Election speculation swirls with N.S. throne speech

Nova Scotia's NDP government opens the spring session of the legislature Thursday with a throne speech that could herald the start of a campaign culminating in a provincial election as early as this fall.

Nova Scotia's NDP government opens the spring session of the legislature Thursday with a throne speech that could herald the start of a campaign culminating in a provincial election as early as this fall.

Typically, throne speeches are vague documents laden with platitudes and light on details. However, they can provide clues to a government's political strategy, particularly in an election year.

With Nova Scotia's finances improving and the economy growing, Premier Darrell Dexter sounds like he's ready for the hustings.

"We stand on the precipice of one of the most prosperous periods of our province's history," he said in an interview Wednesday, drawing attention to the spinoffs resulting from the $25-billion federal shipbuilding contract recently awarded to the Halifax Shipyard.

"All of the economic forecasts show that after 20 years of the worst economic performance in the country, we will soon start to climb up the ladder of GDP growth."

Speculation about an early election this fall ramped up last week when Finance Minister Graham Steele announced that his spring budget — to be tabled on Tuesday — will include a "modest but real" personal income tax cut.

Nova Scotians pay among the highest corporate and income taxes in Canada.

Liberal Leader Stephen McNeil says the tax cut is just a distraction.

"They're trying to get Nova Scotians to forget about the cuts to education, the cuts to health care, the increase in the HST — and trying to remake their image towards an election," he said.

"We're all getting ready for an election campaign. We know one is coming at some point, whether it's in the fall or the spring of next year.

Premier won't rule out fall vote

On Tuesday, Steele followed up with a pledge not to increase any of the government's 1,400 user fees.

Steele has already said there will be no tax increases in the budget, and his latest budget forecast — released last Tuesday — showed he is on track to balance the books by the spring of next year.

The majority NDP government begins its fourth year in power on June 9.

Dexter said he won't rule out a fall vote.

"Everybody wants me to close off absolutely the possibility of any election in 2012, which I won't do because you have to allow yourself some flexibility," he said. "But it is not my expectation."

Tom Urbaniak, a political science professor at Cape Breton University, said Dexter will use the throne speech to draw attention to the tax cut, the shrinking deficit and the shipbuilding contract.

"I have no doubt that signals must have been sent to Graham Steele saying this might be an election budget," Urbaniak said in an interview from Sydney.

The professor said there are other incentives for an early election, including the failure of the opposition parties to make a dent in the NDP's support.

"The Liberal Opposition has not gained a great deal of traction and has not presented a real alternative at this point," he said. "The Conservatives are still in a phase rebuilding from the very negative last election."

Federal budget will influence province's plans

The biggest wild card in the mix is the federal budget, which also will be tabled Thursday.

Prime Minister Stephen Harper's fiscal plan is expected to focus on austerity, with cuts expected to range between $4 billion and $8 billion above previously announced measures.

With about one third of Nova Scotia's revenue coming from federal transfers, aggressive budget cutting in Ottawa could throw off Steele's plans.

Dexter said he's confident the transfers won't be touched, but he said he's worried that cuts to the federal public service will have a disproportionate impact on Nova Scotia — the regional hub for the military and most federal programs.

On another fiscal front, Urbaniak said its unlikely the NDP will bow to public pressure to reverse its 2010 decision to increase the harmonized sales tax by two percentage points to 15 per cent.

"There will be no reduction in the HST because it would look terribly awkward," he said. "It would come across as an admission of bad public policy."

Steele has said he won't consider reducing the tax until the budget is balanced and a surplus is sustainable.

Modest tax cut is 'laughable', says opposition

Progressive Conservative Leader Jamie Baillie says his party will continue to hammer away at the NDP's decision to raise taxes.

"If it [the throne speech] is aimed at taking us to the polls at some future date, I'm certainly prepared to debate what they've done to our taxes," he said in an interview.

Baillie said the government has collected an extra $686 million in HST revenue since the tax was increased.

"That's why I think it's so laughable that they're going to try to bring in a modest tax cut to compare to that."

McNeil said the Liberal party plans to push Dexter to do something about rising electricity and gasoline prices in the upcoming session. The HST will also figure prominently, he said.

"The HST increase takes a million dollars a day out of the pockets of Nova Scotians," McNeil said. "Some token tax cut — pennies a day given back — is really not going to make a lot of difference to Nova Scotians."