Get out the scissors

Russell Wangersky
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So, it’s ideas they want, then?
Last week, the new provincial government announced it was open to hearing from the public about cost-cutting ideas. Tell us what you can live with being cut, they said. Well, on the one hand, it sounds like they simply don’t have any ideas of their own; on the other, it looks like a great exercise to make cuts and say, “Well, this is what you told us to do.”

Russell Wangersky

I’ll bite.

Nothing is going to make up for the staggering volume of lost oil revenues we’re experiencing, but here are a few options.

First, make a cash withdrawal from the energy warehouse. Newfoundland Hydro and Nalcor have the legislative ability to make a return on their equity investment — let’s start requiring the companies, as Hydro did in the 1990s, to pay a share back to the treasury.

Delay full-year kindergarten for three years and save $13.3 million per year.

Tell the province’s ferry users  they’ll have to start paying a larger share of their transportation costs. Last year, the province put almost $140 million into its interprovincial ferry service, $83 million of that into  operations alone. Yet the total the government collected in fares was slightly more than $6.2 million. If you’re paying just seven cents on the dollar for a service, you’re getting a hell of a deal. Factor in new ferry and terminal construction and users paid just 4.5 cents on the dollar. That has to change.

Why broadcast operations of the House of Assembly? Televised proceedings have done little to improve the House or our impression of our politicians.

Speaking of those politicians, let’s cut their office appropriations. A cabinet minister shouldn’t need an office budget closing in on half a million dollars every year.

Business subsidies? Last year, $17 million was budgeted to be spent on business attraction and international business development. Let’s treat it like a business — if we can’t prove it works, stop paying money out. The Research and Development Corporation? It cost $22 million last year — it has to show that investment bears fruit. Marble Mountain? If it can’t stand on its own, it’s the end of the line. It was poised to get $2.1 million in grants and subsidies last year alone, and climate indicators suggest it will have fewer and fewer good snow years.

And, jobs. There are going to have to be lost jobs.

No one likes to see job cuts, but it’s one thing or the other: pay more  taxes, or find savings. It’s robbing Peter to pay Paul, but such is the land of budgeting.

Since 2012-13, the number of directly employed civil servants has fallen from 7,582 to 7,176. At the same time, the number of top-level staff has stayed pretty much the same: there were 85 deputy ministers, associate deputy ministers and assistant deputy ministers in 2012, and, as of last year, there were 87. (In the same four-year period, the salary costs for those positions went from $11.6 million to $12.1 million).

Some salary costs have gone way up. At Service NL, the deputy minister and three assistant deputy ministers saw their combined pay rise by more than $47,000, bringing their combined annual salary to  almost $570,000. In Municipal Affairs, (where the number of assistant deputy ministers increased by two in 2015), salary costs for senior management rose from $485,700 to $715,139. In Municipal Affairs, the top six positions account for only three per cent of the department’s 187 jobs, but six per cent of the department’s salaries.

And there are other areas that look trimmable. Believe it or not, there was a government department in last year’s budget with a minister, deputy minister, director of communications, media relations manager, public relations specialist, two assistant deputy ministers and six director-level positions — but only 47 staff in total, meaning it had 13 people essentially overseeing the remaining 24. Another has a deputy minister, a chief operating officer and four director-level positions administering 26 other positions.

And don’t forget that each job at a senior level includes additional costs for administrative support. (A similar senior executive review could be done at all provincial Crown corporations, especially Nalcor.)

So there’s a start.

It’s going to be a hard year, with hard decisions. Get ready.

Russel Wangersky is TC Media’s Atlantic regional columnist. He can be reached at — Twitter: @Wangersky.

Organizations: Service NL

Geographic location: Marble Mountain

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Recent comments

  • no money
    January 18, 2016 - 11:38

    Good advice Russell but will anyone that makes the decisions take notice., probably not. It's looking more like this new government is going to be just as bad as the outgoing one. People in this province are too busy tearing down the little guy like themselves while those at the top are delighted they go unnoticed, they're laughing at us all the way to the bank.

  • Me
    January 18, 2016 - 10:18

    Great story. If you dug a little deeper, you will probably find more. If you want to find the real waste, ask the staff. You can check the records and see the DM got a new computer but did he need it? How bad was the old one? How many supervisors have nobody to supervise? How many managers travel when the work could be done by phone?

  • Brent
    January 18, 2016 - 10:17

    Public sector benefits need to be scaled back (sick time, vacation time, OT rates), not because we're in a deficit but because it isn't fair. They have high salaries now but their benefits in lieu of pay from the 90s/early 2000s were never cut back. Why can a public sector worker bank a full year salary in sick time and vacation pay? Why does a nurse make $90K or even a $100K salary because of outrageous OT rates and hours abuse. Make every department look at how many T4s they issued for over $90K. If you have more than 10% of nurses, nalcor employees, or civil servants making over that number then the system is being abused. Doesn't seem fair you've got these gold plated jobs/pensions on the backs of non-unionized taxpayers and now we might need to raise our taxes to pay for the outrageous benefits/salary of the minority that have public sector jobs.

    • Mgmt
      January 18, 2016 - 13:03

      I beleive it's only management that can bank a full year salary. Union can get vacation pay they built up, to a maximum and get nothing for unused sick leave when they retire. Not really fair, is it?

    • Spaz
      January 18, 2016 - 16:17

      High salaries? You are delusional.

  • RDC is not effective
    January 18, 2016 - 09:16

    Very good point about the Research and Development Corporation, costing us $22M/year, and showing very little return in terms of new technologies or high-tech businesses being created or grown. The main business they have created is themselves. Time to pull the plug.

    • Kev
      January 19, 2016 - 11:52

      Also, how many R&D Corp grants have gone straight to MUN? If you want to beef up MUN's research equipment, just give them the money. No need to launder it through this waste of administration called the R&D Corporation. Similarly, how much public money has been given to the "health care foundations" who then "donate" it to health boards?

    • Stephen  Redgrave
      Stephen Redgrave
      February 01, 2016 - 10:10

      Agreed! Unless the new hi tech businesses stay here , they are a useless departmental waste.

  • Ken Collis
    January 18, 2016 - 06:41

    Good presentation sir. There are some great points you bring up. One paragraph was made much simpler than the facts dictate however, the ferry services. As part of the terms of union when NL joined Canada was the federal government supply ferry services to isolated communities. Over the years the province took over that responsibility and accepted one time cash settlements from the federal government. This money was used by all NL residents as government saw fit. If you add this fact to another, that isolated communities don't have roads to them that require maintenance, upgrades, police patrols, etc... and you discover that the cost of having those communities serviced is not a lot more than other towns. No doubt fees can be raised I'm sure, but not as much as you insinuate.

    • Stephen  Redgrave
      Stephen Redgrave
      February 01, 2016 - 17:58

      Excellent point Mr Collis. Just like the railway was a Federal responsibility. Newfoundland accepted a little support in maintaining roads in exchange for servicing the railroad. An unfair trade off that saw the Feds walk away virtually free and clear of any real costs. Transfer payments keep on being reduced (or not keeping up) and roads are suffering all over the province.