Tristan Cleveland is an urban planner who has also worked in Montreal, Guyana and Venezuela. Cleveland grew up in the south shore of Nova Scotia and has been an advocate for sustainable planning in Halifax since 2012.
Selling off bits of Service Nova Scotia isn't about good governance, it's about making the books look good
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So, let me see if I understand this correctly.
Service Nova Scotia’s Registry of Motor Vehicles takes in $120 million a year to register vehicles, peddle license plates, test drivers, etc. The agency costs $30 million to $35 million a year to operate, meaning it nets the provincial treasury between $85 million and $90 million a year.
But the registry’s technology needs upgrading — to the tune of $30 million.
So, instead of borrowing to do that and amortizing the cost over a period of years, as governments usually do, Service Nova Scotia Minister Mark Furey mused last week about shopping the services — along with those provided by provincial land and stock registries — to the private sector.
He’s more than musing.
Last year, his government quietly hired consultants Ernest & Young to look into whether outsourcing — government-speak for privatizing — these functions makes sense. Furey has its report, but he won’t tell you what it says, or let you read it, because that could compromise the government’s negotiating position with potential private-sector partners.
Uh… just musing?
Despite what Furey claims — privatizing would allow for “significant cost avoidance” and allow the government to focus on providing “core services” — this isn’t about delivering better service, providing service more efficiently or even saving the government money in the long run.
It is about making the books look good, and eliminating as many public sector workers as possible before the next provincial election.
When the Manitoba government did what the Nova Scotia government is poised to do, its private sector partner absorbed the cost of the upgrade, paid the government a $75-million signing bonus and promised to pay annual royalties of $11 million, rising to $24 million by the end of the 30-year deal.
The other option would be to upgrade through the public sector and pay off the cost in installments. Let’s do the math: Nova Scotia could borrow $40 million at today’s low interest rates, and pay the cost off over time and continue to net close to $85 million or $90 million annually instead of, well — tops — $24 million.
Makes sense economically.
But borrowing would add to the appearance of provincial debt (bad) while the $75-million private-sector signing bonus could help government magicians make the deficit appear to disappear in the lead-up to a provincial election (very good).
Makes sense politically.
Guess which option will win out in the end?
Stephen Kimber is a professor of journalism at the University of King’s College in Halifax and an award-winning writer, editor and broadcaster.