HALIFAX - Nova Scotia's political leaders will barely let the word cross their lips as they campaign for the June 9 provincial election.
It's as if even uttering "deficit" is forbidden, to be avoided like some sort of political curse.
At a time when spilling red ink to stimulate a shrinking economy is all the rage among most governments in the country, the main parties vying for power here remain strangely silent on the issue.
Their reluctance to embrace budget deficits, even during a recession, reflects voters' fears about adding to an accumulated debt that has pushed past $12 billion -- a per-capita burden second only in size to the one carried by Newfoundland and Labrador.
"The only reason the politicians are taking this point of view is because they're hearing it in the streets," says Don Mills, head of a Halifax-based market research firm.
He says Nova Scotians are well aware the province will soon be in a league by itself when it comes to debt, as Newfoundland's economy is widely expected to take off when oil prices resume climbing.
"There's a widespread acknowledgment that we're not in good shape in this province and adding to an already bad situation would only make it that much worse," says Mills, CEO of Corporate Research Associates.
"If I did a survey and asked people, `Is the debt a problem?' I think I would get the vast majority saying yes ... They may not even know what the amount is. They just know it's a lot of money."
Mills says former Conservative premier John Hamm spent almost eight years "drilling into everybody's head" that deficits are bad and there's a cost to having a debt.
Hamm introduced legislation in 2005 that required balanced budgets and regular payments to reduce the debt.
Nova Scotia's debt-to-GDP ratio has been declining, but the province is now paying more than $900 million annually in debt servicing charges, leaving a big hole in an $8 billion budget.
"That's the biggest problem," says Mills. "We can't afford it."
Lars Osberg, an economics professor at Dalhousie University in Halifax, said right-of-centre research groups, such as the Atlantic Institute for Market Studies, have done a good job persuading Nova Scotians that debt is something to fear.
"All three political parties have been influenced by them," he says. "They've certainly got the NDP running away from the idea of a deficit."
NDP Leader Darrell Dexter, the perceived front-runner in the election race, has already pledged to bring in a balanced budget in 2010-2011 if his party wins enough seats to become the first New Democratic government east of Ontario.
"We are the worst-placed in the Confederation to try and undertake deficit spending," Dexter said in an interview while campaigning in Truro.
"The reality is, we can't spend our way out of this recession. ... Unlike other provinces with lower debt that might be able to absorb additional debt, we just simply cannot. ... If debt was the road to prosperity, we'd be a very prosperous place."
Conservative Premier Rodney MacDonald has made an art of avoiding talk about deficits, having previously engineered a complex legislative manoeuvre that would have suspended debt payments to allow the province to remain in the black.
Dexter and Liberal Leader Stephen McNeil rejected the premier's gambit as a shell game, arguing that MacDonald's proposal would actually add $1.4 billion to the debt.
The two parties then triggered the election campaign by defeating the minority government in a confidence vote on May 4, the same day MacDonald released a budget that he argued was deficit-free.
"The government has been preaching about the perils of running deficits and then had to do that fancy end run to change the legislation to enable the books to be balanced," said Michael MacMillan, chairman of politics and Canadian studies at Mount St. Vincent University in Halifax.
"Lo and behold, all three parties made critical decisions and actions based on the unacceptability of deficits."
As for the Liberals, McNeil's party was broadsided Saturday by a withering editorial in the Halifax Chronicle Herald that accused them of rolling out a platform that failed to say whether a Liberal government would create a surplus or a deficit.
Osberg says there are many reasons why it's "kind of crazy" to reject deficit financing during a recession, not the least of which is the need to deal with the inevitable decline in tax revenue at a time when no politician is suggesting spending cuts or tax increases.
But Osberg agrees that the "legacy of debt" created by the former Conservative government led by John Buchanan in the 1980s is key to understanding why Nova Scotians are loathe to go into the red.
"There is that overhang of debt from the past, which is a good reason to be cautious about acquiring more."
