NOVA SCOTIA: THRONE SPEECH PROMISES LEGISLATED AUTO

UNCLAS HALIFAX 000305 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: EFIN PGOV CA SUBJECT: NOVA SCOTIA: THRONE SPEECH PROMISES LEGISLATED AUTO INSURANCE PREMIUMS SENSITIVE BUT UNCLASSIFIED -- PLEASE PROTECT ACCORDINGLY. ¶1. (U) Nova Scotia's House of Assembly session opened September 25. The Speech from the Throne which laid out the government's agenda began on a conciliatory note; Premier Hamm's Conservative party is two seats shy of a majority and will need cooperation from the Liberals and NDP to govern. "We all want minority government to work," Lieutenant-Governor Myra Freeman said. The speech noted that the province faces a number of challenges -- improving health care and increasing economic competitiveness were at the top of the list -- and promised appropriate investments and tax cuts as the way to address them. ¶2. (U) Along with a pretty standard call for Ottawa to provide the province with more money for health care, the Throne Speech announced that the government planned to introduce legislation lowering automobile insurance rates 20 percent. A precise mechanism for doing this was not spelled out, but the speech (and previous leaks to the press) indicated that the government is looking at a combination of price and claim controls to achieve the 20 percent reduction. The speech also announced plans to cap property tax assessment increases and to provide relief to voluntary organizations from "frivolous and unwarranted legal claims." ¶3. (SBU) COMMENT: Conventional wisdom is that this minority government will last about a year. In the near term no one wants to force another election, and Premier Hamm is in a reasonably strong position with 25 out of 52 seats. But the opposition parties will inevitably begin to chafe if the Premier is able to claim credit for, and improve his party's support with, populist measures like insurance rate reductions and property tax caps. On the other hand, there's no guarantee that either measure will be particularly effective or well-implemented, and the Liberals and NDP may be able to improve their own standing simply by biding their time. END COMMENT. HILL