Monday, a Carleton University business professor had a harsh message for people in this province: within a decade, Newfoundland and Labrador could be looking at bankruptcy.
“I can’t see this ending (in) anything but an urgent request at some point by the government of the day of Newfoundland and Labrador to the federal government saying, ‘Look, you’ve got to step in and help us,’” business professor Ian Lee told CBC News.
Many have argued that this province’s finances are unsustainable. What they haven’t argued is that we might have done something about it.
Let’s turn the clock the other way: instead of looking forwards, let’s look a decade back, to 2007.
Even then, the government of Premier Danny Williams knew the good times wouldn’t last. Here’s Finance Minister Tom Marshall, before delivering the 2007 budget, talking about oil revenues: “I have to make the point that these resources are non-renewable. … This can change. The prices of everything could go down tomorrow. Production levels can change.”
Many have argued that this province’s finances are unsustainable. What they haven’t argued is that we might have done something about it.
“It’s not going to last forever,” Marshall continued. “But we have to be prudent and careful while it is lasting. We have to take advantage of it, and we have to do exactly what we’re doing — reduce our debt, diversify our economy, and make the strategic investments.”
So did we?
No. Despite his own warnings that oil money was finite, Marshall’s plan was spend, spend and spend.
“Finance Minister Tom Marshall delivered arguably the most generous budget in the province’s history Thursday,” our news story said on budget day 2007. “It was a document that contained unprecedented tax cuts for individuals, significant infrastructure investments, increased social spending and new initiatives to stimulate and diversify the economy.”
It was an election year. A chicken in every pot meant a vote in every district, so the government delivered big spending.
“The provincial budget this year is labelled ‘Vision, Action, Budget 2007,’ but it could much more easily have been called, ‘Right Place at the Right Time,’ or for the more cynical, ‘Vision, Action, Election,’” we wrote in this exact space. “Leading into this fall’s election, the provincial government is forecasting an increase in oil revenues of some $600 million, and is preparing to spend a good chunk of it on a provincial tradition: cashing up the electorate.”
On budget day a decade ago, Marshall once again forecast the future we’re now living in, saying, “If we end up in a situation where those resources are gone, and we’re back to where we were with a heavy debt, we’re going to be in big trouble.”
We had options. We knew about the risks. We chose this particular future, because Newfoundland and Labrador politics works the way it does.
And we shouldn’t ever forget that.
