How to spend Halifax’s economy into gear

There’s plenty of work that needs doing in Halifax, and
plenty of people ready to do it, says Halifax MP Megan Leslie. And the
federal government should put those people to work as part of an
overall economic stimulus package.

Leslie takes me on a four-hour tour of her district to demonstrate
the kinds of “at-the-ready” infrastructure projects that, if funded,
would almost immediately employ thousands of workers, giving a
tremendous boost to the local economy.

We visit empty lots where affordable housing projects can be built,
shipyard workers anticipating contracts for new naval vessels,
childcare providers making the economic and employment case for meeting
unmet daycare needs, a university president with a wish list for
improved building maintenance and a fish processor who explains that he
can’t sell all the fish he can catch for lack of a marketing
campaign.

Along the way we discuss still other employment opportunities, like
an expanded energy efficiency retrofit program for low-income
homeowners. And we talk about the underlying philosophy of what should
be in the stimulus package that prime minister Stephen Harper will
deliver to parliament Wednesday.

“What I’m worried about is he’ll bring just tax cuts, and not [a
stimulus package] that gives us the biggest bang for our buck,” says
Leslie. “And I think that’s symptomatic of an ideology that says
government is bad.”

The problem with tax cuts, she conti-nues, is they’re not the best
way to boost the economy.

“Tax cuts work because we’re going to have more money in our pocket,
and we’re going to spend more, in theory, and that means there’s going
to be more of a demand for goods, so we have to produce more
goods—everybody wins, right? But a billion dollars in tax cuts works
out to about $720 million in increased GDP and about 7,000 jobs.

The same billion dollars invested in infrastructure results in $1.78
billion in GDP, and 18,000 jobs,” she says, citing a report issued by
the economic forecasting firm Infometrica.

Moreover, there’s fear that we are about to enter a deflationary
period, where people delay purchases in anticipation of lower prices in
the future, a mentality that becomes reinforced as prices actually
drop: A consumer thinks, “Hey, the price of a car dropped a thousand
dollars last month; maybe it’ll drop a thousand more next month.” And
when people put off purchasing decisions, the industrial machine
falters. Nobel prize-winning economist Paul Krugman recently wrote in
the New York Times that such a downward spiral “looks an awful
lot like the beginning of a second Great Depression.”

“One problem with tax cuts is there’s no guarantee people will
spend,” agrees Leslie. “Or, they’ll go to Bermuda.”

An infrastructure-based stimulus package, however, can be directed
into specific local projects that bring the biggest return for the
overall economy, counteracting deflationary pressures. Krugman calls
for “large scale deficit spending by the government,” a sentiment
echoed by the World Bank, which suggests that national governments need
to spend at least two percent of their Gross National Product to lift
the global economy out of recession.

“Two percent in Canada is between $30 and $40 billion dollars,” says
Leslie, and she’d like to see that come entirely from deficit spending,
and all of it this year. The Harper government is reportedly
considering a $30 billion stimulus plan, but it’s as yet unknown if
that figure is for multiple years or if it includes tax cuts.

How, exactly, could some of that money be spent in Halifax? Our
first stop is to an affordable housing project on Creighton Street by
Creighton/Gerrish Development, an agency founded by Dalhousie prof
Grant Wanzel. The first three stages of the development, 36 units, have
been completed and occupied.

“Several of the home buyers actually lived in social housing, and
moved from social housing into home ownership,” says Wanzel. The
program targets people with a lifetime connection to the neighbourhood,
and some of the new homeowners have a family income as low as $30,000.
The new homeowners build equity, and that becomes the foundation of
wealth and therefore fuels the broader economy.

Wanzel has complete plans and city approval to build the last stage
of the project—48 condo units at the former Sobeys lot on Gottingen
Street—but doesn’t have the last half-million dollars to bring the
project to fruition. He praises the province and city for the help he’s
received so far, but says it may be a while before it can come
together.

“I would not want to wait another six or eight months for the
affordable housing program to come down, but if we have to do that, we
have to do it.”

But if the project was funded by the stimulus package, work could
start as soon as Wanzel can line up buyers. “That’s contractors and
carpenters, working right away,” says Leslie.

From there, we go to the Halifax Shipyard and speak with Karl
Risser, union president at the yard.

There are unfunded plans for two “joint supply” naval ships, four
Arctic patrol vessels and 12 smaller coastal patrol vessels, says
Risser. “All we have to do is get that work on the ground. We start
building ships, all of a sudden we can say to our workers, ‘We’re not
going to employ you for three months, lay you off for a month, employ
you for three months, lay you off for a month.'”

Many of the laid-off went to find temporary work in Alberta to hold
them over the lean times, but that work too has dried up. Presently,
there are 400 to 500 people employed at the yard, but contracts for
just two Arctic Patrol vessels would bring the yard to full capacity,
with 1,000 workers, says Risser.

At Saint Mary’s University, we meet with president Colin Dodds, who
shows us around the McNally building. Dodds explains that there is more
than $23 million worth of deferred maintenance on the
building—projects on the books but unfunded. Were the money
available, that work could start immediately, employing contractors and
construction tradespeople, and better positioning the university for
recruitment of students.

We also stop at the YWCA childcare centre on Barrington and talk
with Tanis Crosby, the executive director. “Less than 11 percent of
children under the age of 12 in this province have access to licensed
childcare, and 74 percent of women are in the workforce,” she says. “So
how do you put an economy to work when the mothers can’t?”

The Liberal-NDP coalition accord contained a commitment to
short-term funding for childcare, says Leslie. It didn’t spell out
long-term commitments, but would have helped with one-time funding for
new buildings.

Lastly, we stop at Sambro Fisheries, where Manager Donnie Hart
discusses the many challenges of running the operation, especially
after the ground fisheries collapsed in the early ’90s. There’s no easy
solution, says Hart, but a well-funded marketing campaign pushing
locally sourced fish would go a long way toward propping up prices.

Leslie won’t make predictions about what Harper will bring in the
budget Wednesday, but it’s clear she’d like more on-the-ground spending
than has been offered so far. “We can put Halifax to work,” she says.

This article appears in Jan 22-28, 2009.