Report says Nova Scotia can do more to offset impact of inflation

As inflation reaches its highest level in decades, a new report says 50 per cent of Nova Scotia's workers are earning less than required to meet their basic needs.

The report released Wednesday by the Nova Scotia branch of the Canadian Centre for Policy Alternatives says consumer prices in the province rose 9.3 per cent between June 2020 and June 2021 -- the largest year-over-year increase since July 1982, when inflation hit 9.8 per cent.

It says weekly earnings failed to keep up, rising by just 4.1 per cent over that period.

"It's quite striking to see the increases in food, rent, gas and transportation costs," report author Christine Saulnier said in an interview.

The report says that between June 2020 and June 2021, the cost of food in the province rose by 8.8 per cent, rent rose 8.2 per cent and gasoline prices jumped 60.5 per cent.

Based on its calculations, the policy centre says the income needed to meet basic necessities has risen between five and eight per cent in the past year. The report lists living wages that range from a high of $23.50 per hour in the Halifax area to a low of $20 per hour in Cape Breton.

According to the report, 106,000 of the province's roughly 400,000 workers earn less than $15 an hour while another 102,000 workers earn between $15 and $20 an hour.

Saulnier, the CCPA's Nova Scotia director, said raising wages ultimately falls to employers.

"Given the tight labour market I think they have very little choice but to do that, but it isn't just on their shoulders," she said. "Government can do a lot on both the income and the cost side."

Saulnier points out that there have been no permanent, substantive increases to government income benefits to offset the rising costs.

In fact, she said when wages go up to simply meet the rising cost of living, lower-income households often don't qualify for provincial tax credits that further lessen the burden.

The tax system needs to be more progressive to ensure those who have the ability to pay do and those that don't aren't penalized, Saulnier said.

"With an increase in income, we don't want to see people not being eligible for different income supports," she said. "They (governments) need to be looking at those thresholds and make sure they are more generous."

Saulnier added that governments can also lessen the burden on employers by providing more direct support for workers to help lower costs for essentials such as food and housing. As well, she said health-care coverage could be expanded to cover such things as drug costs.

The report also calls for faster action to increase Nova Scotia's minimum wage. The current rate of $13.35 an hour is set to rise to $15 an hour by April 1, 2024.

Saulnier said although the $15 figure is now outdated because of inflation, it needs to be implemented immediately along with a new plan to hit $20 an hour as soon as possible.

"We need a plan to get us much closer to what people need to live in this province," she said.

This report by The Canadian Press was first published Sept. 7, 2022.