Economist Wade Locke tried to scare people a little bit Wednesday night.
About halfway through a presentation about the province’s fiscal situation, Locke pulled up a graph of the projected debt over the next 20 years.
“Here’s the debt,” he said. “This should be a suspiring graphic for you, and it should be a disconcerting graphic for you.”
Unless something changes, Locke said the government’s debt could be up to $10 billion within the next 10 years. By 2020, he said the government could run a $1.6 billion deficit on the provincial budget.
“If we don’t start dealing with it, it will become quickly unmanageable,” he told reporters after the event.
“I hope not only government heeds this message, but the rest of the province does as well.”
A respectable number of people did sit up and take notice; the lecture hall at Memorial University was packed Wednesday night to hear the presentation.
It also sparked plenty of discussion during a question-and-answer session, about what this will mean for the future of various parts of the province’s economy and how to avoid it.
Wednesday evening’s event was organized by the Harris Centre at MUN, and along with Locke, several panellists discussed their own impressions of the economic outlook.
Jo Mark Zurel, chairman of the St. John’s Board of Trade, said this is a wake-up call for people.
“We’ve got a situation here where we’ve got a massive amount of oil revenue coming in, so we have the opportunity to be able to set ourselves up for the long term,” Zurelsaid.
“We need a prosperity plan that include things like what do we want as a society? Do we want to get our debt under control? Do we want to diversify our economy so we can support ourselves after the oil is gone? Do we want to invest in education and skills?”
Zurel said there’s an opportunity to act on this right now and avert an ugly situation.
Federation of Labour president Lana Payne took a different tack; she said she doesn’t believe Locke’s numbers are necessarily the gospel truth.
“What are we doing here, saying that it’s all doom and gloom? There’s so much that we can do now to change up those slides, to change up those graphs, to change up that kind of presentation,” she said.
The problem, Payne said, isn’t with the future, it’s with what’s going on right now, and the fact that people aren’t seeing their fair share of the offshore oil wealth.
“I think we have to consider where we are and the wealth that we have,” she said.
The third panellist, homelessness and poverty advocate Bruce Pearce, said the province can get through things if it’s done right.
“We need to do it by ensuring that we lift people out of poverty as we’re creating prosperity,” Pearce said. “We can do both at the same time and we can pay down the debt.”
He said the most important thing is the government does it by listening to people.
“We can allow communities to make their own decisions around their economies, and also allow people to be more engaged and involved in it,” he said. “If they’re not, if they feel like decisions are being made for them, we’re not going to succeed.”
Locke, meanwhile, had a simpler prescription.
“There are three options you can do: you can borrow, you can raise taxes or you can cut expenditure,” he said. “All three have negative consequences for you, so what you need to think about is which of these options are the most effective way of dealing with your issues.”
jmcleod@thetelegram.com
Twitter: TelegramJames
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Agreed. That's why they don't tell us everything.