Newfoundland and Labrador: welcome to austerity

Lana Payne
Send to a friend

Send this article to a friend.

The definition of insanity, Albert Einstein once said, is doing the same thing over and over again and expecting different results.

Welcome to austerity.

In Europe, the harmful and devastating impact of austerity is driving up unemployment to unprecedented levels. And yet the response from many governments, especially the U.K., is more austerity. The impact on the social fabric of nations has been so great that some commentators worry the social welfare state is now in jeopardy.

In Canada, Prime Minister Stephen Harper has also taken a rather deep liking to austerity.

It is a ready-made excuse to gut government and change the positive role it should play in our lives, in building a better society, in sharing economic wealth and mitigating the inequality gap.

It is another excuse to trash government as a catalyst to build opportunities for all citizens; another excuse to turn Canada into a fend-for-yourself country, where collective action is a thing of the past.

So in this regard, austerity fits nicely with the Harper conservative ideology.

Many economists have blamed austerity at the federal level for reducing economic growth. Three austerity budgets have resulted in fewer opportunities for Canadians, especially younger Canadians. David MacDonald, who leads the Alternative Federal Budget process, advised the Harper government to “turn off the austerity auto-pilot and get the economy going.” Instead of “budgeting with eyes wide shut,” Mr. MacDonald, an economist, urges government to address the issues that most Canadians struggle with every day, instead of making things worse and leaving Canadians to fend for themselves.

In Newfoundland and Labrador, the Conservative government has jumped on the austerity bandwagon, delivering a budget on March 26th filled with deep service and job cuts; cuts that will erode the social fabric of our province and damage the economy, too.

The government’s theory is they can get away with it, at least in the economic sense. Political survival is another matter. The theory is the cuts will have minimal economic impact because the private sector is said to be at full-steam, therefore a booming private sector can pick

up the slack; that instructors, archivists, probation officers, sheriffs, lawyers, librarians will find jobs in the private sector. And what of young teachers? According to the teachers’ union, cuts through attrition will be just as harmful. The union expects there to be as many as 140 fewer teachers in the education system in September.

Job growth areas have been in construction and retail/service sector. Not much need for elementary teachers on a construction site. But there are those available low-paid service sector jobs. A cynic might point out that our labour market is so hot that thousands of Newfoundlanders and Labradorians continue to travel huge distances for work, to Alberta and the coast of Australia.

The government ought to know that there is a problem with theories. It is a nasty thing called reality.

Job cuts (layoffs, eliminated vacant jobs and through attrition) in this budget, combined with the jobs eliminated from the Employment Assistance Services a few weeks back and at Eastern Health last fall, are mounting. Topping over 2,000 and counting.

The news since the budget is filled with just how broad and deep the cuts were.

Expect the fallout to continue as social spending cuts spread their way throughout the non-profit sector where the carnage will continue. And then brace yourselves for the next shoe: spending reviews of both health care and post-secondary education. The Conservatives are not done yet.

In addition to job and service cuts, the government is also privatizing services like the Adult Basic Education program currently offered at public colleges throughout the province. This at a time when the labour market is said to need every skilled worker it can get. We won’t get there by hacking at education programs or making them less accessible.

The cuts are beginning to form a theme. The Family Violence Intervention Court. Human Rights Commission. Adult Basic Education. Dental program for poor seniors. Arts and Culture. Libraries.

They are the sorts of public programs that speak to the kind of society we wish to have; one that

protects the vulnerable (abused women and children), that provides opportunities and second chances, that ensures our history and culture is not just for those who can afford it.

The cuts also contradict past government strategies and goals: labour market recruitment, youth retention, poverty reduction.

Then there is the incredible disappearing deficit.

The government definitely has a credibility problem when it comes to its deficit and surplus projections, leading many to question whether the $1.6 billion was merely fiction: an absolute worst-case scenario used to justify the austerity.

The revenue side of the equation was not considered, but rather swiftly dismissed by the finance minister, as if we are supposed to believe, despite the real facts, that we are getting a fair share of our resources.

Newfoundland and Labrador must have a serious look at its resource rent and royalty regime. It must consider that we have one opportunity to get a fair and decent return on these resources.

This is not about penalizing multinational corporations.

No one is saying they shouldn’t get a whopping return on their investment, but when commodity prices skyrocket (absolutely nothing to do with their investment) the citizens of this province should benefit accordingly. We deserve a piece of the windfall.

So far the provincial government has closed the door on even having the conversation.

That means it has truly given up on sharing the prosperity.

And like federally, every decision is now driven by one goal: a surplus by 2015, which conveniently happens to be an election year for both.

It’s no wonder the populace is cynical. They have good reason.


Lana Payne is president of the

Newfoundland and Labrador Federation of Labour. She can be reached by email at

Her column returns April 20.

Organizations: Employment Assistance Services, Conservatives, Human Rights Commission Newfoundland and Labrador Federation of Labour

Geographic location: Newfoundland and Labrador, Canada, Europe September.Job Alberta Australia.The

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page



Recent comments

  • crista
    April 08, 2013 - 13:00

    with out attacking you as you request???? in your comments of I vote FOR me???? AND TO WHAT YOU VOTED FOR THE DOOR KNOCKING???? comment???? there is some thing to be seem about what you are as a bussiness man and the grey areas of law and you are not being attacked because you haven't expressed your controversial opinion here yet????

    • a business man
      April 09, 2013 - 09:58

      There is this thing. it is called a period. People use it to end a sentence. There also is a question mark, which is used to ask a questions. Knowing the difference is the key to writing properly. FYI. I would love to respond, but I just don't know how. Anyway, my life is based on the grey areas of the law. I use the grey areas of the law to conduct favourable business transactions, often at the expense of the other party. For example, buying a company, and then following the legal requirements when shutting down and moving south. And my law practice, like most law practices, is based on helping people using the grey areas of the law for their benefit. Look, the government routinely passes vague/grey laws, so that they can be interpreted by judges. The legal profession would not be so lucrative if the law was purely black and while. If you cannot understand that, they you likely have missed opportunities to make the law work for you.

  • Mark
    April 07, 2013 - 14:33

    I think that is a pretty biased article from the President of NL's Federation of Labour. First, this province does not need to be welcomed to austerity - it is already familiar with it. Second, how come Lana Payne does not mention the excellent terms of collective agreements that sent public sector wages sky-rocketing in the first place? Yeah, we hear a lot about the 2,000 positions that will be terminated. What about the thousands more that saw their base pays jump by over 40% in the last ten years? Did anyone hear Lana Payne and other union leaders cry then? Sorry lady, but you need to take the bad with the good.

  • Sick of being shafted.
    April 07, 2013 - 09:30

    Thank You Mr. Lucien Beauregard! There was another Mr. Beauregard who gave us much the same information 5 or 6 years ago, I heard him speaking on CBC Radio coaching Newfoundlanders and Labradorians to go after what was rightfully theirs from the Upper Churchill. Yes, indeed, when will the province of Newfoundland and Labrador be treated the way the other provinces are treated in Canada? It seems though to me there is no point in going through the Supreme Court of Canada since that has been tried several times and the ruling was always in favor of the way Ottawa wants the ruling to go and that is to favor Quebec, despite the unconscionable contract. The courts should not be controlled by government's desires and biases, that has to stop. It also appears to me that we have been bought off by Ottawa with a loan guarantee on the Muskrat Falls that will cost Ottawa Zero dollars. The project will provide electricity for running industry in Nova Scotia; and only God knows where-else. Also many people are lined up to feed like Sharks of the construction of the Muskrat Falls Project and that is because of the corrupt way businesses are allowed to operate in Canada, without impunity. This deal will cost the Newfoundland and Labrador Hydro consumer so much, that they will not only, NOT garner the benefits from the industrial jobs created, but also many of them will have to turn off their electricity and freeze in the dark because the electrical costs will be far too expensive for their budgets. Muskrat Falls is poised to bankrupt Newfoundland and Labrador with the proposed "cost over-runs". And that brings to my mind another question of "why cost-overruns", when so many Canadians are unemployed at the moment? It is an enigma, indeed! What an inequitable country we are dealing with, it sure is time for our politicians and our people to speak up!

  • Peter
    April 06, 2013 - 20:15

    This woman needs an education.

  • Lucien Beauregard
    April 06, 2013 - 16:16

    Could you tell me what Newfoundland ans Labrador is waiting to claim the six billions$ Hydro-Québec owe you ? On November 30, 2009, Mr Ed Martin, President of Churchill Falls (Labrador) Corporation ( CFLCo ) and President and CEO of Nalcor Energy, announced that CFLCo had asked Hydro-Québec to enter into negotiations on the Upper Churchill Power Contract pricing. Because of Hydro-Quebec refusal, on February 23, 2010, CFLCo files a motion in Quebec Superior Court against Hydro-Quebec to address inequities in the 1969 Upper Churchill Power Contract pricing So, in fall 2013, 48 months after first request, accumulated capital and compound interest ( 100 millions per month and 14.4 % per year), Hydro-Quebec will have to pay to Newfoundland and Labrador almost 6 billions $. Quite enough to pay Muskrat power plant and transmission lines up to Nova Scotia. Lucien Beauregard, P.Eng Quebec

  • Austerity is wrong
    April 06, 2013 - 13:20

    Rant warning: How come it always ends up on the back of ordinary people, while the real waste goes on. Some people don't want living wages for the public sector because others don't anymore? Is it a race to the bottom? Meanwhile, millions are being wasted outsourcing services that could be done in house for 1/3 the cost, the confederation building upgrade is $41 million and climbing, Muskrat falls already resulted in a massive 600M funds transfer, the Labrador highway is eating up millions and on it goes. It is like slashing toilet paper because you can't afford the mortgage on the McMansion. Furthermore, we don't share in the windfall profits of oil swings, there is no income stabilization fund for the budget, no common sense in government (just ask any public sector employee). This (and most governments these days) only serve business interests and see the public as a nuisance and implement things like Bill 29 to keep the sheep in the dark.

    • a business man
      April 07, 2013 - 10:48

      Welcome to today's lesson in supply and demand. As people more more money, it becomes the case that there is too much money chasing too few goods. So, as a result, the price will go up to address the increased demand. On the other hand, as people make less money, there will be less money chasing the same amount of goods, so the price will go down because there is lower supply of money. What this means is that as one group of people makes more money, those who already make more money will see the value/purchasing power of their money drop. The result is that my money is worth more in the market when other people get less money because their money is taken out of the economy. So for that reason alone, I support the cutting of the jobs. I hope this makes sense. And don't attack me because I really haven' t expressed a controversial opinion here. For the record, I am okay with public sector wages because I support the work of public sector workers. I worked in the public sector for a brief point prior to law. I think the cuts should be made elsewhere, but I will not stand up for these workers when the reality is that their displacement is beneficial to me.

  • Roy
    April 06, 2013 - 11:53

    Do the math.....One spot at ABE cost the taxpayer $50,000 per year per seat, Legal aid cost the taxpayer $250,000 per lawyer. The province is already broke. The estimates for the price of oil are already low. On Friday the price of Brent is less than estimated and we are 1 week into the new fiscal year. We have a bloted civil service who are paid at rates well beyond the industry average. There are too many civil servants and too many politicians. As a leader of the civil servants, Ms payne raises some good points but there is no more money.

    • Pam D
      April 08, 2013 - 07:53

      How did you come up with the ABE seat per year figure? The tuition at CNA is $726.00 per semester and about half that per intersession. That is no where near $ 50,000. I was an ABE student at CNA. I am two credits away from graduation and now I wonder what my future holds.

  • derrick
    April 06, 2013 - 10:28

    Instructors, archivists, probation officers, sheriffs, lawyers, librarians may have priced themselves out of the market, as a province with the average wage of 30K in the private sector, public workers have expected too much when compared to the productive capacity of the province.

  • Concerned
    April 06, 2013 - 08:40

    Lana, this was not an austerity budget it was a realistic one. The government spending is out of control and needs to be reduced. The discussion should be on priorities and muskrat falls. You have publicly supported muskrat falls and offer no alternative to cutting spending. I do agree with you that personal income taxes need to be increased. However your recommendation to increase corporate taxes to the oil and mining companies is reckless. When you consider the provincial federal and royalty regimes on the offshore projects we need to be competitive. Everyone compares us to Norway. But there is a great difference. Newfoundland is a very expensive place to due business. A big part of this is the very inefficient union environment. You should be a big part of helping to solve this problem the of government has put us in, however you must first acknowledge the unsustainable level of government spending directed to the various parties u represent. Everyone has a role to ply in solving this fiscal mess.

  • Pierre Neary
    April 06, 2013 - 08:38

    Harper has gone so right that he can't see the horizon anymore.