the answer and immediately contact the Board Chair, who is the person the Minister is supposed to be dealing with, but the result is likely to be the same. Board members never were so upset by this to resign during my tenure there, although there were a few times when issues arose regarding orders from Ministers when some probably should have.

Beginning in 2004, the NSLC held management conferences with their store managers and Head Office managers. They were primarily store-focused given that store managers were the majority of attendees, but tried to offer something for anyone in attendance. With all the changes that the NSLC went through, there was a lot to talk about, from sharing feedback about store designs, new technology systems like SAP that were being implemented, interaction with the marketing and merchandising staff from Head Office, managing staff performance, and most of all, the idea of customer service. This was all new to the staff, but the NSLC wanted to build a customer service culture, and there were all sorts of things introduced at these conferences to support that. After a period of adjustment, most of the store staff began to buy into the concept. If you remember shopping at the NSLC in the old days, clearly there is a huge difference now. Customers would comment on it to us all the time. That ongoing effort to change the culture is the reason why.

The conferences didn’t happen in the same way every year. Some years there wasn’t one at all. Sometimes they were done in a roadshow format, where the executives and some presenters traveled to 4 or 5 locations around the province to meet with that region’s managers for a day. But there were several conferences of the kind that was supposed to happen this year, where everybody met in a central location for a couple of days. In addition to what was presented in the workshop sessions, these had the advantage of everybody meeting each other, sometimes for the first time. There is an advantage to sitting down next to the person you deal with on payroll or logistics issues by email or phone and getting to know them a little, or being able to talk to a V-P who you normally would not be dealing with and letting them know how you feel about something. Cultivating those kind of relationships is really valuable in an organization the size of the NSLC.

The other thing that happened in that style of conference was the ability to hear and ask questions of the CEO. Since the arrival of Bret Mitchell in 2006 this was something he made sure to do every time. He made a real effort to interact with the store managers, who otherwise wouldn’t get to see him very often, and to let them know the kind of organization he wanted the NSLC to be. That isn’t an easy thing to do sometimes, especially when you’re dealing with a well-established culture within a largely unionized workforce. But he always tried to get his points across to them, and made a sincere attempt to answer their questions honestly in a Q&A session he always held to wrap up the sessions. This wasn’t easy for some of the store managers to get used to, as many were used to almost a military style command-and-control, speak-only-when-spoken-to environment. I suspect that kind of free and open access to the CEO is pretty rare in a lot of retail operations, but Bret really tried to make it work, to his credit.

The other thing that Bret did was establish recognition for superior performance. A Store of the Year award was created, one for each region along with one overall winner for the whole province, based upon a long list of performance metrics. There were also individual award winners, chosen by Bret himself based upon nominations submitted by employee peers along with a written justification provided by the nominator as to why the person deserved it. These became very prized and prestigious within the organization, and the people who won them were certainly deserving, having gone above and beyond to help the NSLC succeed. The idea of celebrating success was new to the organization, and it made a difference in the mindset of people working there. It was very different from the traditional government employee mindset. Again, this was all part of the cultural change that we were trying to achieve, and it was working.

After having a few of these conferences in Halifax, there was a desire to move them around the province. Part of that was due to all the distractions in downtown Halifax, which meant that some people from out of town were tempted to wander off and not take part in all the scheduled activities. It was a lot easier to keep people in the fold when you were in a more controlled environment. There was also a desire to move them around because the NSLC was, after all, a province-wide organization. So in 2011 there was a conference in Baddeck, and in 2013 one in Digby. Those offered some logistical challenges, so buses were chartered to bring people in from around the province at the least cost possible. By this time the second strategic plan had been introduced, talking about taking things to the next level by becoming more customer focused by using data analysis to understand customer needs even better. The introduction of Air Miles was just one example of how this was being implemented, and managers needed to be able to understand what it meant to them.

You might say why not pick a more central location, which is a fair question. The problem was finding a spot that had both the conference facilities and the guest rooms required. I gather that typically you need about 150 hotel rooms in one location for this. For whatever reason, places like Truro couldn’t accommodate us at the times we wanted. Given the type of conference it was, with lots of interaction, any sort of video-conferencing simply wasn’t feasible. It was something that had to be done in person. For a lot of people, especially those coming from smaller communities, it was a highlight. Yes, parts of it were fun, but it also built a real sense of pride and loyalty to the organization.

The last conference in Digby cost $140,000 apparently, and the one that was scheduled this year was going to be about the same. I remember that we had discussed it over a year ago when I was still working there, so it had been in the works for a while. The $140,000 wouldn’t include all the internal resources that would have gone into planning and organizing this over the last several months, where a few people would have been working to line up presenters, organize accommodations, work with the host venue, get registration organized, prepare agendas and presentation materials, and get people’s preferences for roommates, meal choices and the like taken care of. Sadly, all of this significant work is now out the window given that the event scheduled for a few weeks from now was cancelled by the Minister after a sideswipe by the PC Party in the midst of the embattled government’s attempts to defend their budget.

Take a step back and look at this from a business point of view. The NSLC is a company that employs about 1500 people working out of over 100 locations. It generates over $600,000,000 in sales revenue every year, and returns about $228,000,000 to the province in profits. Compared to that, the $140,000 cost is insignificant. Compared to the provincial budget of nearly $10 billion, it is really, really, really insignificant. Now, if it was wasteful as some have suggested, then the amount shouldn’t matter – it should go. But I can attest that it wasn’t wasteful given what these sessions helped achieve. I don’t care if someone thinks that nobody should have been offered a scallop when it was held in Digby, or that there shouldn’t have been an evening where people were entertained after Bret presented the awards to that year’s winners during a dinner, in order to both celebrate success and keep folks occupied for a few hours rather than going back to their rooms and doing who-knows-what. I have no problem arguing that it is a cost of doing business in an organization like this. The $140,000 cost is the same as hiring a senior administrator in a government department, university or health authority. And nobody would have a clue if they added one, or 100, of those this year across the system. It would just happen and nobody would be the wiser. Who knows, maybe it has.

This sort of thing is, in fact, exactly why the NSLC became a Crown corporation in 2001, to avoid having politicians make hit-and-run attacks like this to which the government feels compelled to respond. The correct answer for the government to respond with should have been something along the lines of how the business plan includes a bottom-line increase this year, that they always ensure due economy in their operations, and that any questions should really be addressed to the Board of the NSLC. Some would say that the $140,000 should instead be used for health care or some other good cause. That is exactly the kind of thinking that led to the old NSLC not being able to invest in their facilities and people, and which kept them from being able to achieve the results the new NSLC has turned in over the last decade. The old saying “you have to spend money to make money” is something most people in business would understand and agree with, but seems to be foreign to those in the political arena. The focus on cutting costs in government is necessary. But NSLC is not like a government department. It does not simply generate costs like a government department. It is a business, trying to satisfy consumer wants and needs in order to generate revenue. You have to spend to do that. The secret is spending wisely. In my opinion, conferences like these – not an extravagant party, as some have tried to characterize it – are a necessary thing for a successful business.

Last week’s broadside by the PC Party about the conference wasn’t the first time this sort of thing has happened. You might remember 2 years ago, Jamie Baillie made some noise in the press questioning why NSLC’s expenses had gone up by what he claimed was over $100 million over the previous 10 years while the volume of liquor sold had only increased by a smaller percentage. While that is a fairly foolish way to measure things in a retail organization – your expenses are going to go up over a 10-year period even if you don’t sell one more drop of product, simply because of inflation – more importantly, it ignores where the NSLC started from and where it is now in terms of facilities, product assortment, technology, and people. It was a broken organization before, and now it is not. It is that simple, and he likely knew that given his financial background. But hit-and-run attacks by politicians always get them some headlines, and that is really all they are designed to do. If the government reacts without thinking and makes a bad decision, so much the better from their perspective. Perverse, but sadly true.

If you look at the first 10 years the NSLC was a Crown corporation you can see what I’m talking about in terms of spending money to make money. Over that period, overall sales went up by $197 million. Volume of liquid sold increased by about 100,000 litres or about 13%, so more product was sold. Gross profit increased by $120 million, and more significantly, the margin on that product went from 49.5% to 54% thanks to better management – things like better purchasing, better marketing, better selling skills, and better inventory management. While expenses went up due to investing in the business, bottom-line profits after accounting for all those expenses increased by over $62 million annually. That is money that goes straight back to the government to spend on all those good causes every single year. That’s a pretty good return on investment. If you could, you would do that every day of the week. It is simply a money machine.

Working in the capacity I did at the NSLC you sometimes got the impression that everyone hated the organization based upon what you saw in the press. The customer satisfaction data told us otherwise – they were consistently some pretty impressive numbers after the changes that the organization made had been in place for a while – but that didn’t stop the politicians and press from trying to convince people otherwise. Liquor retailing is something most people seem to have an opinion on, and they apparently love to talk about it.  If you look at the comments in the online versions of the coverage of this in the Herald and CBC sites, you see a shocking degree of misinformation among those sharing their wisdom. Many used the $140,000 cost as a jumping-off point to say the whole organization should be sold or dismantled. Talk about throwing the baby out with the bathwater (privatization is a very complex question that goes well beyond this discussion, but suffice it to say that it is not a slam dunk by any means). Some contended it wasn’t actually a business at all, that there was no need for strategy or management, because the product magically sold itself. Now, I have yet to have a product walk up to me and tell me to buy it, but apparently such things exist. There were several saying that the NSLC “got caught” doing something it shouldn’t have been doing. Ridiculous, as this was hardly a secret. They had done it for years, Ministers had always been briefed in advance, end of story. There were many along the lines of “I can’t get this so why should they?”, the all-too-typical attitude of many, and “they all make too much and get bonuses too!” (nobody at NSLC gets bonuses, and haven’t for years). And then there was the ever-popular “Booze is too expensive and this is why”, which fails to recognize that prices all across Canada are generally comparable within a narrow range, and that the cost of this is virtually nil on a $600 million sales line. It’s really quite sad overall.

I can guess that the decision to cancel the conference led to a very bad day at the NSLC last Friday. Not because it was an extravagant party that was kiboshed, and not because anyone got caught doing something that they shouldn’t have. The costs associated with this would have been included in the NSLC’s business plan, which was included in the provincial budget and which would have been already been approved by their Minister. It would not have been a line item because that is not how NSLC budgets (or those of any Crown corp) get submitted. They are supposed to be free to manage the details of what they submit within a framework of management responsibility and policy. There is no policy of which I am aware that does not allow conferences involving employees of the broader public sector (NSLC employees are no longer civil servants). One wonders if employees of health authorities, school boards and universities will also now be prohibited from attending conferences. Nor would they have known anything in advance about the cuts to other areas of government that were announced in the provincial budget. In the midst of the barrage of criticism about the cuts to the provincial budget, the PC Party found an opportunity to fling another spitball at the government, and they did something dumb in response.

This was simply a bad, reactive decision by the government to force this to be cancelled. It won’t save anywhere close to the $140,000 budget since many of the costs would have already been paid or committed and are unavoidable. In the end, I’d guess that maybe 50%-60% of the total can be avoided. But there is a new price to be paid, because the bad day experienced by those at the NSLC was ultimately due to that decision being very reminiscent of the bad old Nova Scotia Liquor Commission days when government meddled in their decisions on a regular basis. One can only hope this isn’t the start of a pattern that affects the ability of those at the NSLC to run their business operations without undue interference from politicians. The chances of the government changing their minds on this are virtually nil, given everything else they are grappling with right now. Bad on the PC Party for making it an issue, and bad on the government for their response. But regardless, it’s a shame.

Posted in Uncategorized | Tagged , , , | Leave a comment

The Great Halifax Snow Job

I have always hated winter, and as I get older that sentiment only seems to get worse. This year in particular – at least over the last few weeks – those of us in Halifax have taken it on the chin from winter. But that has been nothing like the pummeling the city has taken from citizens after their poor job of clearing the snowfalls after these last storms.

I remember back in the 1970s when I was still living at my parents’ home the routine of clearing the sidewalks after a snowfall. Often that job fell to me. I didn’t like doing it much, but since my Navy-man dad would get on my case if I didn’t do it to his standards, I usually did a pretty good job at it most of the time. The worst part then as now was the end of the driveway where the city plows would fill it in while clearing the streets.

Having lived in south-end Halifax for 15 years and walking to work every day, I experienced the good, bad and ugly of sidewalk snow-clearing in the 1980s and ’90s, and it was a pain. Corners, especially, even on places like Spring Garden Road, were often an obstacle course after a snowfall. Sidewalks that were not cleared quickly soon got trampled into ice, and walking was often challenging. Every year the news media would report on problems with Halifax sidewalks, and in extreme cases the city would ticket properties whose sidewalks were chronically un-cleared. The biggest problems were often attributed to rental properties whose tenants did not shovel and whose owners did not arrange for clearing otherwise. It was a particular problem for rental units near the universities in the south end.

When I bought my house in Dartmouth in 1997 I was pleased to discover that the city cleared sidewalks here. That turned out to be only a partial blessing, though, as I soon realized it still meant that I would need to shovel the front and rear walkways and stairs to my house, along with the driveway and the intersection where it meets the street. Really, the sidewalk clearing was maybe 25% of the total effort required after a snowfall, so while the city service was appreciated, as a homeowner it wasn’t a godsend. I came to the realization that the main benefit was providing a somewhat predictable and consistent level of sidewalk clearing for pedestrians, which while perhaps not as good as that done by a finicky homeowner, was at least passable and avoided the issues that Halifax had with those who did not shovel at all.

For most of that time, the equipment used for the sidewalks were dedicated sidewalk plows that I assume were leftover from the old City of Dartmouth days. They did a decent job most of the time, though never to the same standard as a conscientious person shoveling would, because the combination of a plow blade combined with uneven sidewalk slabs always left a coating of snow on the surface. Usually, though, they would drop salt afterwards and left a walkable surface most of the time. The one exception was White Juan in 2004, when close to 3 feet of snow defeated all attempts to clear it for days. Eventually some commercial snowblower equipment arrived and slowly cleared it away. I remember watching it occur and it was slow work even for those machines.

A few years ago the old sidewalk plows seemed to go away – probably having reached end of service life – and were replaced with Bobcats run by contractors. These did nowhere as good a job, leaving a surface that was worse than the plows and tearing up turf and damaging property in the process. Thankfully, this year the dedicated sidewalk plows have returned, a few times this past couple of weeks with snowblower attachments instead of plow blades. I believe they are city-owned machines and I hope they keep using these. They don’t do a perfect job either, but seem to be the best you can hope for from something mechanized. To get down to bare concrete they need a follow-up with salt or other chemicals.

The past few weeks have not been White Juan-caliber, but have unquestionably been tough. Lots of snow mixed in with an extended bout of freezing rain and some exceptionally low temperatures in between have made everything a mess. The city has been saying that the low temps make salt ineffective, but it seems pretty obvious to me that they are not using anywhere near as much salt as they once did on either the streets or sidewalks. Street clearing was not good after the latest storm, and most streets are very narrow thanks to snowbanks that have not been pushed back. Whatever the reason, the frequency of appearances by street snowplows here has been noticeably reduced, and there has not been anywhere near as much salt applied in my observation either – good for the environment, perhaps, but hazardous for driving. We have not seen salt on the sidewalks on my street this week either. There is a lot of caked ice on both surfaces and it is very slick.

The complaints I hear from residents on the Halifax side, where sidewalk clearing was just introduced last year, are legion. I have seen pictures taken by people of areas where sidewalk clearing has not been done at all, and others where a pass with a Bobcat has just made a slick surface out of the snow that had been there. It clearly is not as good as the clearing that would have been done by a responsible homeowner. Overall, is it better than the previous system where some properties were not cleared at all? I suspect it isn’t, because you could tolerate a few uncleared sections if the rest of the block was bare concrete to walk on. Now it is just all mediocre at best. It strikes me – forgive me for saying it – like our health care system, where everybody gets some level of service, but nowhere near the kind of care you would get in the USA, say, if you had good health insurance. That is often the nature of public services. Everybody gets something, but you seldom get the superior level you would like, due to cost.

Regardless of the service, be it health care or sidewalk clearing, it all comes down to funding. If the funds are there to pay for good service, that’s what you will get. For that reason I am cutting some slack for Linda Mosher, the city councillor who proposed the move to have the city clear all Halifax sidewalks. It is the job of city staff to come up with reasonably accurate budgets for providing a given level of service. It seems painfully obvious that the city is coming up short in that regard. The kind of storms we have had the last few weeks are unusual, but not unheard of around here. It is Canada, and it is winter, after all. Did the city’s estimates not take into account that we might get 3 significant snowfalls in 2 weeks during February? I can only assume they failed to construct estimates based on that scenario in terms of equipment, staff, contractor resources, and budgets. They just seemed remarkably ill-prepared this last time around. There are lots of other things one could be critical of too, like the generally poor street plowing, the encroachment of snowbanks on street widths, the failure to remove snowbanks at bus stops and hydrants, and their lack of ice-melting, but those are bigger issues than sidewalk clearing. Hopefully some hard questions will be raised by Council about the capacity and cost of providing adequate service, and what the expectations of citizens ought to reasonably be when it snows. It is a tough job, and maybe we are just expecting too much. I don’t know enough to say for certain.

Personally, I think sidewalk clearing by the city is not a necessity and at best is more of a nice-to-have. For my money, I would rather take on the sidewalks myself. But there is a role the city could, and perhaps should, play. They should use their equipment to clear intersection corners, which would have not only the advantage of removing the obstacles created by street plows for pedestrians, but which would also make visibility better for drivers. They should be ensuring that bus stops and hydrants are free of snowbanks as soon as possible. And if they really want to perform a service for homeowners, they could take responsibility for removing the snowbanks left by street plows at the end of driveways, which are always the worst thing for a homeowner to deal with. Instead of clearing sidewalks, that would be a useful service we would really appreciate.

Posted in Uncategorized | Tagged , , , , | 1 Comment

On Retirement

On Friday afternoon, May 31, 2014, I walked out of my office at the NSLC headquarters for the last time as Vice-President, Government & Public Affairs/Corporate Secretary. That brought to an end a little over 32 years of employment with the Province of Nova Scotia, which began in the spring of 1982 at the Victoria General Hospital, and which then took me to the Department of Municipal Affairs, followed by stints at Finance, the Priorities and Planning Secretariat, and Tourism and Culture before ending up at the NSLC. Retirement is not something you have a lot of practice at doing, and now that I’ve come to the end of 2014 and moved into 2015, what will be my first full year of retirement, I thought I’d reflect on the last 6-plus months of not working for a living.

At first, not getting up and going to work everyday felt just like an extended vacation. The fact that it was starting to be summer helped a lot in that regard. And there was no doubt that I needed a vacation from it all. After adding the Communications and Public Affairs role to my existing Corporate Secretary job in early 2013, work life had been hectic. I was thrown in at the deep end when, about a week after starting in the new role, NSLC had the great price change debacle over the Easter weekend at the end of March, 2013. You might remember that – price changes that were supposed to kick in on April 1st instead were mistakenly sent to store systems after close of business overnight prior to our stores being closed for Good Friday on March 29th, and we collected a bit over $27,000 in extra revenue on Saturday. It hit the media before anyone internally knew exactly how it had occurred, and then to make matters worse, Jamie Baillie decided to make it a political issue by saying some foolishness about how an investigation into the whole thing was required because we had obviously done it on purpose. Sure, we’ll tell the world we’re raising prices on Monday, but we’ll intentionally slip it in on Saturday before a holiday instead, because nobody will ever notice, right? It’s beyond idiotic, but that’s what can happen when you give an opposition politician a voice sometimes.

We recovered nicely from that, I thought, when we decided to give the extra money to a charity and set up a quick online poll to help people chose. We nominated 4 charitable organizations, although even that wasn’t easy – our original list had one high-profile charity for whom our staff had collected huge sums of money over the years, and we thought they would be a no-brainer. Imagine our surprise when they said no, they weren’t interested in our offer. I was steamed, to be honest, and I still don’t fully understand why they said no. But in the end it all worked out, with the money going to the Canadian Mental Health Association, despite an attempt by some well-meaning but misguided person to stuff the online ballot box in favor of another organization, and a few overly-cynical voices on social media claiming it was all a pre-planned stunt. I guess no good deed goes unpunished. But the local reps from CMHA were very grateful and sincere in their thanks, so I felt good about it when it was all done.

From there it seemed like we went from crisis to crisis for a while, struggling with a new Minister who seemed to have difficulty understanding the business data we presented, and who was not at all comfortable with the NSLC role in balancing retail sales with social responsibility. She even took the rather extreme step of directing us to pull a social responsibility campaign just prior to it kicking off because she didn’t seem to understand it – not that we were asking for her approval anyway, since we had a Board of Directors to make those decisions. Unfortunately for us, the NDP government was in its last days prior to calling an election and they were hyper-sensitive to anything at that point. Shortly thereafter was some additional foolishness incited by the good folks at Capital Health, who accused both the NSLC and Molson of doing advertising directed at children – us with a billboard that included the tagline “Cocktail, anyone?” and Molson for posting a picture of a glass filled with their cider which the anti-alcohol zealots said looked like apple juice and hence was aimed at kids. I mean, you couldn’t make this stuff up if you tried, but there it was, and we had to go into explainer mode yet again.

Things settled down a bit after the new government came in, although there was the usual extra work involved in preparing briefings and backgrounders on all the things a new government and a new Minister require to get up to speed. In November of 2013, the Department of Health then released the badly flawed Alcohol Indicators Report I wrote about in “Bamboozled” which caused a lot of dust to be kicked up for a while, but the new government had other issues to worry about and soon things were back to a more normal pace for me. I found myself feeling increasingly frustrated when the requests for briefings on the same issues that I had previously prepared so many times for other Ministers and other governments over the years again landed on my desk. Add to that all the usual things expected of a V-P – the meetings, the HR issues, the business planning, you name it – and I decided I had enough. There comes a time when you just can’t do it any more, and this seemed to be that time. Over the 2013 Christmas holidays I decided that I would leave the NSLC sometime in the first half of the new year, and I let the President and Board know when I returned to the office in January.

The process of finding a successor took longer than we originally expected, so I ended up extending my departure date twice. The organization did a great job of sending me off, with various receptions, lunches and the like, and I left with good feelings for all and for the job I had done there. When I first arrived at the NSLC in 2001 it was a very different place than the one I left, and I felt proud of much of what we accomplished, especially for our local beer, wine, and spirit producers. That was part of my responsibilities almost from day one, and I always tried to make it easier for them to succeed and to keep barriers out of their way as much as I reasonably could. Almost immediately after leaving, I was asked to add my name to that of a group of consultants who were trying to get a contract from one of those local associations. With considerable reluctance, I agreed, but have to admit I was almost thankful when it didn’t happen. I really didn’t want to work again so soon, and it was not a problem from my point of view not to win the bid.

One of the things I wondered about on the way out the door was just how much I might be asked for help by those who remained. My successor is very capable, but we only overlapped our time for two weeks and there was no way to transfer all the knowledge she would need. But to my surprise, a couple of chats was all that transpired, so I can only assume she is finding the information she needs. Aside from being called back in one other time over the summer to get my picture taken for the Annual Report, and a couple of lunches with those with whom I was most close personally, there has been next to no contact with the organization. But as someone told me recently, it’s probably better than being pestered all the time, and they’re probably right. It’s quite different from still being there and going on vacation. These days, you never totally disconnect when on holidays even if you travel thousands of miles from home. I’ve finally disconnected.

What really shouldn’t be a surprise, but nevertheless is to an extent. was how so many relationships and contacts just ended when the job did. I know most people are busy trying to do their jobs or make money. But any illusions I may have had about a personal connection to many of those folks have quickly been laid to rest. With a few exceptions, there has been no contact at all. Maybe that’s normal, I don’t know. The NSLC has no vehicle for retirees to keep in touch with either each other or the organization. That’s really too bad, though not all that surprising I guess – when you leave, there really is little benefit to the organization for keeping you in the loop. There is a Nova Scotia government retirees association, but that is a very broad-ranging group and they really don’t relate very well to individual places of work. You would think that with Facebook or other forms of electronic communication these days someone would have created something, but if it exists, I haven’t been able to find it. In fact I have far more communication with my former Municipal Affairs colleagues, whom I left in 1998 but who maintain an informal coffee & lunch network, than I do with NSLC folks. Odd.

For the first few months, the quiet was welcomed. I never really expected this, but I think there was a lot more recuperation, recovery, adjustment – call it what you like – required for me than I ever knew I needed. I have absolutely no hard feelings towards the NSLC, because I had a great career there, but it was gruelling work sometimes, with things coming at you all the time and a lot of pressure, so it took its toll. Plus, after my heart surgery and subsequent complications over the winter of 2009/10, I went back to work sooner than I should have, and never really got over that the way I needed to. I think all those things made me require more downtime after I retired than I counted on. For the first few months I was sleeping all the time, and even now, my nightly sleep patterns are very different from what they once were. For years I was getting maybe 6 hours sleep a night if I was lucky. Work would always be on my mind, and I would toss and turn. Now I am consistently getting at least 7 hours, sometimes 8, every night. It’s great.

What really brought the difference in contact home to me was when the Christmas holidays approached. Working at the NSLC at any level, but especially at an executive level, made Christmas a crazy time. The number of things you were invited to and expected to attend was incredible. There were organization-wide events, early in my time there the traditional dinner/dance, then later on, a Sunday brunch that took its place. There was a Head Office lunch, held on the premises. There were also business unit lunches, workgroup gift exchanges, all the usual sort of things most workplaces have. In my case I would also get invited to whatever the Board of Directors and the Executive Committee decided to do each year to mark the holidays. Then there were the invitations from suppliers, which varied depending on where you worked, but always meant anywhere from a few to a great many invitations. It was actually hard to accommodate all of the social things that went on there over the holidays. For me this year, there were virtually none of those. I had a single work-related contact from one non-NSLC person over the holidays this year, plus a lunch invitation from one of my former staff. That was it. It was a strange mix of good and bad – I didn’t always enjoy all of those things when I was required to attend them, but now I felt funny not even being thought of. All part of the adjustment. I guess when you’re out, you’re really out.

People always asked me if I was going to work after I left the NSLC, and I always thought that I would after some time off. Now, I’m not so sure. I’m lucky in that I have a decent pension, live a fairly frugal lifestyle, and have always been a saver. My only dependents are 4 cats. My little house is paid for, and I am getting by just fine. My mindset about work has changed rather dramatically. I have discovered that even things I like doing are a bit of an irritation if they are imposed upon me now. I have always been good at amusing myself and keeping occupied, and now I have made it a bit of an occupation in itself. I like setting my own schedule, going where I want, when I want, and not having to adjust to other people’s schedules. Still, the lure of some extra cash is out there, and I might take up an opportunity or two to earn some if someone wants me to do a bit of consulting on an issue I know something about. But I don’t have to do it, and that’s a nice feeling.

Besides, it would make more sense for me to do that, something I am reasonably good at, rather than doing what I originally thought I would do with my time – working on my house. I have never been good at home improvement projects, have never really enjoyed that kind of work, and have generally not liked the results I have achieved. A close friend is very good at that, and he always said that he knows he can do a better job than most tradespeople he encounters, who are working to finish something as quickly as possible and don’t always care about quality of work. That may or may not be true, but I have botched enough small projects to know that it really isn’t something I like doing because I’m fairly inept at it. So it occurs to me that rather than spending time in retirement doing something that (a) I don’t enjoy and (b) I am not very good at, maybe I should instead do something that is the opposite of that. I always half-seriously threatened to write a book about my time at the NSLC, but that sounds pretty ambitious right now. Time will tell. As it is, I am still enjoying doing not much of anything. Retirement isn’t exactly what I expected it to be, but so far, I can highly recommend it.

Posted in NSLC, retirement | Leave a comment

Who Do You Trust? The Broten Report and the Sad State of Provincial Finances

This week, the Province released the Nova Scotia Tax and Regulatory Review report, produced by Laurel Broten following a consultation process of several months. While the consultation was not on the scale of Graham Steele’s “Back to Balance” tour in 2009/10, it did involve a number of meetings around the province and input from a stated 250 individuals or groups. The report makes a long list of recommendations for change in Nova Scotia’s taxation structure, its regulatory framework, and in how government operates.

Unlike virtually any other government-sponsored report I can recall in recent memory, it landed with a dull thud for both the public at large and, it seemed, the government itself. Nobody embraced it except for a handful of business groups like the CFIB and the Halifax Chamber of Commerce. Not only did the opposition parties and their partisan supporters immediately start screaming about its recommendations, but so did many members of the public in reaction to the early media reports that it recommended taxing things like books, diapers, and electricity, reducing taxes on corporations and upper-income earners, and eliminating many of the special-interest exemptions currently built into the tax code.

For a report that the government commissioned themselves, the apparent lack of enthusiasm from that corner seemed rather curious. The immediate reaction in the media probably explains a good part of why they are keeping their distance from it. The news outlets did not find it hard to find people to appear on the news saying they hated the idea of taxing diapers and electricity, or putting up the price of gasoline. It is possible, I suppose, that such a deadpan reaction by government may be a communications strategy to not telegraph their punch, should they actually be planning to implement many of these recommendations. After all, it was probably a longshot for the opposition parties to expect that the Premier would stand up in Question Period and say that he supported higher taxes on families with small children. Only time will tell what changes may be in store.

Setting aside the frothy demands of those whose interests are threatened by these recommendations, do they actually make any sense? It is a very lengthy and complex set of recommendations, so my immediate reaction is somewhat mixed. The sense I get is that there is a lot of material here that absolutely should be taken seriously. But there is also a lot of space devoted to things that I just have to wonder why Ms. Broten even bothered about. Let’s take a quick look at both.

The report is positioned as a follow-up to the Ivany report. Its objective is stated as making recommendations related to changes in taxes and regulations to “sustain economic growth and stabilize the public finances” of Nova Scotia. It borrows from the “now or never” language found in the Ivany report by stating “Never is not an option”, and equates governments running continual operating deficits to individuals buying groceries on credit because they have no money to pay for them. The report makes the very correct point that with our population aging, and our labour force not growing, we will not be able to depend on income taxes to fund government programs to the extent we have done in the past. So it should not be surprising that the report looks to consumption taxes as the way to compensate for this going forward.

Just like the Ivany report, it sounds the alarm bells to justify what it is proposing. To quote: “Nova Scotians have to be willing to embrace the fact, or at least accept, that tough action is required today to achieve financial stability and economic opportunity tomorrow.” That tough action includes big changes to the income tax system, to streamline and simplify it; removing many of the existing HST exemptions (even though, as was pointed out Wednesday by the Premier, as provincial law currently stands, some of these changes would require a referendum – something that is just about guaranteed never to happen); introduction of a carbon tax similar to what exists in British Columbia; elimination and rationalization of most government regulations; a rather vague series of recommendations to make government more efficient and responsive; and a freeze on government spending for at least 5 years.

There is so much in the report that one can only touch on a few of the highlights. The goal of simplifying the income tax system is one that anybody who has ever filed a tax return can probably appreciate. There is a reason why tax accountants and tax-code lawyers do so well, after all. Broten cites an estimate that the cost of compliance with income tax systems across the country equates to 2% of GDP, which is absolutely stunning if true. As the report states:

“Simplifying the tax structure was a goal, or principle, of virtually every tax reform effort undertaken anywhere in recent decades, and this review is no exception. One of the primary reasons for the complication of the tax system can be found in the way tax changes are made. Here in Nova Scotia – and Nova Scotia is not unique – changes are most frequently made to address a specific issue at a given point in time. The change could be for economic, political, compassionate, or any number of reasons. The change is made to a specific, identified tax, with insufficient regard for the whole tax “system.” Over time, new governments, new demands, new social needs, and expectations are met with new tax exemptions, increases, credits, and myriad other tweaks and revisions, each of which piles more complexity into the tax system.”

Aside from tax simplification, the report also takes on the objectives of finding ways to reduce income taxes, thereby reducing disincentives to work while encouraging risk-taking and entrepreneurship; moving to more of a consumption/polluter tax model of revenue generation; reducing the general corporate tax rate to make Nova Scotia more competitive, while increasing the small business tax rate to reduce disincentives to grow; recommending a freeze on total government spending; reducing the regulatory burden; repealing outdated and unnecessary regulations; and moving to a model of the full cost recovery of fees. Quite a mandate.

Perhaps the most eye-opening part of the report for the casual reader is the useful context it provides for the existing state of provincial finances. For those of us who have worked in government for a long time, this is not a surprise, but it delivers the bad news in a very effective manner. In short: Not Good. Some of the key points:

• Operating Deficit: $679 million (this is the excess of what we’ve spent over what we took in during the year)
• Total Spending: $10.7 billion
• Total Revenue: $10 billion (of this, $6.6 billion is generated in NS, the rest is federal transfer payments)
• Net Debt: $15 billion, or over $15,000 per person
• Debt Service : $886 million (paying just the interest on your line of credit, essentially)

On the subject of provincial debt, Broten writes, “Borrowing to build for the future – investing in assets such as roads and bridges, transit infrastructure, and state of the art hospitals and schools – is entirely acceptable. Borrowing to fund programs or interest on past debt must be questioned, managed, and eventually eliminated.”

It’s certainly hard to argue with that. From a big-picture standpoint, it is unconscionable for governments to continue to spend borrowed money and kick the repayment can down the road for future generations to handle. Looking at the numbers, I can almost picture my late father trying to balance the family budget and pay the bills, looking at his bank accounts before uttering his favorite expletive, “Cripes!!”.

This again attempts to reiterate many of the same dire warnings about the state of provincial finances we have heard over the last several years. While those whose interests are threatened can argue against the types of changes included in this report and elsewhere, one must wonder what the alternatives are. The report really sets the stage for the need for Nova Scotians to pay more in taxes and fees, perhaps significantly more, while expecting potentially much less from government in terms of services. We probably will not like that very much. But what are the alternatives? If we continue as we have been, at some point we will not be able to borrow money at rates we can afford. And the prospects of ever being able to repay that debt are dim at best. Short of a federal bail-out and becoming a ward of the Government of Canada, I am at a loss to offer any other alternatives.

To illustrate the challenges associated with government spending, the report provides some context:

“Government program spending has increased at more than twice the pace of inflation over the past 30 years. As set out above, 2013–14 provincial spending was $10.7 billion. By contrast, in 1984, the budget of the province was $2.8 billion. Had spending kept pace with inflation, last year’s total would have been approximately $5 billion rather than double that amount.

This is not to suggest that government spending should track inflation. There are a multitude of other factors involved. The cost of programs, particularly health-care services, has escalated at a rate far in excess of inflation, and Nova Scotians should expect to benefit from health-care advances to the same degree as all Canadians. Health care has steadily increased its share of total program spending, from 25 per cent in the early-to-mid 1980s, to 30 per cent a decade later. By 2000, health care had become about one-third of provincial spending, and today for every dollar the province spends, more than 40 cents go to health.

Obviously, health care is the biggest expense. Others include education (13%); community services (10%); interest on debt (8+%); labour and advanced education, which includes payments to universities and colleges (7%); and transportation and infrastructure (4%). This leaves 18 cents on the dollar for everything else: the justice system and police, natural resources, pension contributions, the environment, business and industry programs, etc.

By category, 37 per cent of total government spending pays salaries and benefits of public servants, including departmental staff, doctors, nurses, teachers, and many others. Grants to municipalities and support for individuals on income assistance, in long-term care, and with other needs take 33 per cent; goods and services required for government operations consume 15 per cent of the budget; professional fees, 3 per cent; and finally, interest on debt, at 8 per cent, rounds out spending.”

The report also makes some interesting points on the sources and uses of funds by the province. It notes that personal income tax represents about 25% of NS revenue, compared to 18% in 1983/84, while corporate income tax makes up about 4% of provincial revenues. Add to that the note in the report regarding Nova Scotia’s income tax rates which are among the highest in the nation, the aging population, and the shrinking labour force, and it is not hard to reach the conclusion that the personal income tax well is running dry. This helps explain in part why the report puts such emphasis on consumption taxes going forward.

As part of the tax simplification argument, the report recommends eliminating many of the existing exemptions from the HST such as printed books, children’s clothing, shoes, and diapers; feminine hygiene products; residential energy; and first-time home purchases. It proposes offsetting these in part by changes to income taxes, presumably targeting those changes to people most in need of help. Naturally the opposition parties have instantly jumped on this as a reason to dismiss the entire report.

The report also recommends other changes to the income tax rules, such as increasing the personal exemption amount, eliminating bracket creep, getting rid of the Volunteer Tax Credit and the Healthy Living Tax Credit, and combining the top two income tax brackets into one. This latter recommendation was also jumped on by critics as giving a tax break to the most wealthy, which it would. Aside from whatever it saves in simplification and whatever it provides in incentives for the wealthiest people to continue to want to live here, I find this one hard to understand. My late former boss at Finance, Gillian Wood, used to tell me that since so many Nova Scotians pay little or nothing in the way of income taxes, promising reductions in that area were pretty much worthless politically. So moving to a model with higher consumption taxes with offsets in income taxes may not have the desired effect.

The report also recommends changes to corporate income tax rates to bring them more in line with others across Canada, and paying for this in part by increasing the small business tax rate from 3% to 8%. Again, the recommendation was jumped on by critics, and in fairness, there seems little rationale found in the report to demonstrate that the small business rate is too low. And like some of the other recommendations, the optics are terrible.

The idea of what the report calls a pollution tax, basically a variation of B.C.’s carbon tax, is intriguing. I have long felt that we need to do something along these lines. Thanks to politicians and the news media, the population is hyper-sensitized to gas, oil, and electricity prices, but we are working at cross-purposes. We complain about the price of gas, but look at the number of supersized pickup trucks that are never used for work that one sees in suburban mall parking lots. We scream about heating oil and electricity prices, but we build outsized new homes that need all that space to be heated, cooled, and illuminated, and filled with electronics to entertain us. We want it both ways, and that just isn’t possible. Again, critics pander to the sensitivity of the citizenry to pan this recommendation, but I think we need it.

Having said all that, along with a number of other changes to the way we levy taxes in Nova Scotia, we come to the most curious part of the report. What does it all add up to? The answer, seemingly, is not much. The report includes a summary table, reproduced below (click to enlarge):


Now, perhaps I’m dense, but why would you do all these politically suicidal and wildly unpopular things for what amounts to zero net gain? The two biggest line items are the first, Freeze Expenditures, which although desirable from a fiscal standpoint seems highly problematic in practical terms; and the last, Priority Transformational Investments/Tax Relief/Debt Reduction, which the report really does not discuss as near as I can tell, and which we do not have any insight into. If it is primarily Debt Reduction, then we have gained something. When I see the phrase “transformational investments” though, I worry that it is just more money frittered away.

There is a large part of the report that discusses things that seem oddly out of place in a report that initially focused on tax reform. The second half of the report talks about Nova Scotia’s regulatory environment, with yet another section relating to government fees. Both of these are interesting to some, no doubt, but strike me as somewhat jarring to find in a report discussing tax policy, and at the same time highly academic and rather naive. Having been involved in the “reinventing government” initiatives here in the 1990s, I can tell you that changing the way government works in a meaningful way is a daunting task. But that is another discussion for another time.

I have to give the government credit for commissioning this report, and kudos to Ms. Broten for putting into the public forum some discussion of the dire situation in which Nova Scotia finds itself. While the many of the recommendations are unpleasant, I think it would be a mistake to dismiss them out of hand. In many ways, it comes down to a question of who one trusts – those who try to get us to believe that the situation really is as bad as the report suggests, or those who are trying to convince us that they have a fundamentally different way to fix our problems. Until I see some evidence that there is another set of solutions, I can only believe that some combination of government spending significantly less while taxing us in a different way that leads to more government revenue is our only way out.

Not Good.

Posted in Uncategorized | Tagged , , , , | Leave a comment

What I Learned About Politics – and what I learned about Graham Steele

Graham Steele was my Minister from the time he was sworn in after the 2009 election up to the day he resigned in 2012. Of course I was familiar with him prior to that from his time in opposition and especially from his time on the Public Accounts Committee. His style at Public Accounts was like that of a well-researched prosecuting attorney at trial, starting out with some innocuous questions to which he already knew the answers, then leading the witnesses down an ever-narrowing path to where at some point a “Gotcha!” answer occurs. Having sat in the seats across from him there a couple of times I was all too familiar with that approach, although thankfully I was never the direct subject of his questioning. He discusses all of this in his book, “What I Learned About Politics”, which went on sale last week and has from all reports been flying off the shelves.

When I first learned he was writing a book, I was looking forward to reading it. Books that offer a look at almost anything from the inside interest me, and ones that promise to offer a look at the inner workings of politics in Nova Scotia from the inside are quite rare. Having worked with Graham and other members and staff of the NDP government, along with years of exposure to previous governments, I was interested in hearing some of the stories about what went on inside, things about which I had previously heard only speculation or rumor. I was also interested in reading his take on some of the things I had been involved with which had never surfaced publicly.

The book is not huge, being less than 200 pages, and I finished reading it in short order. My initial reaction was an oddly disappointing one. It does not read like the typical memoir, which in fairness, the reader is warned about early on. There is only a scant amount of space given to Steele’s background and life prior to entering politics, which might have helped us better understand his motivations and his reactions to what came later. There are very few stories about other interesting individuals or politicians he encountered during his political career, which one would think would be included in a book like this. I know from having dealt with him that he doesn’t often show a sense of humor while on the job – not necessarily because he doesn’t have one, but because he thinks work times are for serious discussions and not funny stories. As a result the book reads like a cross between a memoir and a textbook, yet doesn’t quite hit the mark for either one. It seems as if it suffered somewhat during the editing process, either to hit a page count limit or to sanitize it, and as a result it reads a bit choppy and doesn’t fully satisfy the reader.

With reflection though, I began to understand some of the reasons why the book is the way it is. Graham Steele is a highly ethical man, as is demonstrated in the account of the MLA expenses affair that is included in the book. Another example was during the time he was Minister responsible for the NSLC, when he refused to attend the annual Winemakers Dinner during the Port of Wines Festival. We urged him to do so, since industry people wanted to meet him, but he felt it was inappropriate and stayed away. He had also told me earlier this year that he would not be including anything in the book that reflected discussions that took place at Cabinet for reasons of Cabinet confidentiality. No doubt that’s where a lot of the most interesting and juicy stories would have come from, and they are out of bounds for him. I would have loved to read his take on his relationship with his first Deputy Minister at Finance, Vicki Harnish, with whom he had a memorable run-in with at Public Accounts in the spring of 2009, just prior to the election. Knowing Vicki, I’m sure they must have had some interesting one-on-one discussions after he became Minister. But again, I can only assume he felt those were personal and not for publication. Too bad for us.

As the book demonstrates, Steele is not the typical politician. The glad-handing and easy manner one usually encounters with politicians does not come naturally to him. He is a brilliant man, of course, does not suffer fools gladly, and unfortunately at times he lets that show. He sometimes can come across as arrogant and needing to prove that he’s the smartest guy in the room. After a fairly short time I learned that he generally was – he was a Rhodes Scholar after all – so I didn’t let that trait bother me. But I could also see that for others with bigger egos than I had, that would be a problem. My sense was that he had to work really hard to do many of the things that natural politicians do without a second thought. His natural inclination wasn’t that of being warm and fuzzy, glad-handing and working a crowd. It just isn’t him. He is demanding and has high expectations of the people who work for him, and if you didn’t measure up, he didn’t hesitate to let you know that. Without breaking any confidences, I know that a number of individuals at Finance really did not care for him because of that.

Once we began to deal with each other, I came to quite enjoy him. Because he was by far the most intelligent Minister I ever worked for, he understood pretty much everything you put in front of him right away. You didn’t have to try to put things in terms he could understand because he picked up on things very quickly regardless of what it was. I also learned not to tell or show him anything you would later not want him to remember, because he had a memory like an elephant and it would come back to haunt you. We came to develop an excellent working relationship, because, I think, he trusted that I would be straight with him on whatever he asked me, and I tried to respond quickly and accurately on whatever he wanted from me.

One point I recall where our relationship started to develop was in October of 2009 during Estimates. The Estimates debate is an arcane process where Ministers appear in front of a committee of MLAs to explain and defend the budgets for all the areas for which they are responsible. It gets to the core of how our system of government is supposed to work, with Ministerial responsibility and accountability for their portfolios. Many years ago, when government was much smaller and less complex, Ministers probably had much more knowledge of what went on in their departments and how money was spent. Today, with government in Nova Scotia having a budget of over $9 billion and its operations reaching far into the lives of most people, the ability of a Minister to speak intelligently to everything that goes on is necessarily limited.

But the Estimates process hasn’t really changed, so what it has become is a game where opposition MLAs try to make a Minister, especially a new Minister, look bad by asking questions to which he does not have an answer. It is almost like a public game of Trivial Pursuit. Ministers have the resources of staff available to help them, and what happens is that a tremendous amount of effort goes on beforehand as staff members prepare massive binders of charts, tables, graphs and briefing notes to cover any possible question that might get asked. The way it works is that a very specific factual question gets asked, the Minister generally ad-libs for a bit while staffers frantically search through their binders for the answer, which they then slide in front of the Minister to incorporate in the response and finally stop the ad-libbing. From an objective view it is a very costly and wasteful process, but it does provide a degree of transparency and accountability.

In October of 2009, Steele had been Minister for just 3 months, so at Estimates he was accompanied by an army of staff not just from Finance but also from the other areas for which he was responsible, including myself representing NSLC. Like all my colleagues there, I had my trivia binder which I had built up over the years and had updated with our latest financials, briefing notes and stats. NSLC was always a popular topic at Estimates, so I had learned to never be surprised by anything that was asked, and had brought along all sorts of detail in my binder.

The process had dragged along for several hours, with most of the questioning being done by Leo Glavine for the Liberals and Chris D’Entremont for the Tories. Being on the receiving end of questioning must have been new for Steele at that point, but he handled things generally pretty well, his quick grasp of facts being a huge advantage, with only a few instances where he let himself sound exasperated at the question or condescending in his response. But this was an evening session, we had all been there for hours, and as 8:00PM approached we all wanted to go home.

Chris D’Entremont, though, was determined to use up all of his allotted time, and so was asking long, rambling questions with seemingly little point. The Chair even had to interrupt his ramble at one point to inquire if he actually had a question to ask. Eventually that led to this exchange, as recorded in Hansard:

MR. D’ENTREMONT: Mr. Chairman, I know that community wouldn’t be beyond using rowboats either if that meant getting to the nearest liquor store (Laughter) – in complete jest. It would be very nice to maybe move that issue forward, as I know it’s been a concern of the gentleman for some time now.

Just changing a little bit, to maybe go back to wine because this seems to be where I’ve matured to at this point in my life – and at some point I guess I’m going to have to go to scotch or whiskey, like Dad. But wine is where it is right now, and I was wondering where the offerings were coming from and, because of my attachment to French wine, I was wondering what are our offerings in French wine and then, maybe just generally, where our wines are coming from.

Just by chance, I had in my binder a page with all of our wine sales stats by country of origin. I had added it just on a hunch, as nobody had ever asked for that before. But I saw it presented one day shortly before in a meeting, and kept a copy just for this occasion. I pulled it out of the binder and slid it in front of Graham. He looked at it, saw what it was, looked at me, and smiled before giving this answer, sounding about as playful as I would ever hear him:

MR. STEELE: The staff continue to amaze me – no matter what the question is they pull out a chart with an amazing amount of information. I happen to have in front of me the precise figures the member is looking for. Who knew?

It’s getting late. I could do this in quiz form, but maybe I won’t. Where would you think that the highest volume of wine comes from? It is not where you think it is – the highest volume of wine sold in Nova Scotia, by far, is Canadian wine.

MR. CHAIRMAN: The chairman will not allow this to turn into a game show. (Laughter)

MR. STEELE: Okay, being serious for a second here. So the number-one wine, by far, is Canadian wine. I’m doing the math in my head – it is done in nine-litre units, but of course if you have twelve 750-millilitre bottles, that equals nine litres. So these are done in cases. The current year: 122,255 cases of Canadian wine in the five months to date; far behind that would be Australian wine, 58,000 cases; quite far behind that would be American wine at 38,000 cases; Italian wine at 32,000; Chilean at 22,000; French, 17,000; and South African, 10,000.

The others are a very, very small amount – for example, one of the local wines that I purchase myself, but is available in very small amounts would be Lebanese wine – Croatian wine and New Zealand wine. And the other one that I should mention as well, and I think we all can be very proud of this, is 24,236 cases of Nova Scotia wine – and that represents a 22 per cent increase over the same period last year.

Graham scored a point, Chris was deflated, and I felt golden. He would tell me later that he thought I loved the Estimates process, although that really wasn’t true. It was a responsibility I had, and I just wanted to do a good job at it. In later years, Graham began to handle the Estimates without staff present, probably because he thought it wasteful of a lot of time and effort and that he could handle anything asked of him. In retrospect, I think it partly was a reflection of his disillusionment with the entire system at that point.

As his time as our Minister went on, he was very engaged in the hot issues of the day related to NSLC. He was the point man on the entire U-Vint business, and was the one who insisted that we proceed in the way that things played out, explaining that allowing them to operate under a regulatory regime would be foolish since some operators had already demonstrated their contempt for the law as it was. The gory details of the U-Vint affair are far too detailed to explore here and should be the subject of a future entry, but make no mistake, the position taken to prosecute was a government position and one that was led by Steele, and not without some difficulty.

But as was evidenced there and on other issues, he began to have some challenges getting things approved. The rumors about him and the “boys in the Premier’s Office” being on the outs were soon no longer rumors, and he became very sensitive to them injecting themselves into what he thought was his business as Minister. He recounts some of this in the book and I know that I was once the recipient of a very pointed directive from him in a meeting about how to respond when they contacted us. What he seemed not to fully understand was the reaction of the bureaucracy any time the Premier’s Office calls on anything – you respond, immediately, and ask questions later. That’s just the way things work, because they have the ultimate power, and as a staff member you have to do what they ask. The bureaucracy presumes that the Premier’s Office and Ministers are all on the same page. His problems with that office caused some difficulty for staff, and I learned to always immediately let him know whenever they called.

His “12 Rules of Politics” are no secret to anyone who has been involved in government for any length of time. This is probably the first time they have been put down on paper, though, and he deserves credit for doing that. They have gotten a lot of attention from columnists and reporters in their assessment of the book. But for me, the more interesting list is his 10 “Rules of Finance”, which have gotten surprisingly little attention. I think these are far more important, maybe because I once worked at Finance and later at Priorities and Planning, now Treasury Board, and dealt with those issues during that time. That set of rules really gets to what we struggle with in government, day in and day out. Since the 1980s, we have not had enough money to pay for the amount of government we seem to want. The result is that politicians continue to expand the role of government using both higher taxes and, more often, increasing debt.

But as he points out, a program, once established, becomes very difficult to eliminate. There is always a constituency that will kick up a fuss, get in the media, and declare that the end of their world is nigh if this program goes away. The opposition parties will use the Rules of Politics to their advantage, and most of the time, the program stays. During my time at Priorities and Planning, I was involved in the program review that the Hamm government undertook in 2000, and our favorite example then was the School Milk Program. While on the surface it was an admirable program, one that provides a carton of milk daily to kids of a certain age in schools, what we discovered was that it was the outcome of lobbying by the dairy interests, and that the number of kids who actually needed the milk as a dietary necessity due to the financial circumstances at home was very small. But there was no way it could be eliminated or changed to something more effective. It would have been political suicide. That lesson was learned well by the Hamm government and as Steele notes in the book, only a tiny number of programs (he says 3, my memory is that it was slightly higher) were eliminated.

In the end, the book is a bit of a sad story. I think Graham probably knew early on while still in opposition that it would not end well for him because he was so different from those around him in the House. But perhaps he had hopes that things would be different once the NDP formed a government. The difficulties and frustrations he had with his leader are really no different than those people at high levels in any corporate organization experience with their CEOs – some people are favored over others, the CEO doesn’t always behave the way you would hope, and sometimes instead of working as a team you have a bunch of people all pulling in different directions. I suspect that kind of behavior is more common than the ideal.

I was sad when he resigned as Minister, and I sent him a note telling him that I thought he was the best Minister I had ever worked under. I meant that then and still do. If you’re interested in politics, especially Nova Scotia politics, I recommend the book. But if you’re a political junkie looking for a bunch of juicy stories, it’s a bit like being invited to dinner at a fine restaurant and being escorted out after the appetizer course. A lot of the most enjoyable parts aren’t being served.

Posted in Uncategorized | Tagged , , , , | 1 Comment

You Could Look It Up

For all the things that government gets criticized for not revealing, there is a good degree of transparency in its financial reporting, at least when it comes to certain things. It does take a bit of understanding to know where to look, and the types of things that are available versus what isn’t. The main source of this information is the Public Accounts, which is the annual financial statement for government as a whole, plus reports by Departments and agencies.

The detail of departmental spending is found in the Supplement to the Public Accounts, which is published annually as well. It is found HERE . Memory tells me that it used to be published sometime after the main Public Accounts were released, but recently they have all come out at once.

I remember when I first encountered the Supplement. I was working at Municipal Affairs when Vince Smith, one of the senior managers in the Finance group there with whom I worked, dropped a thick document on my desk. Back then in those days prior to the Internet and electronic document distribution, each Department received a few printed copies of the publications produced by Finance at year-end, and the Supplement was one of them being circulated this day. Vince explained to me what it was and suggested that I browse through it, since my name was in it along with most others in the Department. I was astounded to find that it contained the salaries of everyone in government making over $25,000 a year, plus anyone who claimed expenses over a certain amount. It also contained the names of any group or business to whom government paid money. I’ve tried to find the references to the statutory or regulatory requirements defining the thresholds for inclusion in the Supplement, surprisingly without success. The Public Accounts mention the Finance Act, but there are no thresholds I see in the legislation, and I have not found any associated regulations defining them either. Strange.

When I began browsing that document I did what I expect most other government employees did. I found the entries referring to me, then I looked at the rest of the listings for my Department. Since I only generally had a rough idea of what my co-workers earned, this was enlightening. Then I looked at listings for other Departments for people I dealt with. I had what I expect was a pretty common reaction, either incredulity with how much some people you dealt with and didn’t think much of were overpaid, or surprise at how little some good people made. You got used to the exposure after a while and began to accept it as part of went with the job. The fact that few people actually noticed most of what was in it helped in that regard.

Comparing the first available online supplement (1996) to the most recent, several things stand out. Of course, more people are listed, both because government has gotten larger, and because it now includes most people who work for government. The $25,000 annual salary threshold hasn’t changed over the years, and most people now make more than that. The other thing that jumps out at me is that relatively speaking, government now pays people a lot more than they did in 1996, even accounting for inflation. The Bank of Canada tells me that wage inflation between 1996 and 2013 was about 44%. Now, I can’t tell you exactly what the provincial government’s wage inflation was because that analysis would go way beyond what I have data for, and you would also need to normalize it for growth in the sheer numbers of people working for government. So I look at it a different way.

Let’s compare a Deputy Minister’s salary, not to pick on them but rather because they are some of the most easily-identified people to find in the document. In the 1996 Supplement, Deputies were making about $85,000 to the low $90,000 range. Today, Deputies make from $170,000 to just below $200,000, just a bit more than a 100% increase. The same holds true for judges in the Department of Justice. Other positions are a lot harder to identify, since titles are not included in the listings and job ratings can change. But looking at some names I know, it seemed that most Directors and senior management types were in the $60,000 to $70,000 range then, and today they would all be over $100K. Perhaps not quite 100% inflation, but not far off it. It seems that in general, government is paying at an overall much higher rate than used to be the case for the same level of skill.

The other interesting thing in comparing the 1996 document with today’s is how much higher the top end is now, comparatively speaking. The highest salary I found in the 1996 document was $113,000. There were a relative handful of people over $100,000, perhaps less than a dozen (I did not try to make an exact tally). In the current document, the highest salary I found was about $340,000, and there are many over $200,000. Interestingly, the highest-paid positions were not the Premier, or the Deputy to the Premier, but rather the Chief Medical Examiners (we apparently have 2 of them, each making the same amount)  – admittedly a very specific and high-skill job, and not one I suspect many people would want anyway. I don’t know who held that job in 1996 so I can’t tell you what it paid back then. None of this includes the people outside the civil service in places like District Health Authorities or universities, who are listed in the separate disclosure statements now required to be filed by those bodies, and which often tend to pay much higher rates than government for a given position. They can be found HERE.

Now, I recall the days in the 1990s when we used to discuss over coffee why anyone would want to be a Deputy. The level of responsibility was way out of whack for what they made, and so some adjustment beyond the inflation rate was needed. It used to be that the conventional wisdom said government overpaid for jobs at the low end of the skill scale and underpaid at the professional/management levels. Many of those sort of positions had their compensation levels artificially depressed by the boffins within the Civil Service Commission over the years in the name of trying to save money. Getting a position approved for salary reclassification was often impossible, and only when you tried to refill it and got no takers would the salary be adjusted. So some change was needed.

Back in the 1990s the Province generally paid significantly less than the Federal government for similar positions, and usually less than the City of Halifax/HRM also. That made it tough to recruit people into jobs who were well-qualified, so you sometimes were forced to hire people who were willing to work at that salary level but weren’t as good as you had hoped to find. Other times you had turnover as people left for better pay elsewhere and you experienced the resulting gaps in productivity and service delivery. Eventually you get forced to pay for talent at market rates, and perhaps this is what happened provincially. And since there is pressure for internal equity to at least some extent, over time you get a jacksaw effect where eventually others doing similar work get the benefit of an increase when they get too far out of step with their provincial colleagues.

One could argue that the pretty-much ironclad job security the Province offers, along with what was then a guaranteed pension (not quite the case these days), and very good benefits, offset the basic salary number to an extent, and that is true. It used to be that you could explain away the relatively lower provincial government salary rates by pointing to the pension and benefit plans. But when people see a job posting, pretty much the only thing they notice is the salary range, and those other aspects were a tough sell, especially for younger candidates, so government is pretty much forced to pay salary rates close to any other employer these days. I do not mention working conditions, because for a large group of people, they go nuts trying to work in government. The pace and style just isn’t for them. So you need a certain kind of mindset to be happy working in government, especially long-term, or it makes you crazy.

In the interests of full disclosure, I benefited from this as much as anyone else did. I moved around a fair bit in my government career and usually went to a better-paying position with more responsibility when I did. I make no apologies for that, and I think government got decent value from my services. The high cost of mediocrity is what kills you, where someone who has been doing pretty much the same job for many years with no particular distinction gets reclassified in order to keep the peace in their Department or division. I can’t say how much of that exists, but it’s there. And government just seems to have more people in it doing more things these days, from my experience, so they all cost you.

So this explains in part why government costs so much. You have to advertise positions at salaries close to market rates to recruit people, you have to add the pensions and benefits, and then you have to eventually re-establish internal equity by adjusting everyone else’s pay rates to match. Expand the number of people working for government, especially at the top end, and the costs increase exponentially. There are a number of other reasons why we spend so much now as compared to then, including the loss of what was a rather frugal management philosophy back then, the adoption of the concept of “best practice” in many areas regardless of any demonstrated need, the lack of any meaningful controls on a variety of types of spending, and of course, a much greater scope of government services these days. Not only does the public demand more from government, but so does the bureaucracy, and it all costs money. It is a vicious cycle.

Speaking of spending, the other piece of the Supplement that is equally interesting is the listing of everything else government spent money on. Government spends a lot of money on all sorts of things. I’m not even going to try and convince you, dear reader, that it is all worthwhile. That obviously depends on your perspective. As Casey Stengel used to say, you could look it up. Do that, and decide for yourself. It’s not all wasteful, as some in the media or elsewhere would have you believe. But there is a lot of relatively little stuff – say, $250,000 or less these days – that just happens. Such is the nature of government. It flies under the radar most of the time. All the bureaucratic controls and sign-offs and oversight in the world won’t stop it if the right people are behind it. There are ways to move money around and spend on things that any good bureaucrat can do, and nobody will even be aware of it, much less stop it.

In a future entry, I’ll expand upon this with a focus, not surprisingly, on the costs behind Nova Scotia’s anti-alcohol crusade and how the money gets spent.

Posted in Uncategorized | Leave a comment


Over the past 7 years, Nova Scotia has been at the leading edge of a movement attacking the use of alcohol, under the guise of a public health initiative. Unfortunately, the reports used in this attack are inaccurate at best and deceptive at worst. I have written about some of this in earlier entries. This entry will discuss the most prominent of these reports, and how Nova Scotians have been bamboozled by those responsible.

One of the first broadsides launched against alcohol in Nova Scotia was the 2007 report Changing the Culture of Alcohol Use in Nova Scotia,  produced by the then Department of Health Promotion and Protection. That report appeared on the Department’s website without much advance warning to anyone outside the Department – in my case I got a call about 40 minutes ahead of its release – and was never vetted through any of government’s central agencies or approved by Cabinet, because they never saw it either. I heard afterward that Barry Barnet, the Minister at the time, was the subject of some heat by other Ministers after the fact for not bringing such a policy to his colleagues first to see what they thought of it. While it was the cause of some concern at the time, it now appears mild compared to what followed.

The current cornerstone of the various anti-alcohol reports relied upon by the Public Health lobbyists in Nova Scotia is the infamous 2011 Alcohol Indicators Report. That report emerged in 2013 from what had become the Department of Health and Wellness, but unlike previous reports from that Department in its previous incarnation, thankfully was intercepted before it was broadly circulated. Nevertheless, a number of players in the anti-alcohol community apparently received a draft version and immediately began quoting it. When it made the rounds inside government in 2012, the obvious flaws and outright misstatements it contained caused many reviewers to have issues with it. While it may be no surprise that the NSLC took exception to many of its statements, others in government also were uneasy with its methodology and conclusions.

Those objections resulted in it being sent back to Health with instructions for them to clean it up. Things were quiet for a while, and it never resurfaced prior to the government changing in the fall of 2013. Not long after the new government took over, Jean Laroche of CBC somehow became aware of it and the Department agreed to release it to him in November. How Jean found out about this, I obviously do not know, but it would be interesting to find out. When I became aware of that impending release, I challenged communications staff at Health as to why that would happen since it had been rejected by government previously. I was told that they felt the previous embargo no longer applied given the change in government, and that they intended to release it. Minister Leo Glavine hinted in his comments at the time of Jean’s story appearing that it may have been suppressed initially for political reasons – something that seems highly unlikely with Maureen MacDonald in charge – and that he wanted it out. How he could reach such a conclusion one can only speculate.

The report made a bit of a splash when the CBC story initially ran, but likely most people never noticed it. That’s probably a good thing, considering some of the misleading statements the story contains, like “revenue from selling booze is easily eclipsed by how much is spent on alcohol-related health, hospital and police costs” and that it “shows Nova Scotians drinking more than most Canadians”. In actuality, we are 6th in total volume sold and 8th when that is adjusted for alcoholic strength, as shown in this table. Nova Scotia’s overall consumption per capita is in the lower half of all Canadian jurisdictions, and the volume sold continues to decline each year. The story also states that “Health minister Leo Glavine says there needs to be a cultural shift in how Nova Scotians treat booze”, which probably just means that the Minister had spoken to Dr. Strang and his colleagues at Health prior to speaking with the media. I can’t blame Jean for the story, as he was given the material he cites by the Department, so it is not surprising that he took it as fact.

Now that the report is out in the public domain, the anti-alcohol troops are constantly referring to it. So, let’s take a look at what it says. You might be surprised to find how much of what it contains is simply not true.

If there was ever a report crafted to lead to a conclusion, this is it. The authors used everything in their bag of tricks to present a misleading view of reality. They contend that per capita consumption of alcohol increased over a 20-year period ending in 2010, but don’t mention one important point. If they had used 1989 as their starting year, and not started the calculation at the time of the 1990 economic downturn, when sales slumped, the number would have actually gone down (and has in fact continued its decline in recent years, as the volume of alcohol sold in Nova Scotia has been in constant decline for the last 5 years). They contend that “unrecorded consumption” – duty free sales, home brewing, smuggled booze, etc. – would inflate these numbers even more, ignoring the fact that such has always been so and is not unique to that period. They also raise doubt about the figures used to calculate alcohol strength, but completely ignore light beer and lower-alcohol wine, which is an important segment of the market that has grown over the last two decades. By ignoring the reality that consumption has in fact dropped, they can then blame the ghost increase on the addition of agency stores and private wine stores during the period in question. If that isn’t creating a straw man, I don’t know what is. But it is but one piece of a larger puzzle that seems designed to purposely mislead the reader.

In Canada, there are three sources of national information on alcohol use: the Canadian Community Health Survey (CCHS), the Canadian Alcohol and Drug Use Monitoring Survey (CADUMS), and the Canadian Addiction Survey (CAS) of 2004. CADUMS, sponsored by Health Canada, is conducted annually to assess alcohol and other drug use among Canadians age 15 years and older. It is specific to alcohol and other drugs, unlike the CCHS which covers a broad range of health indicators. CADUMS was launched in 2008 and derived from the 2004 CAS. Taken together, both the CADUMS and the CAS surveys highlight encouraging trends in Nova Scotia, including a decline in hazardous drinking. In fact, the report includes a number of statistical measures showing that alcohol-related harms are in continual decline. But don’t look for that to be highlighted in the report or mentioned by the anti-alcohol forces in Nova Scotia. In virtually every case they dismiss that information in favor of other measures that support a conclusion that things are getting worse.

A report created to reach a predetermined conclusion cannot let good news on this front  stand, given the objective of creating the illusion of a crisis. Therefore, the authors dismiss the CADUMS data and instead endorse the conclusions of the CCHS, which covers a much broader range of issues than just alcohol and drug use, ignoring that it is likely a less credible source when it comes to alcohol alone. This leads to one of the most troubling things about this report. When government departments issue health-related reports that are held up by doctors and Ministers as fact, the general public is inclined to believe them. The real question is why the doctors and public health professionals responsible stand behind what they must surely know is questionable information and misleading conclusions, especially when there is other information available to them that would put those conclusions into serious doubt. It is almost as if they believe the ends justify the means.

The report also weighs in on alcohol use by university students in Nova Scotia. The same pattern of questionable data is found here. Somewhat incredibly, there is no reliable recent data available on this, but the authors wouldn’t let that stop them from drawing some conclusions regardless. Therefore they used data comparing alcohol use among Atlantic-region university students – not Nova Scotia undergraduates alone, but also that from universities in New Brunswick, Newfoundland, and Prince Edward Island – with students from other Canadian regions, found in a survey that was conducted during March and April of 2004. That’s right – 2004, a decade ago. The data is ancient, not specific to Nova Scotia, and hardly relevant to a current study, but no matter – they use it to conclude that today’s Nova Scotia university students drink more than their counterparts. Incidentally, this same flawed conclusion was more recently repeated in a report issued by Students Nova Scotia, based upon this same old data. Such is the danger of this type of report – once issued, it becomes gospel, even if it is misleading. The same holds true regarding several other datasets cited in the report, where they include research done by others as fact without regard to its validity. My own opinion, based admittedly on anecdotal reports, is that I think there may well be a troubling degree of alcohol abuse among a segment of university students, and I find it odd that this obsolete data is all that is available.

The report (and the CBC story) repeats the well-worn statement that “the average age of first alcohol use among Nova Scotia students in grades 7, 9, 10 and 12 was 12.9 years in 2007.” There are two problems with this statement, the first of which is that the internal HPP study that came up with the number ignored the 30% of respondents who do not drink at all by leaving them out of the calculation. That’s a bit like saying 100% of Nova Scotians smoke, by ignoring all the nonsmokers surveyed. If the statement was altered to indicate a qualifier like “Among those who drink alcohol…” then it would be more credible, but that is never reported, despite it being brought to their attention on several occasions. Those responsible should know they are misleading their audience, but they do it anyway.

Meanwhile, CADUMS stated in 2008 an average age of 19.5 years for first alcohol use. The significant difference between that number and the HPP figure ought to be a red flag for the authors, but they ignore it. The NS report claims that “the Student Drug Use Survey age of first onset is likely a more accurate assessment of the current age of first alcohol consumption in Nova Scotia”. Why, though, we do not know since they don’t say why that is. One could say that it is conjecture and not based on evidence. One could also say that the lower number is also much more alarming and thus better for the agenda at hand. There is no acknowledgement of the possibility that the Nova Scotia Student Drug Use Survey could be biased as a result of young people seeking to state a lower age of onset because they feel it challenges social norms or is otherwise what those doing the survey want to hear. Nor does the Student Drug Use Survey provide any context at all for the question – first consumption of alcohol could include a small taste or sip at a religious ceremony, family dinner or holiday celebration. The implication it leads one to believe, though, is that your average 13 year-old is pounding back the booze. Not true.

The report then segues into attempting to quantify the amount of disease caused by alcohol. This is where things really begin to go off the rails. It starts by claiming that alcohol is an intoxicant directly linked to avoidable illness, injury, and death. While perhaps this could be accepted as a true statement on the surface, it is misleading since it is the harmful use of alcohol, and not alcohol consumption itself, which is linked with these things. Most people do not consume alcohol in a harmful manner, so the statement is misleading. Seems to me that we are seeing a pattern here.

The report then goes on to state that “The calculations in this report were made by applying the 2002 Nova Scotia-specific attributable fractions to disease conditions known to be related to alcohol…”, once again using data that is very old to support a conclusion. Not wishing to stop there, the authors compound their error by providing very specific numbers and rates with respect to alcohol-related hospitalizations, deaths, and crime. For example, on page 22 they claim an increase in alcohol-related deaths from 182 in 2002 to 231 in 2008. The precision of these numbers suggests a level of certainty and exactness which in reality does not exist. Nobody can say with any degree of certainty what such a number would be. Here’s the reason why.

To put it simply, most disease conditions that the report associates with alcohol can be contributed to by other risk factors, which creates a challenge in determining actual cause. It is misleading to point to one factor and isolate the number of deaths associated with that alone – because you are implying that the person would not have died if not for that. In the end, determination of the cause(s) of disease is usually not objective, and is instead a judgement call, which introduces a strong potential source of bias. At best, the figures included in the report relating to disease can only be considered notional estimates, not hard numbers, because of this effect. The number is somewhere between zero and “x”. But the result of including specific numbers in the report without qualifying statements is that the public and the media take these figures as fact, without any understanding of how they are derived and the very real limitations behind the numbers. Not surprisingly, the CBC story cited these numbers as fact. It is misleading and irresponsible to present data conveying a high impression of certainty when none exists, and not include the disclaimers which should be tied to these figures. I don’t blame the CBC for that omission. It should have been made much more clear in the report.

The other problem with this approach is highlighting one factor and making it the poster child for these problems. You could do it with any number of things. A similar study could be conducted to determine the death toll caused by cheeseburgers, or ice cream, or going to the beach. In the end, what does it mean? Life does not give you any way out in the end that does not result in dying. Elimination of any of these items does not change that. One could argue on a quality-of-life basis, but people make those choices every day. They do not always choose to do the thing that maximizes their chances of living to 100. The death toll number is meaningless, since the death toll for life is always 100%.

The report also makes a fairly obvious attempt to play down the benefits of moderate alcohol consumption. It states, “Some studies suggest that low levels of alcohol consumption may have specific health benefits for some groups including lowering the risk of coronary heart disease, ischemic stroke, and possibly blood pressure”. In fact, it is far more than a suggestion. Canada’s low risk drinking guidelines (LRDG), adopted by Health Ministers from all provinces and territories, are derived from evidence showing that at certain levels of alcohol consumption the benefits outweigh the risks. The point where the benefits and risks cancel out is the level of zero net risk, which is the basis for the LRDG’s recommended daily and weekly drinking limits. Whatever those benefits may be, this report makes no attempt to quantify them or include them in the analysis.

The report also includes the statement that “No pattern of drinking is without health risk…”, which is both meaningless and alarmist. Anything we do, from barbecuing dinner, crossing the street, taking a shower, or driving to work involves risk. It gets back to the cheeseburger example noted earlier. This statement also contradicts the basis for the low-risk drinking guidelines. I’ll go so far as to say it suggests a zero-consumption or Prohibitionist mindset at work on the part of the authors, all claims to the contrary notwithstanding.

But it then gets even worse. The involvement of alcohol as a cause of social harms is particularly difficult to estimate. It is certainly a contributor in some cases, and nobody can reasonably deny that. But trying to quantify those numbers with any precision in terms of financial cost to society as a whole introduces another entire set of problems. Nevertheless, the report attempts to do just that. It includes such unvalidated (I daresay, absurd) statements as “Police in Nova Scotia estimate that 90.0 percent of their work is related to drugs or alcohol” in an attempt to justify their conclusions. Setting aside for the moment the reality that there has never been any attempt by any society to make this a financially offsetting relationship – alcohol has, of course, been part of human existence for thousands of years, for both good and bad – the issues with this section are serious.

The report attempts to attribute direct and indirect costs to alcohol use in order to come up with a “costs of alcohol” figure, apparently based on a report done by economist Mike Foster for HPP in 2010, which, to my knowledge, has not been published. Any attempt to determine alcohol-related costs again raises the issue of causality – whether or not alcohol is a contributing factor to costs, and to what degree. Again, very precise numbers are provided, indicating a high degree of certainty, but without any discussion of the imprecise and subjective way in which these numbers are derived. Since the report is not available, nobody knows how those numbers were generated. We’re supposed to accept them as fact, and not just educated guesses or outright speculation.

Not only are the avoided costs associated with the health benefits of moderate alcohol consumption apparently not considered, neither are the significant other benefits derived from the alcohol industry in Nova Scotia. The economic benefits derived from the people working in our local breweries, wineries and distilleries, to the tourism revenue generated from our emerging wine region and those who supply it with grapes and other inputs, to those who work in our local bars and restaurants that serve alcohol, rate not a mention. These figures were quantified in an Economic Impact Study sponsored by the NSLC in 2012, and showed the industry as a whole generated $760 million in provincial revenues. It would have been nice of the authors to note this in some manner, but it was ignored.

Sadly, but perhaps not surprisingly, by ignoring all but direct government revenues derived from alcohol, while attributing very specific costs to areas that are not easily quantified, the report not only goes off the rails but then hurtles off the train trestle into the river below. It concludes that in 2006, fiscal revenue to the provincial government (mostly NSLC profits, with some other small tax and fee-related amounts added in) was $224.2 million, while direct social costs from alcohol – medical treatment, policing, corrections, and pretty much anything deemed by the authors to be attributed to the abuse of alcohol – were $242.9 million. Add indirect social costs from alcohol, mostly loss of productivity, estimated at $249.6 million, and the report shows it is an overall loser for the Province. This was where the objections to the cost/benefit analysis were raised at the time as being misleading, since you cannot compare only audited direct financial benefits with both direct and indirect cost estimates, especially when most of those costs are based on assumptions and notional calculations at best. There is also some question as to whether how much of the “loss of productivity” is a cost to the province at all, or if it is mostly an issue for the individual involved. The many issues with its contents and conclusions led to government directing that the report be put on ice until it was fixed. But it was never changed prior to being released to CBC in late 2013, and now the anti-alcohol lobbyists are quoting it as fact in their attempts to, among other things, have HRM pass a restrictive municipal alcohol policy.

Obviously, in my role at the time working for the NSLC, it was my job to raise our concerns with the report. But that doesn’t mean I was trying to deny reality. There are groups within society for whom alcohol is problematic, and efforts need to be made to help those people. The improper use of alcohol by young people, particularly those in university settings, is one that needs attention. I also understand that different reports can provide different results, and that there is no single right answer for a lot of things. But when you trumpet things that you have to know are incorrect or misleading, by issuing a report that lacks any sense of balance or objectivity, that crosses a line. Health & Wellness (and especially the previous HP&P) has for the last several years spent lots of time, effort, and taxpayer money trying to create an illusion of a larger problem. They provide funding to groups who are calling for sweeping changes to the way alcohol is sold and used in Nova Scotia, based upon the largely misleading conclusions found in this and other reports. They are using public money to lobby municipal politicians using very deceptive information. They are calling for significantly higher prices, advertising bans, reduced store hours, fewer outlets, and all sorts of other draconian measures that mimic what they previously did with tobacco. But alcohol is not tobacco, and unless you believe there needs to be a type of quasi-prohibition instituted in Nova Scotia, that is misguided. And that’s the sad thing about this entire exercise.

The 2011 Alcohol Indicators report was obviously produced at considerable expense and effort, and if properly directed it could have been a useful exercise. There are a few nuggets of useful information found in it, and the criticism of it I state should not be taken to conclude that there are no problems with the abuse of alcohol in this province. My criticism is primarily directed at those responsible for the anti-alcohol campaign in Nova Scotia over the last several years, and those who produce reports such as this using public funds. We are not awash in money in this province, and resources should be directed to help those in need of help, not to create issues that are largely an illusion. Public dollars should not, in my opinion, be used to support lobbying efforts by public employees that are at odds with government policy. Nor should those resources be knowingly used to promulgate incorrect, misleading, or outright deceptive conclusions. The fact that public health professionals are behind this is even more troubling. People tend to believe what they hear from such officials at face value. The health officials have to know that much of what they are saying is highly questionable, yet they continue to push an agenda that is at odds with what the public would want, at odds with government policy, and at odds with what the facts would suggest. It suggests a group that is out of control. It is, frankly, unconscionable. The ends do not justify the means. We are being bamboozled, and it needs to stop.


Posted in Uncategorized | Tagged , , | 1 Comment