Rainy days

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Another year, another provincial budget — but that’s where the similarities end. For the provincial Tories, it’s 2003 all over again — just like when the Williams administration was first elected, the current Tories are facing an empty bank account, public sector unions that are caught in the midst of negotiations, and there’s much less oil money in the kitty.

And that means layoffs, program cuts and, in the case of the current budget, another large deficit.

The government is saying that 935 public service jobs — including 250 vacant positions — will disappear.

The province will have only two school boards, one English, one French. There are many cuts.

This is the tough medicine that the provincial Tories were threatening last year, but which they seem to have sidestepped by promising a multiyear review of spending instead. Last year, we had so-called “prudent” growth, what then-finance minister Tom Marshall called “a reduced rate of spending growth” in the budget.

Prudent has turned out to be a big pit: instead of a $258-million current account deficit in the last fiscal year, the provincial government came in $430 million in the hole.

And still, despite the layoffs and cutbacks, the province expects to run an even larger, single-year, $564 million deficit.

That means if oil prices are at the $105 a barrel the government is forecasting, we will be over half a billion dollars more in debt 12 months from now, effectively shifting that half a billion dollars onto our kids.

But you can ask if the government has gone far enough — especially because, in 2013-14, the government will actually spend $138 million more than it did last year.

Some restraint.

It’s clear there had to be cuts.

In fact, it’s been clear to observers for years that the Tory administration was more focused on splitting up the province’s newfound oil wealth than it was on saving any of the cash for the rainy day that is obviously here.

We warned about this three years ago after the 2010 budget: “For a government that prides itself on driving without brakes, there have to be occasional concerns that we’re using the capital we have in a headlong race towards a financial brick wall. … (The province has had) increased spending of 51 per cent in just seven years. … When, exactly, is it time to apply the fiscal brakes?”

We had the same warnings after the 2009 budget — and after the 2008 budget, when we pointed out the clear risks of having 37 per cent of revenues coming from oil. Those same warnings have come from several quarters for years.

We could keep going, but you get the point.

These woes have been a long time coming, but they have come home to roost.

Here’s a fact: it’s far easier to govern when the money is rolling in, and when the budgetary process is merely limiting the number of things you’re saying yes to — and the current government said yes to a lot.

You’re also far more popular then.

This is when governing gets difficult.

Let’s see how the government faces a different kind of reality — and what its members actually have the stomach to live with.

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Recent comments

  • Jon Smith
    March 27, 2013 - 10:02

    What Newfoundland and Labrador needs is a smart government, a government that will engage Quebec in negotiation not go around them, that will engage the federal government not ABC them and cower down from them, spending $ 5 billion to go around Quebec with a power line is not smart, making the people the captive payers of higher power rates is not smart, giving power to a province for free for 35 years is not smart. Look at the recent budget of New Brunswick whose deficit is less and the debt is lower per capita yet they do not have any oil revenues. Have not can be no more only is the government gets smart - spending in excess of $20 million for a lift feature on a bridge at Placentia is not smart. We have two choices: get smart and get well off or do stupid things and stay dirt poor-we'll have to wait and see.

  • Wally
    March 27, 2013 - 08:39

    I remember seeing in the news when Danny came home with the cheque - "we got it". And every lobby and special interest group came with their hands out wanting a piece of it. Every corner of the province demanded it's share of the oil wealth and the government was more than happy to spend like there was no tomorrow. For politicians there are no tomorrows. They know their time is short. They run up large debts because they know when it comes time to pay up that it will be someone's else problem. We are active participants in digging this province into a hole. Nothing has changed but the size of the purse. We do get the government we deserve.

  • Cyril Rogers
    March 27, 2013 - 08:07

    Calvin, you are correct in that politicians are largely the same but this worn-out administration is still harping back to the former Liberal governments that had no oil revenues when it suits them. They can't ignore the reality that all of the big money from oil came after 2004 and they are the ones who had FULL control. Explain that away, please! They spent like drunken sailors, with no thought for the future, and did not have the intestinal fortitude to tell people that money needed to be put aside for the future, all because DW and his minions wanted to keep the love fest going!

  • Calvin
    March 27, 2013 - 07:41

    So, if the government spends money they are wasting our wealth. If they don't spend money then citizens figure they are not providing essential services. If they do it half way then the opposition figures they don't know what they are doing. As is always the case in politics, you can't please everyone. The part of it all that cracks me up is that people figure it would be different under the Liberals or NDP. You can paint a politician any color you like, but they are all one and the same in the end.

    • W Bagg
      March 27, 2013 - 10:18

      so there is no difference between Williams government and Dunderdale's? IS that what you say Calvin?