Address by the Honourable John F. Hamm, MD, MLA
Premier of Nova Scotia
Atlantic Provinces Economic Council
November 21, 2001

Good morning ladies and gentlemen. I am very pleased to be here with you today for Outlook 2001 presented by the Atlantic Provinces Economic Council.

As Premier of Nova Scotia let me say that these sessions are extremely helpful to the Government. They allow us to see what lies ahead just down the road, not just for Nova Scotia or the Atlantic region, but for Canada and the world.

Through your work, government is able to plan better and set future directions. And we are given that all-important "heads-up" on new and emerging trends in business and industry.

Since becoming Premier it seems that I have found myself increasingly pre-occupied with what the future holds for Nova Scotia and this region. If only forecasting future trends and events were as easy as looking into a crystal ball, or reading some tea leaves... Certainly my job would be a lot easier!

Of course, its not that simple, which is why I have such respect for the research that is conducted by APEC and other think-tanks across the country.

Before we move into the formal program, I would like to take a few moments to share my thoughts about the future — both the bright spots and the challenges which loom on the horizon for the province and the region.

There is no doubt Nova Scotia is benefitting from strong economic growth both nationally and in the US. Nova Scotia's real GDP growth is expected to hit 2.4% for this year — 0.6 percentage points higher than we forecast in our February budget.

This solid performance translated into a 15.4% increase in international merchandise exports during the first five months of the year, and we now estimate that the total value of exports of goods and services will grow by 9.3%.

Strong economic performance means jobs for Nova Scotians. By July, employment had grown across the province by 3.1%, and the number of people actively seeking work was also up during this same period. The unemployment rate averaged 8.9% during the first seven months of 2000.

Given strong employment growth, we expect the average unemployment rate forecast for this year to come in at about 8.7%.

The economic indicators are good because I believe Nova Scotians are optimistic about the future. And that optimism is being driven by important new industries, such as the oil and gas sector.

Only a couple of weeks ago the Canada-Nova Scotia Offshore Petroleum Board announced nearly $200 million in new offshore exploration commitments — bringing the total commitments to just over $1 BILLION.

And yet, for all of this good economic news, we continue to face monumental challenges well into the future.

In spite of the fact that Nova Scotians can boast the highest level of educational attainment in Canada — compared to the rest of Canada, Nova Scotia has some very sobering social indicators:

• the second lowest rate of full time employment;
• average incomes are 85% of the national average;
• within the province itself there are high income inequities;
• child poverty rates are high;
• and employment uncertainty also remains high.

In these areas, Nova Scotia has been steadily losing ground.

There is no doubt that our economy is hobbled by our fiscal problems. But our provincial debt and deficit is not entirely to blame.

This province and its people are falling behind the rest of Canada due to unfairness in Equalization, CHST, and offshore royalties.

The 1986 Offshore Accord promised Nova Scotia would be the principle beneficiary of offshore — instead, Ottawa is reaping the majority of the benefits. We must work to introduce greater fairness in the distribution of royalties. Ottawa must keep its promise.

The CHST is another example of a federal program that is out of step with the needs of Nova Scotia.

Our population is aging which translates into greater demands on our health care system, and yet the CHST is not structured in a way that can deal with this reality.

Finally, equalization is another example of unfairness. Equalization is not a welfare program for poor provinces. It is a program enshrined in the Constitution whose intent is to promote equal opportunities for all Canadians. It provides for essential, quality public services at reasonable tax levels.

It is no secret that there are service and taxation disparities across Canada. If these disparities are allowed to grow, the competitiveness of this region will further decline.

Future economic growth and development in this region is at stake which is why I need the support of the business community for a better equalization deal.

I also need the support of the business community for one of the important elements of our economic growth strategy — safe, reliable transportation infrastructure.

With over 40 per cent of what we produce in Nova Scotia sold to customers in other places, ensuring a sound transportation network is essential to future prosperity.

Yesterday, I had the opportunity to present Nova Scotia's case before the federal government's panel charged with reviewing the Canadian Transportation Act.

I reiterated my call over the last several years — predating my becoming premier — for federal action to ensure our ports can compete with US ports along the eastern seaboard.

I urged the federal government to redirect a portion of its major airport revenues to smaller local airports — such as Sydney and Yarmouth — so that we don't lose this important part of our air transportation network.

Perhaps most important of all, I reiterated the most oft-repeated demand of my government related to transportation — a long-term, cost-shared national highways program.

Canada has the dubious distinction of being the only G7 country without such a program. While the United States, our largest single trading partner, has dedicated over $300 billion Canadian to its highway system — Canada's national government has committed $600 million over four years, starting in the year 2002.

That means that for every dollar Ottawa collects in federal fuel tax from Nova Scotia motorists, it will be returning about four cents for highway construction.

On more than a dozen occasions, my Transportation Minister and I have publicly raised the need for a national highways program. We have also done so in various private meetings — for this issue has not only economic costs, but human costs, when one factors in our number one highway priority — Highway 101.

I ask for your support to remind Ottawa that it has a responsibility to be a player in transportation policy. We can't succeed in a global economy without all the necessary means to get our goods to market.

As you spend this morning focused on the future, I ask you to keep in mind both the bright spots and the challenges that lie ahead.

For there is no doubt in my mind that if we — government and the business community — can work together, we can capture the optimism and meet the difficult challenges head-on.

Thank you.