BETWEEN THE LINES
THOSE POOR,
MISGUIDED NEWFEES
By Dawn Chafe
N
ewfoundland and Labrador’s 2016 provincial
budget is a prime example of something so
right, that’s also so terribly wrong.
I’ve been following budget announcements
throughout Atlantic Canada for 18 years and this is the
most draconian budget I’ve ever seen: a two per cent
hike in the HST… the re-introduction of retail sales
tax on insurance… an unprecedented tax on books…
50 brand new service fees… a gas tax increase of
16.5 cents per litre… a horrific Deficit Reduction Levy
of up to $900 per person… on and on it goes.
By my rough calculations, the cost to live in
Newfoundland and Labrador just went up by
approximately $3,000 per person thanks to
#nlbudget2016. And it was a good thing:
someone, finally, was showing the fiscal
discipline this province so desperately
needs.
This was not the budget that
Finance Minister Cathy Bennett
and her recently elected Liberal
government wanted to deliver;
it was a budget they say
they were forced to deliver
following year-over-year of PC
deficits. Even when revenues
were at unparalleled highs
thanks to oil prices that were
over $100 a barrel, the government
tabled deficit budgets. Why? To fund spending
sprees on the public service, infrastructure — and
Muskrat Falls.
Muskrat Falls… the hydroelectric project in Labrador
that was supposed to increase the province’s access to
clean energy, create a physical link to the Maritimes
(via subsea cable), export energy (at a profit) and
essentially warn Quebec that it’s no longer the only
way for Labrador power to get to market. It was
expensive at its original $5 billion cost, but with
continued construction delays and no-end-in-sight cost
increases, its current $7.5 billion-and-ballooning price
tag has become increasingly hard to swallow.
After years of government cheerleading, Bennett’s
budget speech included harsh words for the provincial
crown corporation charged with delivering Muskrat
Falls. The Minister went so far as to charge that Nalcor’s
“organizational structure, compensation and benefits
packages” had grown unreasonable.
6
Which is why, less than a week later on April 20,
Nalcor CEO Ed Martin resigned his post. That same day,
he was followed out the door by his board of directors
who said they had no choice but to resign since they
had lost the confidence of government (but not before
they’d approved over a million dollars’ worth of bonus
packages).
Citizens are up in arms — and they should be. At
public rallies and via online rants, they’re booing the
Liberals and the Conservatives with equal vigor.
They want to know how things were allowed
to get so bad in the first place. Why did the
PCs double public sector debt since 2004, to
$15 billion? Why did the Liberals, who had to know
how bad the finances were, promise during their
election campaign that they would repeal the PC’s
HST increase? Why didn’t Finance Minister
Cathy Bennett, a former chair of the
Nalcor board, sound the alarm about
mismanagement at Nalcor a long time
ago?
More to the point, citizens don’t
trust that the current fiscal code
red is really a crisis. They’ve
seen this same play too many
times before: a change in
government is followed first by
monstrous cutbacks (because
of the previous administration’s
mismanagement), then a period of
moderation, leading into a spend-spend-spend
mindset heading into the next election. The result is
that citizens no longer trust their government — any
government. They sense that the current budget’s tax
grab is just a ploy to make layoffs and cutbacks more
palatable. And they wonder why they have to pay to
clean up the messes made by generations of political
folly.
Citizens are no longer content to ask for honest,
responsible, trustworthy government: it’s a demand,
one that politicians ignore at their own peril.
Dawn Chafe started with Atlantic Business Magazine as a freelancer
21 years ago, becoming editor in 1998.
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Atlantic Business Magazine | May/June 2016
Date:16-04-25
Page: 6.p1.pdf