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Letter: The excuses have to end

I read with interest the commentary provided by Finance Minister Tom Osborne in the Oct. 31, 2017 edition of The Telegram (“NLEC’s ‘Another Way Forward’ ignores what’s working”). Minister Osborne’s comments are essentially the same as the ones given by his predecessors in previous administrations.

It is great the provincial government recognizes it has a spending problem. But it is not doing a lot to address it.

The minister states the spending problem did not happen overnight. But, as he will know, it did happen overnight. According to the government’s public accounts, expenses in 2009 were $6.1 billion, but by the next year, they had risen by $1 billion, or nearly 17 per cent. In fact, spending increased by 30 per cent between 2008 and 2010.

The minister argues the necessary reduction in spending would shock the economy and says there needs to be an evidence-based approach. Was this the same approach the government took when deciding to increase taxes and fees by $1,200 per man, woman and child in the province in 2016?

The minister states the spending problem did not happen overnight. But, as he will know, it did happen overnight.

The 2016 provincial Budget has been a true shock on the economy. According to Statistics Canada, there were 13,100 fewer jobs in September 2017 than in September 2016. The Cabinet Committee on Jobs has its work cut out for it.

If current trends continue for 2017, inflation will have risen over five per cent in the last two years, directly attributed to the 2016 Budget, because it certainly is not growth in productivity. For those on fixed or low incomes, it has become increasingly difficult to make ends meet.

A higher cost of living, an increased tax burden and fewer jobs mean Newfoundlanders and Labradorians have less disposable income to spend. As a result, it has become a struggle for small businesses to survive. Many business owners are working longer hours, with fewer staff, to control costs. But revenues are still not covering expenses, which is a recipe for trouble.

The costs of operating a business in Newfoundland and Labrador have risen significantly in recent years and there is no sign it will abate. The government touts the temporary taxes will be eliminated, thereby reducing the tax burden. This is partially correct. When the temporary deficit reduction levy is eliminated in 2019, it will be replaced by an increase in Canada Pension Plan premiums. The temporary gas tax is being eliminated, but that will be replaced by a yet-to-be-determined price on carbon over multiple years. Moreover, waste management costs will continue to grow, minimum wage is going to be tied to some economic indicator, and electricity rates will increase considerably starting in 2018.

It must not be forgotten that municipal budgets are going to be under immense pressure once the 2019 assessment data is completed. Many small business owners are likely to bear the brunt of that as well.

Business owners in Newfoundland and Labrador are collectively concerned and anxious for the future. The provincial government has no choice but to urgently deal with its spending problem. It is time to end the excuses.

 

Vaughn Hammond, director of provincial affairs
Canadian Federation of Independent Business
— Newfoundland and Labrador

 

 

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