Liberals plan repeal of PC laws aimed at fiscal constraint

Sales taxes and highway tolls may hit the pocketbook the hardest, but there’s a lot more to a new Liberal bill that would repeal a range of Progressive Conservative-passed laws.

​The move will dismantle many of the constraints that the Lord and Alward governments tried to impose on public spending and reduce soaring deficits.

The provincial government says the legislation was all but useless and accomplished little.

"We are repealing gimmicky legislation that was passed over the years,” Finance Minister Roger Melanson says.

But the PCs see the laws as essential to keeping politically motivated spending in check. And Tory MLA Blaine Higgs says their repeal signals a step backward.

Higgs says Premier Brian Gallant is being “significantly influenced by the traditional politicians of the past … I mean when do we start to do things differently? This is not different. This is traditional politics at its worst."

The repeal bill was introduced Friday and is unlikely to be passed by the legislature for several weeks.

The most prominent law being repealed requires a referendum to be held on any increase in the Harmonized Sales Tax, any introduction of a new tax, and any introduction of road tolls.

But Melanson’s bill goes far beyond those two high-profile changes. Among the other requirements being repealed:

• That money collected under the provincial gas tax be dedicated to road construction and maintenance.

• That any new program spending be funded by cutting money for existing programs.

• That the deficit go down by at least $125 million a year and, once balanced, not return to deficit — with a salary penalty of $2,500 to cabinet ministers if it doesn’t happen.

• That the Department of Finance release quarterly updates analyzing whether the deficit will be higher or lower than forecast.

• That political parties get their election platforms independently costed, and lose their public subsidies if they don’t comply.

While the legal requirement for quarterly budget updates will vanish, the Gallant government promised during the election campaign that it would continue issuing the reports.

Higgs is particularly angry about the repeal of his Fiscal Transparency and Accountability Act, which contains the platform-costing provision and the deficit penalties for cabinet ministers.

"It was unique. It required cabinet ministers to be accountable. It required us to pay attention in elections and not blow our budgets in the election process,” Higgs says.

But Melanson says it’s wrong for a government to be restricted in its options by laws passed by a previous government.

"It really bound present and future governments around how they could deal with fiscal challenges,” he says.

Legislative loopholes

Some of the laws contained loopholes: the Fiscal Transparency and Accountability Act, for example, waives the requirement for $125 million per year in deficit reduction if there is an economic crisis.

And most of the laws contain no enforcement mechanisms. The 2006-2010 Liberal government of Shawn Graham ran record deficits despite the legal constraints put in place by the previous PC government of Bernard Lord.

Melanson’s bill also repeals the Lord law creating the so-called “rainy day” fund. It allowed the government to set aside money when it ran a surplus and use the money to balance the budget in years it risked deficits.

But the auditor general and others criticized the fund, saying it was an accounting fiction because governments can’t stash a surplus for use in a later fiscal year.

The Liberals are also repealing a section of the Legislative Assembly Act that prevents MLAs from crossing the floor to sit with another party.

The law, passed by the Alward government, says any MLA who leaves the party he or she ran with in the last election must sit an independent or resign to run in a byelection if he or she wants to join a different party.