Monday’s sunshine brought the streets of downtown St. John’s to bustling life. Despite the oil slump and the impacts of an austerity budget, some businesses in Newfoundland and Labrador are feeling cautiously optimistic — at least for now.
But at least for the moment, rumours of the province’s economic demise may be a bit exaggerated.
“I think tourism is going to save my neck, personally, but I’ve got to be ready for next fall, and next winter, because it’s going to hurt,” Butt said.
“The chickens haven’t come home to roost yet.”
In the wake of the April provincial budget, there was plenty of talk about the economic fallout of layoffs and across-the-board tax hikes. Opposition parties have especially fretted about the “supplemental” budget coming in the fall, which is expected to implement widespread layoffs and cost cutting by the government.
NDP Leader Earle McCurdy has said he believes there will be real economic wreckage, as people hold on tight to their wallets, waiting for the other shoe to drop.
But that doesn’t seem to be happening just yet.
Especially in the tourism business, things are strong right now. Dion Finlay, chairman of Hospitality N.L., said that with upgrades to the airport and an expanded convention centre, bookings are pretty good.
It doesn’t hurt that the American dollar is strong right now, either, and if people locally are feeling the pinch, maybe they won’t travel out of the province.
“Sun is shining, summer is here, people are looking forward to taking some time back,” Finlay said. “So because of currency, maybe they’re not going to fly south. Because of increasing costs, maybe they’re not going to fly off-island. They’re still going to take their holidays.”
More broadly, Des Whelan, chairman of the St. John’s Board of Trade, said things are not totally grim within the business community.
“Things are not as bad as maybe we thought they were going to be,” Whelan said. “We’ve got, probably, a couple years of a tougher situation in front of us, but what we’re hearing from our members is that they’re prepared to go the distance. They’re prepared to be resilient, be adaptable.”
He said the Board of Trade is focusing on helping businesses diversify by expanding outside the province.
But Whelan said there has definitely been a huge amount of talk about the provincial budget, and the economy. That’s a sentiment echoed by Newfoundland and Labrador Employers’ Council executive director Richard Alexander.
“I’ve had probably about 60 calls from 60 different businesses, and all they want to talk about is the last budget, and the magnitude of the tax increases,” Alexander said.
“Now, the level of concern around the political will of this government to reign in spending — which is what they’ve said they’re going to do in this mini-budget — that’s where the conversation is starting to change now.”
Both Whelan and Alexander said business is worried the government won’t make the painful choices necessary to limit the budget and cut spending.
Stephen Hayward, chairman of the Newfoundland and Labrador Construction Association, also said that while there’s been a lot of talk about the budget, so far it doesn’t have his industry panicked.
“Really, on a day-to-day basis, we see that the government has to expend a certain amount of money when it comes to infrastructure anyway, so we don’t necessarily foresee the budget as being a negative for business, as such,” he said. “I think everybody is more concerned with the budget from a personal point of view, and what it’s going to mean for your own wallet or pocketbook at the end of the week.”
Twitter: TelegramJames
