Dunderdale shuffles the deck

Premier Kathy Dunderdale swit-ched up two of her top lieutenants Tuesday afternoon, shuffling her cabinet to swap Tom Marshall and Jerome Kennedy.

Marshall takes on the Department of Natural Resources; he’ll now be responsible for managing the development of the massive Muskrat Falls megaproject, currently forecast to cost $7.7 billion.

Kennedy isn’t in for an easy ride either, though. As finance minister, he’ll be responsible for reigning in government spending and reducing the budget deficit, currently sitting at more than $700 million.

Kennedy will also become front and centre in the brewing battle with public-sector unions, which have been in the process of negotiating a new contract for most of last year.

Dunderdale told reporters that both men had been busy in 2012 and said she’s hoping that a “change is as good as a rest” for them.

“I don’t have the opportunity to give senior cabinet ministers — particlarly these two — a rest,” she said.

It looks like Kennedy will continue to be front and centre for the PC government, carrying big portfolios when they need special attention. At various times he’s run the departments of Justice, Health, Finance and Natural Resources.

For the past year, he’s been the point-man on Muskrat Falls, managing the development of the project, right up until it was finally sanctioned by the government just before Christmas.

Kennedy is widely seen as having a combative style. The last time he was finance minister, negotiations with the nurses’ union came to the brink of a strike before the two sides hammered out a contract.

He hit the ground running when it comes to the labour negotiations, saying that as far as he’s concerned, workers shouldn’t expect anything extravagant.

“I look forward to working with them,” he said. “They have to understand that we’re in an economy where there are not going to be any huge raises.”

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NAPE, the province’s largest public-sector union, declined to comment on the cabinet shuffle.

Another big challenge for Kennedy will be the budget. Dunderdale said the government is going to have to “tighten the belt significantly” and make cuts to bring the deficit under control.

On top of all of that, Kennedy will be the one to tackle public-sector pensions, which Marshall and Dunderdale have been talking about a lot recently.

While the government has been steadily paying down the direct debt of the province for the past few years, the unfunded pension liability keeps going up, which counts towards the overall net debt.

Dunderdale said the government can’t afford to keep putting money into the pension funds to top them up.

“Our pension plans are going to go bankrupt. We’ve put $4.4 billion into the pension plans over the last number of years. We’re not in a place where we can do that every four years,” she said.

“That means we’ve got to stop building hospitals, building schools, paving roads, if that’s what required of us.”

Marshall, on the other hand, moves to Natural Resources. The Muskrat Falls file will likely be the biggest thing waiting on his desk when he gets to his new office, but Marshall said there are some other things he’s looking forward to as well.

“Natural Resources is a portfolio that’s a very exciting one,” he said. “It’s providing our province with the wealth that it’s had. It has a number of files that are of particular interest to me, namely the forestry file, and the west coast oil play.” He said he’s “looking forward to it.”

jmcleod@thetelegram.com

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