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January 6, 2021

How people with disabilities saved Nova Scotia

There is a thing called ONENS that is meant to be the follow-on to the Ivany Report of 2014.  

ONENS' dashboard acknowledges that no progress is being made on 7 of their 19 goals.  Although the Ivany Report says quite specifically that people with disabilities are "key contributors to local economic development, entrepreneurship and workforce renewal." we do not rate a mention in any of the 19 goals.

The province is fond of saying plaintively that 30% of Nova Scotians have a disability.  The province spends $300 million on its Disability Support Program (2016) to support 4,308 people.  Any serious businessperson or government representative ought to be thinking "....hmmm, here's an underutilized investment.  Let's think about engaging the problem by diversifying the portfolio."

But no, the government of Nova Scotia is so busy discriminating against people with disabilities that it overlooks the economic opportunity they present.  

This is the reason the province sees people with disabilities as liabilities.  

We are assets!

I admit to not having read all the details about ONENS' 19 goals, but the obvious one is "Labour Force Participation Rate", which carries no mention of people with disabilities.  In keeping with pervasive disenfranchisement, I venture that no one with a disability is included among the 16 or so organizations currently assembled by NSCC President Don Bureaux as the "Collective."  I'd love to be wrong.

Let's follow the Ivany Report and start thinking about Goal 20, a complete upending of approach, where self reliance is the goal and ownership is the vehicle.  Where people with disabilities are allowed to create wealth like anyone else. 

A combination of RDSP savings, more equitable use of the Disability Tax Credit, taxpayer savings, investments, and creative business practices would make it possible.  But we need to get over the liability lie.

Here are fruitful and profitable elements of Goal 20

New RevenueExampleBenefitting
Income tax$2,250 for each new $30,000 jobProvince
Investment from RDSPAllow RDSP to serve as housing down paymentsRDSP owners, real estate business, construction industry
Spending multiplier10 times disposable incomeEntire economy
Refundable DTCcurrently the full $8.000 is only available to the wealthyLow Income DTC holders
HSTProvincial share of consumption taxesProvince
Profit30% of spendingRetailers
TourismTourists with disabilities in the US spend $17.3 billion annually, and in the past two years alone, more than 26 million adults with disabilities traveled for pleasure and/or business, taking 73 million trips.
Discontinued supportssome portion of Community Services spendingProvince

Covid has taught us that part-time work from home is do-able, and telemedicine is the future.  People can stay in their communities, participating and contributing.

There's something here and it needs to be explored.  Maybe some real economist can help.  But not thinking about it is irresponsible and against the public interest.

Some details:

This is a shocking response I got in 2015 when I was blogging about Sheltered Workshops:

I believe that our workshop still does packaging and assembly work for (a local company). I have no idea what the compensation is, but the productivity of the clients far surpasses that of the regular employees at (the local company).

People in sheltered workshops don't make minimum wage, and the fruits of their labour go into the common account.  This is shamefully unfair.  

We have a very slowly increasing population, a working-age cohort around 60%, a declining under 18 population, a dramatic increase in numbers age 65 and over. Three decades ago, there were 20 workers entering the region’s labour market for every ten retiring.  Now there are only seven.  In 2031, with just over a million Nova Scotians,  60% will be working and 25% over age 65.

"Simply put, population aging will contribute to a large increase in future levels of government spending. When combined, projected government spending increases related to health care and Elderly Benefits are expected to be 5.3 percentage points of GDP higher in 2045 compared to 2017." - Canada’s Aging Population and Implications for Government Finances, Fraser Institute, 2017

That's probably realistic.  Sounds expensive.

Most of Goal 20 is amply elucidated in principle in Choice, Equality and Good Lives in Inclusive Communities:  A Roadmap for Transforming the Nova Scotia Services to Persons withDisabilities Program.  This visionary 2013 document makes the moral and ethical case for a complete reassessment of the situation of people with disabilities.  It doesn't explore an economic case.  After some initial enthusiasm, implementation of the roadmap ground to a halt.  The last newsletter is December, 2017.

The Roadshow, as they called it, unveiled in 2016 gave some hard-to-find numbers:

Independent living745271
Alternative family Support17238
Small Option Home589491
Group Home592287
Residential Care Facility45019
Adult Residential Centres37532
Regional Rehabilitation Centres8542

Community Services Disability Support Program is responsible for 4300 people at varying levels of support.  It cost $303 million in 2016.  The total expenditures in DCS were $929 million, so about a third,  It's almost entirely in the form of direct grants to community groups or individuals.  That's $70,000 for each person, a ridiculous amount of money (no DCS staff included).  

The 1300 (?) Independent Care Management clients were paid $244,464,233.40

So why is it so expensive?
There are many disincentives at work - a large, well-funded bureaucracy, charitable institutions with old-fashioned ideas, the inevitable effect of working in silos, and what Gerry Post calls the Disability Industrial Complex.  

People are always complaining about taxes,  When the alternatives are universally bad, we should remind ourselves what a privilege it is to wake up in the calm safety of Canada.  Especially considering what's happening to our south.  But who's going to cough up the extra for the increasing elder/disability cohort?

Income taxes in Nova Scotia work like this:

This chart is made from census data for those over 15 and tax rates from a simple calculator.   It's not a perfect illustration of progressive tax, but it goes in the right direction.  The large jump at $70k is a mystery, but it wouldn't surprise me if it had something to do with the Public Service.

In 2021, Provincial sources of  revenue are about $7.5 Billion

Nothing really approaches Income Tax and HST, so let's see how we could rejigger to add another 5% - $375 million.  

40% of Nova Scotians earn less than minimum wage.  If they earned minimum wage, they'd pay $1500 each in taxes.  Let's make it a goal to move 10,000 people into employment.  That's $15,000,000 in taxes plus savings in various supports ($35 million(?)).  There are plenty of emerging employment opportunities - contact tracing, remote monitoring of health, 211 enterprises.

The Disability Tax Credit makes one eligible for a Registered Disability Savings Program.  Buried deep in a 2015 report on RDSPs are some revealing numbers:In Nova Scotia
  • 3,332 have RDSPs
  • Average value $17,644
  • 19,040 Eligible
  • 17.5% uptake
Let's make sure every client of DCS has a RDSP - starting value $11,000 = $50,000,000 + annual contribution + return on investment.

Let's start a real estate investment fund for the RDSP and spend the $50 million, so participants become owners and employers.  The province can fund the initial offering and sell its shares at a profit.  Older, discontinued provincial properties can be recycled.  Retrofitting old buildings is in line with climate change policies.  Small towns that are emptying out can become viable again.

Since the DTC is much more favourable to those with high incomes, let's lobby our MPs to make the DTC refundable - say half of DTC holders * $8000 =  $80 million annually.

Minimum wage earners spend most disposable income on HST eligible purchases - say $10,000 *.15 * 10,000 new employees = $15 million.

So there's around $30 million in new taxes, $50 million in investment, $80 million in transfers.  DSP clients get a chance to be everything we say Canadians should be.

Tourism will be a major source of revenue after Covid (we'll have to say goodbye to cruise ships for many years) and conventions may never recover.  It was a $2.6 billion sector in 2019.  We are within a days drive of 13 million retired New Englanders who are used to all the amenities of travel brought by the Americans with Disabilities Act.  Yet our system of ratings is meaningless, trip planning is impossible.   Now is the exact moment to become the destination with no barriers.  I suggested a change back in 2015 netting $43 million in HST.

Only people with disabilities have their entitlements given to third parties.  Unemployment checks go to the unemployed.  Old age pensions go to the old.  But disability supports go by default to shadow charities.  I call that discrimination, prejudgement, bias, bigotry and intolerance.  And taxpayers are paying for it. 

It is folly to bypass consumers and give grants to suppliers.  Basic capitalism puts decisions in the hands of consumers to encourage competition.  By granting directly to charities, Community Services encourage bloat.  Better to increase the already generous charitable deductions to give the best value to donors, and better to give supports directly to clients for spending on good value.

Other things to consider:
  • The rate of charitable deductions and the role of charities
  • Making some tax credits automatic
My instincts say this is not crazy, but it needs to have serious discussion and professional support.  Now that you've made it to the end, what do you say?  

GOAL 20!

December 17, 2020

What's in a name?

I came across a list of Which Canadian Registered Charities Received the Most Money from Provincial Governments in 2012?  I know it's eight years old, but it's interesting.  

In Nova Scotia, 115 charities made the list.  Totaling $3.5 billion dollars in provincial funding.

Surprising to me was the inclusion of 
  • Capital District Health Authority (I checked - still a charity in 2020)
  • Halifax Regional School Board
  • Cape Breton District Health Authority
to the tune of 1.3 billion dollars.

Those entities, I assumed, are simply taxpayer funded - part of the Department of Health and Wellness or Education.  For those three, the charitable receipted donations represent 0.03% of their revenue. Three HUNDRETHS of one percent.  Like finding $8.64 outside the McDonalds where you flip burgers for a living.

Why are they charities?  Does it matter?  Here's the summary:

And by category (my categories):

Provincial FundingFederal FundingMunicipal FundingReceipted DonationsTotal Revenue
POST SECONDARY$504,837,252$68,961,042$309,793$31,199,957$1,294,643,714
RESIDENT SERVICES$57,541,424$250,080$20,512$59,594,857
COMMUNITY HOUSING$53,152,198$56,635$91,121$56,212,476
HOME FOR SPECIAL CARE$19,671,666$320,578$46,691$24,962,322
SHELTERED WORKSHOP$12,306,665$378,408$545,837$19,104$17,225,619
SOCIAL SERVICE$10,984,507$19,412,304$85,514$36,903$31,855,811
Grand Total$3,568,617,137$148,799,602$75,256,538$38,348,607$4,937,621,000

Receipted donations are .78% of all revenue for these 105 charities, and  postsecondary education accounts for 80% of that.

Why bother to set up charities when you could just have separate pigeonholes in the provincial budget?  There's a category for 'Lands and Forestry' and they pay their bills just fine.

You can argue that Dalhousie makes quite good use of its charitable status ($8.5 million) but 34 of these charities had no receipted donations.  

I don't really know what this is about, but it seems oddly complicated.  36 of these charities are what I would call disability focused, and they are funded by the province for over $150 million.

They collectively receipted under half a million dollars.

I don't like the idea that people with disabilities get their entitlements indirectly.  If you are unemployed, you get a check paid to you.  If you have a disability, your entitlement goes directly to a third party as an act of charity.  Some of the third parties are good. but on the whole the message is harmful.  This arrangement just hasn't worked in housing, employment and community inclusion.

Here's what makes sense to me:
  • Part of a government department with some autonomy
    • Health Regions
    • Public Education Boards
  • Not for profit with active charitable wing
    • Universities
    • Hospitals 
  • For profit with associated charity
    • Senior facilities
  • Government Entitlements
    • Paid to individuals

I'd love to know what you think.

Gus Reed

November 2, 2020

RRSS Continued

David Smith of Alberta had some comments that made me want to take a more detailed look at the RRSS finances.

Just forgetting about the tiny non-DCS revenue:

RRSS Clients174
DCS to RRSS$24,694,230
Per Client$146,766

Total salaries (includes some administrators, but how many is unclear) $19,822,354

Group Home67
Small Options90
Salary Expenses /client$113,922

Based on the expenses of full and part time workers

All Labor costspeople% of peopleDollarsPer worker
Part time29166%$11,469,569$39,414
Full time14734%$8,352,785$56,822

A client's share of salary expenses is

Full (66%)$75,6881.3

On average, each client has 2.3 FTE workers

And this expense breakdown:

Overhead (Board?)$20,61614%

And a 4 person small options home has 9.2 workers to divide up the work.....

If you remember the DCS roadshow, there were 491 waitlisted for small options homes in 2016.  $72,062,106.  Affordable?

It's the salaries!