This is a response to 'Why The Film Industry Controversy Matters To All Nova Scotians' by Paul Andrew Kimball
I like articles such as these that focus on an issue but also allude to larger questions. In this case the issue is the Liberal Government's April 2015 decision to restructure the film industry’s subsidies and, as Mr. Kimball directs and I concur, what this tells us about expectations of our political system and government's role in private industry.
Let’s take each in turn.
As outlined of course the 'first system' of government-industry involvement is preferable to the 'second system' i.e. patronage. But this is academic. Government should not be funding projects in the private sector in any form.
People who object to this will no doubt point to projects in the past that appear successful, perhaps the NS film industry is an example (yet I have not seen an analysis that incorporates the opportunity costs and jobs lost from the taxes extracted from the private economy to fund the film industry). But this is not the point. It is well known business subsidies, and let’s call them what they are, whether a friendlier form of payroll tax deductions or simple handouts, subsidies. Subsidies are bad for the overall economy and it is easy to see. The private market is very efficient at allocating resources to high return activities and away from low return activities. It does this freely and silently without political interference. Government on the other hand allocates resources inefficiently (since you need staff and resources both to extract the revenue and then spend it elsewhere) based on political interests. Since the funding in question is not occurring naturally you know it is likely a loser. For the group/company/sector/interest receiving the funding everything appears sunshine and rainbows but for Nova Scotia as whole the result is a negative. Given the political enthusiasm for handing out tax money once you allow a single instance of subsidy you are on a very slippery slope down to hundreds of millions for the Irvings or billions for steel companies. And remember providing subsidies means there is less money for social programs, education and health and higher taxes (unless you borrow the money).
On having faith in government. The answer is a resounding OF COURSE WE CAN’T! Our political system gives all power to a small handful of unaccountable people whose priority is keeping that power. Responding to the government’s breaking of their election promise regarding the NS film subside in 2013 I can only quote former Finance Minister Graham Steele (who has endorsed Kimball’s article); “Platforms are marketing documents, designed strictly to win votes.” This happens when cynicism achieves power. The elites can be fair but they do not have to be because you have no immediate political recourse and they know it. Do we need to rejuvenate our democracy? You bet, but that is beyond the scope of this article.
I am sympathetic. The NS film industry had been chugging along for a while with subsidies and then everything changed and sudden change is bad for business. But that is the insidious nature of political dependency, better the industry grows and flourishes on its own terms free of government dependency.
Jonathan Geoffrey Dean