Graham Steele: Beware of federal government bearing gifts

Canada Day fell on a Tuesday this year, which was an invitation to an extra-long weekend, and our provincial politicians have essentially taken the week off.

CBC's political analyst reflects on connections to Cape Breton

Peter Mackay speaks at the handover of the Canso Causeway Wednesday. (Joan Weeks/CBC)

Canada Day fell on a Tuesday this year, which was an invitation to take an extra-long weekend, and our provincial politicians have essentially taken the week off.

The House won’t sit again until late October. Legislative committees are on hiatus until September or October. Even the provincial cabinet, which runs the $10 billion behemoth that is our provincial government, isn’t meeting this week and will meet only every second week until September.

It’s pretty remarkable how much of the provincial political apparatus shuts down for the summer. There’s nothing new in this, of course. But watching provincial politics enter its regular summer slumber, you’d never guess we’d just had an economic development commission report (Ivany) whose theme is a sense of urgency.

Despite the slowdown, there were a couple of connected news items that caught my attention because of the broader issues they raise. 

Trains on Cape Breton Island

The first was the ongoing issue about what to do with the rail line on Cape Breton Island.

The line has been a money loser for years. Passenger traffic is a thing of the past. The line serves a handful of businesses in the Sydney area. It would take 10,000 annual car loads for the line to be profitable, and last year there were 500. Just 500! 

Why is a line getting five per cent of its needed break-even traffic still operating?

Simple: a provincial subsidy.

The province has been subsidizing the line’s operations for years, to the tune of many millions.

The argument in favour of a subsidy is that there are development possibilities just around the corner. More time is needed to develop the business. Cape Breton regional council held a special meeting last week to make this point, particularly emphasizing port development, which requires rail access. When a rail line is gone, it’s gone forever. So (the argument goes) let’s keep the subsidy flowing a little longer.

The problem is that this argument has been made for years, starting with the last Conservative government and carrying on through the NDP government. Better days are, still, just around the corner.

The argument against a subsidy is that the financial hole is only going to get deeper. The line is losing money on operations. More money, probably in the tens of millions, will be needed to cover capital requirements. And there’s no guarantee that the hoped-for better days will ever arrive.

The provincial transport minister, Geoff MacLellan, represents a Cape Breton constituency (Glace Bay), so he’s feeling the pressure. He says the line can’t continue as it is, but then he also says it’s a critical piece of infrastructure. I don’t know how he squares that circle.

Politically, the easiest thing is just to continue the subsidy, and find a new operator, so that’s what I expect will happen. No politician wants a repeat of the NDP’s ferry debacle.

Canso Causeway now property of Nova Scotia

The other related event was Wednesday’s announcement that the federal government is handing over ownership of the Canso Causeway to the provincial government. The railway runs over the causeway, of course, and CN was originally a key player in the causeway’s development.

The federal government is being smart about divesting itself of property and assets that it doesn’t want to run any more. The same thing has happened with harbours, wharves, and lighthouses, and the same pressures are put on the province to step in when the federal government is stepping out. 

The causeway announcement was pitched as good news, but I’m dubious. The feds are pitching in $9 million as a sweetener. That may sound like a lot of money for a cash-strapped provincial government, but it’s a pittance if there are any major or emergency repairs or refits that have to be done.

Federal transport minister Lisa Raitt — a Cape Breton native, though she has lived in Ontario for many years and represents a Toronto-area constituency — joked with Nova Scotia Transportation Minister Geoff​ MacLellan that all complaints about the causeway should now be directed to him. They both laughed, but she’s not kidding. Beware of the federal government bearing gifts. 

The feds are happy to be rid of the causeway. For the province, it’s one more thing for which they are financially and operationally responsible, forever. And forever is a long time.

About the Author

Graham Steele

Political analyst

Graham Steele is a former MLA who was elected four times as a New Democrat for the constituency of Halifax Fairview. He also served as finance minister. Steele is now a political analyst for CBC News.