On Thursday, the Newfoundland and Labrador Employers’ Council (NLEC) released “Another Way Forward,” which they dubbed as an alternative to government’s fiscal plan. As minister of Finance, I felt it was important to address some of the issues we, as a government, have with their paper exercise.
The NLEC has presented a regressive and polarizing approach to fiscal management. When we took office, we were told that without immediate and significant action we would face a $2.7-billion deficit. The NLEC plan would reverse course on fiscal actions that helped reduce the annual deficit to $1.1 billion, clawing back over half a billion dollars in revenue measures in order to stop “driving people away from our province.”
Instead, the NLEC suggests we create fiscal room by rolling back wages in the public sector, particularly for health-care workers. The NLEC doesn’t express concern about driving these workers away or reducing their spending power.
Moreover, the plan marginalizes the importance of health care in our province. We have a responsibility to provide better care through better management. To achieve better outcomes, we must think differently.
The NLEC has ignored the progress that has been made on some of the very things they have criticized.
The NLEC states that health care isn’t all about bricks and mortar. We agree. That is why we are undertaking an eHealth initiative, shifting focus from treating sickness to preventative care, providing care in the home and community where possible and improving our use of technology for providers and patients.
My biggest concern about the NLEC’s plan, however, is everything it ignores.
The NLEC has ignored the progress that has been made on some of the very things they have criticized. They call for the immediate removal of taxes that have been widely publicized as temporary. The temporary gas tax has already been reduced by 8.5 cents this year, with a further four cent reduction on Dec. 1. The temporary deficit levy has a set timeline and legislation is already in place to remove it after the 2019 tax year.
The NLEC also ignores the facts that show our approach is working.
We have curtailed growth in spending while making strategic investments to leverage federal infrastructure money. Our infrastructure plan includes $3 billion over five years and will help create 4,900 full-time jobs annually while contributing to important infrastructure developments in communities. We have helped create thousands of jobs through partnerships with Husky, Canada Fluorspar Inc. and Provincial Aerospace, among others.
We understand that economic development and supporting job creation is not achieved by a single department or agency, but that it requires the sum of government working together. That is why we created a Cabinet Committee on Jobs, which has announced recent partnerships in the aquaculture and agriculture sectors that will diversify our economy and create new employment opportunities.
Our plan is fair, measured and balanced. We are exercising strong fiscal management and delivering programs smarter and more efficiently. We have made progress, but I recognize and have said that more needs to be done.
The NLEC plan would shock the provincial economy and put our fiscal position at greater risk. They are being alarmist by suggesting that our fiscal plan might lead to a federal bailout. Our fiscal measures have garnered support from all three credit rating agencies.
I have been clear in saying that we have a spending issue that must be addressed. On that point the NLEC’s Richard Alexander and I agree. But we didn’t get into this problem overnight, and our road back to prosperity must be evidence-based and must balance the interests of all taxpayers, employers and workers.
Many issues raised by the NLEC are well-documented and are factored into our plans. Their view of our fiscal plan oversimplifies a complex issue, and ignores unique challenges we face in delivering services to a small, diverse and aging population with infrastructure that is aging. We can fix this, but rather than taking an approach that pits employers versus workers, we need to work together to achieve better solutions.
Good governance is being able to weigh the outcomes of decisions that are being implemented. This is why we need a balanced approach in our way forward.
Minister of Finance