The St. John’s Board of Trade hosted an economic and fiscal policy debate on Tuesday night at the Sheraton Newfoundland hotel leading up to the October 11 provincial general election. Pictured from left debating, are Liberal candidate Danny Dumaresque, NDP Leader Lorraine Michael and PC candidate and Finance Minister Tom Marshall. — Photo by Joe Gibbons/The Telegram
Muskrat Falls criticism and pledges to curb government spending went largely un-heard at the St. John’s Board of Trade debate Tuesday night, which saw a sparse turnout.
But those who were there — about 50 people — saw Liberal candidate Danny Dumaresque repeatedly slam the government’s planned hydro megaproject in Muskrat Falls — even as he suggested it’s an issue that isn’t getting enough attention.
“The issue of Muskrat Falls is so real and people just don’t want to zero in on it,” he said during a discussion on the level of government spending and civil service growth.
“If you are committing, relentlessly pursuing a $5-billion project with the possibility of cost overruns which we are taking 100 per cent of the risk on, this is very serious business. I don’t know if people don’t understand that if you take five years to build it, we’ve got zero revenue and we’re going to have to pay back the bank $5 billion.”
Dumaresque added former PC premier Danny Williams would have listened to the people of the province. “He would take a break. He would not go and shove this down the throats of Newfoundlanders and Labradorians.”
The province’s debt — a constant bone of contention of the Board of Trade — had Conservative Finance Minister Tom Marshall pointing to his party’s fiscal record.
“To get the debt down, the first thing you have to do is run surpluses,” he said.
“You can’t pay down debt if you’re running deficits, so we went to surplus and we’ve had six in the last seven years, after years and years of deficits, which were financed by increasing debt, which meant that the interest would go up, which meant that we were sending money up to our moneylenders rather than using it for programs here in the province.”
NDP Leader Lorraine Michael — the only party leader who participated in the debate — said the NDP approves of how quickly the government has cut about $4 billion from the province’s net debt.
“My concern is, and we do say this in our platform, is that we have to make sure we maintain a balanced budget so that we do not add to that debt,” she said.
“Another concern that we have, and this is not something that’s in the platform, but it is something that we’re concerned about, is that government has been balancing our budget, but government has been eating away at our cash assets.”
Right now we have cash assets of almost $2 billion, and if government continues using the cash assets for our programming, then within a very short period of time, three to four years, our cash assets will be gone.”
Dumaresque said planning debt reduction is difficult when revenue is heavily dependent on volatile factors like resource prices.
“We’re going into a situation where we don’t know exactly what’s going to happen with the oil prices,” he said, “and now that we’ve got all of our eggs in the basket, what we’re prepared to say is that yes, if there are surpluses, if the price of oil and the volumes keep coming in and there are surpluses on current account, a percentage of that will have to be put in and allocated to the debt. But we do have other real priorities. We have the basic needs of many parts of rural Newfoundland that must be addressed.”
Michael said the government’s promise of future value for spending on Muskrat Falls and Nalcor oil exploration doesn’t wash when the money could be better used elsewhere.
“Some time in the future. Look, wait, hope, everything’s going to be OK — it’s not good enough for the senior citizens in this province who today are having to go to malls for heat in the winter, have to choose between food and medicine to see what they can afford.”
Dumaresque got testy as Marshall countered his Muskrat Falls doomsaying by pointing to the province’s rising economic fortunes as evidence of the government’s financial stewardship, and noted the former auditor general of the province is now running as a candidate for them.
“Mark Carney, the governor of the Bank of Canada, says what we’re doing here is a model for the whole country,” said Marshall.
“Standard and Poors talked about our prudent spending practices. You can either listen to Mr. Dumaresque or you can listen to the governor of the Bank of Canada, you can listen to Standard and Poors, you can listen to the former auditor general.”
The Liberal candidate interrupted to say the provincial government is lucky to govern a resource-rich province, contrasting its fortunes with a country hit hard by the global recession.
“It’s not lost on anybody that what this government did is hit the political jackpot, where the oil price went from $40 to $150, and if the oil projects had not been put in place, and the oil had not been pouring, then I’m telling you we would be in an Iceland position right now.”