10.
Resigning as the
Minister of Finance
When you’re in politics, you’re supposed to want to be in Cabinet. Politicians put up with a lot in order to be considered for Cabinet. And yet on May 30, 2012, I resigned as finance minister. Nobody forced me out. Darrell asked me to stay, twice. But I left. I gave an explanation at the time, but many people thought there had to be another explanation. Somebody like me isn’t supposed to just walk away.
Everything I said on the day I resigned was true. But yes, there was more.
Like most things in politics, the reasons were complex. There wasn’t just one reason. There was a long list of reasons. I gave some of them on the day I resigned, but there were others. In particular, there was the last straw about which I have not spoken publicly until now.
If the primary motivation of every politician is to be re-elected — and it is — then thoughts of the next election are never far from the politician’s mind.
In my first three elections — 2001, 2003, 2006 — there was never any question about whether I would be a candidate, so my thoughts were all about the details of the campaign. By 2009, I had gotten to the point of thinking about my exit from politics. I told my wife that, if we didn’t win this time, it would be my last term. By the spring of 2012, I was again thinking about my political future. You might think it was an easy decision, now that we were finally in government, but it wasn’t.
On the plus side, I was in the legislature, I was a Cabinet minister, I had a prominent role in the Dexter government. The job took me places and allowed me to do things that no other job could.
But I had plenty of doubts.
I had disdained professional politicians when I got into politics. I desperately didn’t want to be one myself, but I knew I was almost there. One more election, and my chances of ever doing anything else were slim. There was already little chance of returning to law. I hadn’t practiced full-time for fifteen years, and the law had changed under my feet. No law firm is interested in hiring someone with rusty skills and no clients. And it’s precisely at this point — when the politician has no viable career alternatives other than staying in politics — that politicians become truly dangerous. If I were going to get out, it had to be soon.
Here’s the problem: the skills and experience you gain as an MLA prepare you for nothing.
If you’re a Cabinet minister, most of the real work — the work that has value in the job market — is done by civil servants. If you’re an MLA, most of your time is spent doing constituency work — which has no value in the job market. If you can’t go back to exactly what you were doing before, what do you have to offer? That’s why so many ex-MLAs, including Cabinet ministers and premiers, struggle to find work after they resign, retire from politics, or get voted out.
I also had to be frank about the possibility we would lose the election. After you’ve been a Cabinet minister, the thought of going to the opposition benches is unbearable. I didn’t want to be one of those politicians who ran, and won, and then resigned shortly afterwards just because they ended up on the opposition side. I had watched a number of others do it — the most memorable being Don Cameron in 1993, when he announced to his supporters, and the provincial television audience, that he was resigning the seat he’d won only minutes before — and it wasn’t something to admire. If I wasn’t prepared to serve a full term, no matter the outcome, I shouldn’t re-offer.
I was no longer enjoying the constituency work. Given the centrality of constituency work to an MLA’s life, that’s a big confession. At the start, I had gotten a real charge out of solving someone’s problem. Now, my assistant Cath Joudrey was doing most of the casework anyway, since I was a Cabinet minister and had less time to spend in the constituency office. The cases that came to me were the most intractable ones, and it had been a long time since I’d scored a satisfying win.
Then there were the usual stresses and strains of being in office. The Dexter government was unpopular, and it showed in every interaction we had. When a government is on the ropes, the tone changes — the tone of conversations and correspondence from the public, the tone of the opposition, the tone of news reports. I had watched it happen to other governments, and now it was happening to us. I was swimming in a sea of negativity, and it was wearing me down.
My health was getting worse. It was nothing specific, only the predictable result of failing to exercise and eat and sleep properly. When I looked around the Cabinet table, I saw — with the exception of Ross Landry, who always took his fitness seriously — a bunch of people who did not look well. I was sitting beside Paul MacEwan in 2002 when he suffered a brain aneurysm in the House. He was never the same again. I watched Eileen O’Connell and Michael Baker get sick and die in office. It’s not worth being a politician if you have to trade it for your health.
So I was already in a bit of a funk when the House reconvened for the spring 2012 sitting. Two things happened in that spring sitting that tipped me over the edge.
The first was a simple question in question period. The question wasn’t directed at me, and there was nothing unusual about it. I’ve looked through Hansard and can’t pinpoint the exact day or the exact question. There are several possibilities. The point was the feeling it triggered in me, rather than the question itself. To understand the feeling, I have to give some background.
Electricity rates were always a significant issue during my time in the legislature. When we were in opposition, we hit on the idea of taking the provincial portion of the HST off home heat. This was a pocketbook issue that resonated with anyone who paid a power bill. The Conservatives first resisted, then took the tax off, then put it back on. It was easy for us to promise, in the 2009 election, that we would take the tax off and keep it off.
We didn’t get much credit for taking the tax off electricity bills. There was general discontent over the fact that we’d increased the HST. Besides, any savings for ratepayers was quickly swallowed up by a series of rate increases that took power bills higher than they’d ever been. People were upset. Naturally the opposition parties blamed the government for these increases, and it was frequently raised in the legislature.
Sitting on the government side, I knew that the government’s influence on Nova Scotia Power was a lot weaker than the opposition wanted the public to believe. It is, after all, a private company, regulated by an arm’s-length tribunal, the Utility and Review Board, over which the government had zero day-to-day control.
More importantly, power rates are, at bottom, a simple process of adding up the cost of producing power and then dividing it fairly among the users. Of course there are plenty of technical details about how exactly to calculate the cost of power and how precisely to divide it up fairly. But the basic idea is adding up the cost and dividing it among the users. There are no magic answers.
The real issue with Nova Scotia’s power rates is that most of our power production comes from particular kinds of fossil fuels. The price of those fuels is set on the international market, and so if we’re going to have power, we have to pay that price. The challenge is to find a way to transfer our energy production from expensive and polluting fossil fuels to clean, stable sources. There is no magic answer here either. Wrong decisions are paid for over decades. Careless interference can be punished with rising rates, even brownouts and blackouts.
But in the legislature, you’d never know it. If you listen to the opposition, you would think that everything that happens on power rates is the fault of the government of the day — it isn’t — and that there are simple solutions that will quickly bring down power rates — there aren’t. The real issues are hard, but we hadn’t acknowledged that when we were in opposition, and our opposition wasn’t acknowledging it now.
I distinctly remember sitting in the House one day, watching Stephen McNeil ask about power rates during question period, and I was struck by how very much he sounded like Darrell Dexter when Darrell was on the other side of the House. Stephen was using the same words, the same tactics, and the same arguments that Darrell had used. And Darrell was giving the same replies that the Conservatives had given to him when he was the one posing the questions.
It struck me then, forcefully, that there was hardly any point to who sat in my chair or who was on which side of the House. None of us was dealing with the real issues. There was no fundamental difference between us. We were playing out a political charade, where our actions and reactions were dictated by our roles. I looked around the chamber, as if I were seeing it for the first time, and finally understood the futility of partisan politics.
Why accept a deterioration in my physical health, and the stress, and the time away from family, when it really made no difference whether I was there or not? The political charade, in which I had been a full participant for fourteen years, could carry on without me. That was my moment of revelation.
And then came the last straw.
The largest single expenditure of the government, by far, is the cost of people — wages, benefits, pensions. The provincial budget will stand or fall on how well it manages its people costs.
In the spring of 2012, we were on a collision course with the NSGEU. They had accepted, quickly and quietly, the first two years of 1 percent wage settlements, but now those agreements were coming to an end. Because the first settlement would establish a pattern for everyone else, they were very careful about which unit would go to the bargaining table first. We seemed curiously unable to match them strategically. We were dancing with people who knew all the moves, and we seemed compelled to follow their lead. The NSGEU chose Local 42, the health care bargaining unit in the Capital District Health Authority.
Let’s be clear about why the NSGEU led with Local 42: That local would, if it went on strike, have the greatest and fastest impact on the greatest number of sick people. The thought process behind the union’s choice disturbed me then and disturbs me now, but this is what passes for normal in public-sector collective bargaining.
On March 19th, Local 42 voted in favour of strike action. The CDHA put a strike plan in place. As the clock wound down toward the strike deadline, the CDHA had to cancel appointments and surgeries and emptied its large hospitals. The workers were still going to work, but there was less and less for them to do. Effectively, the bargaining unit was on strike, but they were going to work and being paid. In only a couple of days, hundreds or even thousands of sick Nova Scotians, and their families, were adversely affected.
Although there had been plenty of collective bargaining during our time in office, my involvement had been limited to what came before the Treasury Board. The heavy lifting was generally done by Shawn Fuller and Matt Hebb from the Premier’s Office, and by Gordon Maclean from the Public Service Commission.
For reasons that were never explained to me, I was included in all the strategy calls on the NSGEU Local 42 negotiations. I had never been included at this level before. Over the course of about two weeks, I participated in at least half a dozen calls. The participants were me, Frank Corbett, Dan O’Connor, Shawn Fuller, Matt Hebb, and Gordon Maclean, and sometimes Rick Anderson from the Department of Health. So I had a ringside seat as events unfolded.
Early on, it was apparent that the union wasn’t interested in a real deal. Their starting position for a three-year settlement was 5.1 percent plus inflation. A 5.1 percent wage demand, in the midst of an economic recession and stagnant public revenue, is not a serious proposal. Two additional years of inflation indexing had the potential to put the total settlement over 10 percent.
One of our first requests to the NSGEU was for them to give a definite number for the second and third year. The numbers that came back were large. I don’t remember exactly what they were, but they were both over 3 percent. Inflation had been 3.8 percent in 2011, due to a big bump in food and energy prices, and that was all the justification the NSGEU needed. As finance minister I knew that big number would probably not be repeated — and as a matter of fact, subsequent inflation has been very low.
As the strike deadline loomed, and with the NSGEU intransigent in its demands, we prepared to introduce legislation to forestall the strike. On the day the legislation was to be introduced, Darrell met with our caucus. He was at his best. He was determined and articulate. With one exception — Howard Epstein — the caucus was united behind him. The caucus understood that legislative action was needed, and they were ready. Even Howard was willing to absent himself from the House rather than vote against the bill.
As I was leaving the caucus meeting through the back door, Shawn stopped me. He asked what I thought of a proposal that would include arbitration, with the employer’s offer as a floor and the union’s offer as a ceiling. The proposal also included several sweeteners.
The same proposal had been floated before, on our phone calls, and rejected. There was nothing new. I told Shawn, firmly, that I did not agree with the proposal. I reminded him that, throughout the process, I had been concerned about keeping the employer’s offer on an all-in basis. The Treasury Board had approved a net offer of 2.0 percent–2.0 percent–2.9 percent. I told him that I was already concerned about whether the public would support this offer, which I considered to be generous and which would stretch the public’s ability to pay. I doubted the public would support an offer where the floor was higher and an arbitration award might take it higher still.
When I left the building, I believed that things would unfold as Darrell had laid them out at the caucus meeting. Halfway through question period, the premier would invite the two opposition leaders to his office and show them the legislation that would be introduced. If the opposition leaders agreed, the bill could be introduced and passed that afternoon. Even if there was a delay, it wouldn’t be for more than a couple of weeks, and the impact of the strike would lie firmly on the head of the opposition leader causing the delay.
I sat in the House and watched the plan unfold. Darrell did leave halfway through question period. Shortly afterwards, the two opposition leaders left.
Meanwhile, I was emailing with my wife about picking our son up from school. I was worried that I might not be able to get my car out of the Province House parking lot if the NSGEU descended on the legislature en masse. Although walking from school to the legislature was one of our pickup options, I suggested that he not come down to Province House. I didn’t want my son walking into a crowd of angry union members.
We were ready. I was ready.
I stepped into the back room. I asked Frank Corbett, who had been over to the Premier’s Office, what was happening. He said, “There’s another proposal on the table.” It was exactly the same proposal that Shawn had floated to me on my way out of the caucus meeting. It had been rejected on our phone calls. I had specifically rejected it, again, after the caucus meeting. And here it was, back on the table, except this time it was at the premier’s table.
I knew what this meant. Darrell’s staff had kept working on him after the caucus meeting, and they’d persuaded him that this alternative proposal would get the deal. There had been no consultation with the Treasury Board. There had been no consultation with the caucus about why the game plan had changed, even though Darrell had left the caucus meeting with strong support for the legislative option. The boys in the Premier’s Office had gone to work on Darrell, and they didn’t care what anybody else thought. Once the offer was made to the union, it couldn’t be pulled back. And the premier had told his boys to make the offer.
I walked into the House. When I sat down, I turned to Maureen MacDonald and said, “They’ve just thrown in the towel.”
At this point, I knew my time in Cabinet was over. All that was left was to work out the details.
The tentative settlement with Local 42 happened on April 25, 2012. That was a Wednesday. (It was confirmed, after a union vote, two days later.)
I thought about it and thought about it for the rest of the week and over the weekend. Resigning from Cabinet is not something to be done lightly.
The problem was that the deal would put financial handcuffs on the government for years. There was no principled way to make one settlement with Local 42 and a different, lower settlement with other bargaining units.
The strains of governing in a recession were made bearable only by looking ahead to the payoff. This settlement meant there would be no payoff. All those hours spent in Treasury Board in the windowless, soulless Cabinet room were for nothing. The savings, and then some, were being handed over to public sector unions. I looked ahead and saw nothing that wasn’t bleak. It didn’t matter which party was in government. It didn’t matter who was in the finance minister’s chair. I couldn’t stay.
The following Monday, I asked to speak with Darrell when I saw him at Province House, and we walked downstairs to a small meeting room. I told him I was going to resign as finance minister. I also told him that I thought Maureen would resign too. She and I had gone as far as talking about holding a joint news conference later that week. The first words out of his mouth were “This is going to kill us.” I told him that my mind was absolutely made up. There was no chance of my staying on.
When he left, evidently to go across the street to his office, he must have spoken with at least some of his staff. Very shortly afterwards, Shawn asked to speak with me. I went with him down to the same room where I’d spoken with Darrell. He said that if I agreed to stay, he would resign instead. I told him that didn’t make sense. I had decided to leave because I no longer believed in the government’s fiscal plan. Having him leave would only make things worse. It wasn’t a trade.
By coincidence, on the very same day that I told Darrell I was going to resign, I was scheduled to make my second-reading speech on the Financial Measures Act, which is part of the budget. I slashed the portions of the prepared text dealing with my confidence in the province’s finances. I no longer believed it, so I couldn’t say it.
Over the weekend I had written a script for my resignation announcement. I intended to deliver it that Thursday or maybe Friday. Meanwhile, though, Maureen was backing away from her own resignation. She seemed to feel too compromised to stay as health minister, and when she saw that I was determined to resign as finance minister, I think she saw an opportunity to get out of the Department of Health but stay in Cabinet. Her reasons for staying are for her to share, not me, but they did affect my own decision about how to resign. I decided an immediate resignation would do more harm than good, and it was never my intention to harm the Dexter government. The script I had written was never delivered.2
In order to minimize the damage, I agreed to stay on until the end of the legislative sitting. The next several weeks were painful. I knew I was leaving, but few others did. It was hard for me to work on issues with more than a short-term impact, because the thought in my head was This will have to wait for the new minister. I told my executive assistant, the deputy minister, the chair and CEO of the Nova Scotia Liquor Corporation, and the CEO of the Nova Scotia Pension Agency, but that’s all.
Mentally I was already gone, but still I hung on until Darrell was ready. The House finished on May 17th. I called Dan O’Connor one day, around that time, and told him how difficult it was for me to continue and that I just wanted to get it over with. At this point he mentioned that Bill Estabrooks would be stepping down as well. Bill, who had let it be known the previous year that he was suffering from Parkinson’s, had received medical advice that he needed a less demanding role. Both Dan and I recognized that having more than one minister step down provided convenient cover.
Finally the appointed day arrived. It was Wednesday, May 30, 2012. I had signed the resignation letter the day before, in Darrell’s office. It’s very easy to resign. The executive council office has had lots of practice preparing resignation letters. It’s one sentence.
That afternoon, as I looked on, Maureen MacDonald was sworn in as Nova Scotia’s new finance minister. I walked alone out of Government House, down Barrington Street toward Province House to get my car and drive away.
I was a backbencher, and I was free.