by: David Jackson
As the provincial government’s controversial labour bill was wending its way into law in early December, Premier Darrell Dexter left the legislature and headed the couple of blocks to a waterfront hotel where he was to deliver the annual state-of-the-province address to a Halifax Chamber of Commerce luncheon.
After weeks of taking shots from the business community over first contract arbitration, including rare public rebukes from the likes of senior officials from Michelin and Sobeys, the premier didn’t say a word about the enabling legislation, Bill 102, in his speech.
When asked in a media scrum why he didn’t mention it, Dexter talked instead about unity.
“This is an audience that is looking for hope,” he said. “They are looking for the promotion of a harmonized economy, one that’s moving forward and, you know, we’re talking about the things that bring us together, not the things that divide us.”
Business people have often said that they want a more competitive tax regime, lower power costs, an efficient bureaucracy, leadership. Business leaders have often said they want a government that understands their challenges, recognizes their importance to the province, perhaps even appreciates them, and gives them a fair chance to make a go of it.
What are they getting from this premier and this government, in the first mandate the NDP has ever had in Nova Scotia?
Road builders don’t like the government’s return to the paving business. In-house wine brewing companies wonder why they’re targeted. But looking at the big picture, John Risley, the hard-nosed co-founder of Clearwater, says the NDP premier has “behaved reasonably responsibly” since coming to office in June 2009.
That assessment even includes first contract legislation, which allows third-party settlements of first collective agreements and which drew the ire of the business community in the fall. Clearwater was one of 20 major companies that formed the Nova Scotia Employers’ Roundtable to fight the legislation.
“That’s not something I’m going to jump up and down and say, ‘Oh, you know, you shouldn’t do this and this is catastrophic and we’re not going to invest any more money and, you know, blah, blah, blah.’ I think that’s silly,” Risley said in a recent interview from his Miami office.
Risley shrugs off the apparent inconsistency between his position and his company’s, saying he’s speaking as much personally as in his corporate role. He adds he’s certainly not an advocate of first contract legislation and would rather not see it in place.
“On the other hand, I think you can’t cry wolf too often and if the business community is going to be responsible, then it has to pick and choose those issues around which it wants to have a big fight.
“I think there are much more important issues over which we should — not fight, but encourage the government to be pursuing a more aggressive policy.”
Among these are real action on voracious health-care costs, an aggressive immigration policy to replenish and expand the skilled labour workforce and improvements to the education system, which he says is complacent and lacks focus.
Risley says the business community wants the same thing it seeks when hiring someone to run a company — leadership prepared to take on big issues. A company looking to expand or settle in Nova Scotia is concerned about where the province will be in five to 10 years, he says, and that doesn’t match up too well with the election cycle.
His examples of strong political leadership over the past 20 years include former Ontario premier Mike Harris’s Common Sense Revolution, the deficit reduction of the Chretien/Martin Liberal team in the 1990s and the current Harper/Flaherty combo.
“At the provincial level, I’m not sure we have that,” Risley says. “And again, I’m not laying the blame at Premier Dexter’s doorstep because I don’t think we have it, frankly, in many provinces across the country. In fact, I don’t know of any province in which we’ve got that sort of leadership, but that’s what the business community wants because the business community sees in that a direction: It sees stability; it sees a consistency.”
Dexter came to the premier’s office after 11 years as MLA, eight as the Opposition leader. Before that, he had a varied career: journalist, naval information officer and lawyer in a small Dartmouth firm. He says he quickly took an interest in how it was managed.
“People often don’t see law firms as businesses, but they certainly are,” he says in an interview in his office on the top floor of One Government Place in downtown Halifax.
“You learn really quickly (that) the first thing is pay employees, overhead and taxes, and if (there’s) anything left, then you get paid. So it’s a really good idea (that) you have a very firm grasp of what all those things are going to cost you.”
In the early 1990s, while at the law office, Dexter was also a member and head of the Downtown Dartmouth Development Corp. He says he learned that achieving goals requires careful long-term planning.
“People talk about economic development as if it’s a magic wand and it’s not. It’s about well-thought-out policy decisions over a period of time,” he says.
Having a premier with some experience in business is a plus, since the government has so much impact on small business, says Leanne Hachey, Atlantic vice-president of the Canadian Federation of Independent Business.
But she says Dexter needs to do more about two major issues facing her 5,000 members in Nova Scotia: taxes and red tape.
Despite the NDP’s half-percentage-point cuts to the small-business tax rate in consecutive years, bringing it to four per cent, Hachey says the province’s overall tax regime, from personal income tax, to sales and motive fuel taxes, to workers’ compensation premiums, is among the least attractive in the country.
“We do not expect taxes to be reduced significantly over the short term,” says Hachey. “What we’re asking for is a plan so that small-business owners have some hope that things are going to get better.”
Dexter counters that he wants a competitive province but points out that Nova Scotia is a low-cost jurisdiction overall, which is how it’s able to attract financial services companies from places like Bermuda and New York.
He also notes the reduction in the small-business tax rate, continuing the phase-out — started under a previous Tory government — of the capital tax on large corporations, and the break in the 2010 re-jigging of tax brackets for people making more than $83,000, which affects senior managers.
Charles Cirtwill, president of the Atlantic Institute for Market Studies, agrees with Hachey that the province needs a long-term plan to get more competitive, tax-wise, but he points out that the province’s relatively high tax burden predates Dexter’s government.
“I have to say, in all fairness to the government, for the most part it’s been business as usual,” he says. “That being said, I don’t necessarily think that’s a good thing for average Nova Scotians.”
Cirtwill and Hachey both give Dexter credit for taking what they call the long-overdue step of getting control of government spending.
Tucked in the maze of streets in Dartmouth’s Burnside Park is the corporate headquarters of Acadian Seaplants Ltd., the thriving seaweed product business with several sites in the Maritimes and an office in Maine.
Acadian Seaplants is part of the employers’ roundtable. But company president Jean-Paul Deveau also sits on the Premier’s Council on the Economy, a 21-member cross-section of Nova Scotia’s business, labour, academic and voluntary sectors. (Deveau and Risley were also named to former Tory premier Rodney MacDonald’s economic advisory panel, which didn’t include labour representatives.)
In an interview at head office, Deveau says he stands by the roundtable’s criticism of Bill 102, asserting that it doesn’t encourage investment.
“Business wants to be comfortable when they’re sitting there and making decisions about hiring people, making investments and so on and so forth, especially when they have alternatives,” he says.
Deveau, who has won recognition as an entrepreneur and whose company shows up on best-managed lists, first met Dexter while he was Opposition leader but spoke with him often in the run-up to the 2011 Canada Winter Games, for which Deveau served as chairman of the host society.
“He understands very clearly the role of industry in building an economy,” says Deveau, adding that provides the base on which government is able to provide services. “That’s something that to me, I’m very pleased with.”
Deveau says Dexter has acted on that understanding. Glasses halfway down his nose, finger tapping the table for emphasis, Deveau cites a 20 per cent capital investment incentive, which evolved from a 10 per cent manufacturing and processing tax credit, as well as incentives for workforce training.
He also notes the new government could have changed course on the phase-out of the capital tax on large corporations, but didn’t. The tax will disappear in July.
Dave Harris, the 68-year-old president of his family-run R&D Excavating Ltd. in Yarmouth, wrote a letter opposing first contract legislation but says he hasn’t really seen Dexter tilting toward organized labour.
Not that he’s favouring business, either, says Harris. At least not in the Yarmouth area, hit hard by the cancellation of the multimillion-dollar subsidy to Bay Ferries Ltd.’s Cat ferry, which ran between Yarmouth and Maine until 2009.
“You know, it wasn’t a bad thing because that ferry wasn’t the right ferry for us,” says Harris, who has a couple of other businesses and about 35 employees in all.
“We’ve suffered a bit for it, but we’ll get over that. But all of that being said, there needs to be a whole lot more effort in doing something different down here.”
Harris, the chairman of the national Community Futures Network, an association of federal community development corporations, says he hasn’t been impressed overall with Dexter’s efforts in his region. “He’s basically paid attention, to my mind, to where his votes are. And his votes are in Halifax and wherever.”
Some in the area also wonder why the Cat was killed while millions in operating and maintenance cash continues to pour into Rail America’s Cape Breton and Central Nova Scotia Railway.
But the Sydney Chamber of Commerce’s interim president, Joyce MacDougall, says the assistance is needed to support future development. She cited the possible re-start of the Donkin coal mine and the port business that could result from the dredging of Sydney Harbour, to which the province contributed $15 million.
She says the chamber gets a good airing of its views with Dexter and his government, whose deputy premier is nearby Cape Breton Centre MLA Frank Corbett.
“There’s a respectful working relationship,” she says. “There will be issues — there have been issues — where we don’t see eye to eye. But we’ve got to keep going and recognize where each is coming from.”
MacDougall says Dexter’s meetings with the chamber while in opposition helped ease concerns about the NDP coming to power in 2009.
For his part, AIMS’s Cirtwill says he thinks Dexter has turned out to be about what people expected.
“He’s a little bit more inclined to listen to the unions and act on their advice than other premiers have been but, you know, he’s still the premier for the entire province; he still cuts big honkin’ cheques to various large multinational corporations,” he says.
“I guess I’m hard-pressed to say that he’s less business-friendly than his associates. … I think if companies invest in this province, I think they know what they get from this government. I think they know what the business environment is. Is it ideal compared to other provinces? Probably not, but it’s certainly not a place where the risks are unknown.”
Cirtwill noted Dexter’s heavy involvement in rallying the province around the Irvings’ successful bid for the $25-billion shipbuilding contract, as well as putting millions in taxpayers’ money into play to help ailing NewPage Port Hawkesbury in Cape Breton and Bowater Mersey Paper Co. in Brooklyn, Queens County.
“You can’t throw $90 million at Bowater and not be considered a friend of at least one company,” he says, referring to the package announced in December. The commitment was for $50 million, but it could grow to $90 million if the province exercises an option to buy more land from the company.
Hachey says she’s a little concerned that Nova Scotia Federation of Labour president Rick Clarke’s name pops up frequently on government advisory committees; for example, the labour-management review committee, which was established in 2010 to consider changes to labour legislation. (Non-unionized private sector businesses have said it is unfair to keep them off the committee, since its recommendations could affect their companies.)
Clarke co-chairs that committee, as well as the Premier’s Council on the Economy (on which Deveau also sits). He’s also on the occupational health and safety advisory committee and the minimum wage review committee (appointed to that one by a previous Tory government).
Hachey questions whether organized labour, representing less than 20 per cent of the private sector, has too much influence on government.
“I’m certainly not saying unionized labour shouldn’t be part of the discussion. I’m saying their seat — and all seats — at the table should be reflective of one’s presence in the economy and in workplaces. And it’s not. And yes, it does raise red flags. How could it not?” says Hachey.
Risley and Cirtwill don’t share Hachey’s view. Risley said he expects Dexter to seek advice from many quarters and make balanced decisions, while Cirtwill says previous premiers have had close associates.
“In this instance, it’s just someone who we’re not necessarily used to seeing in that role,” says Cirtwill.
Dexter has said he’s not planning any big changes to labour legislation in the rest of his mandate, while some say he really hasn’t made any.
That’s disappointing to some, like Larry Haiven, an associate management professor at Saint Mary’s University. Haiven, who has studied NDP governments in other provinces, and their labour laws, says the one here is the most unambitious he’s seen.
He thinks part of the problem is that unions haven’t been aggressive and the government wants to be careful in its first stint in power.
“They can’t be seen as being pro-labour or anti-employer, and the ironic thing is they got attacked anyway, as modest as they are,” says Haiven, whose article on recommended labour standards changes, for the Canadian Centre for Policy Alternatives, is to appear in a few weeks.
Dexter says his plan is to be deliberate and thoughtful as he goes about the province’s business.
“It’s really important that you understand the critical path that you’re on and you understand all of the factors that are at play, and everything that you do in this office has maybe a myriad of effects outside of it, some of which you can anticipate, many of which you will not,” he says.
“Everybody’s definition of bold is different. Everybody’s definition of courageous is different. But you know, I have seen so many bold and courageous governments go down to rapid defeat. … We need to have a deliberate, well-thought-out plan for what it is that we do, lest we affect the lives of a lot of people who wouldn’t see it coming.”