Get out the scissors

Published on January 18, 2016
Russell Wangersky

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.”

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.