By mid-April the Provincial Government would not have had sufficient cash to meet its payroll or send cheques to the plethora of people, businesses, and organizations who rely upon them to pay their bills, unless the Governor of the Bank of Canada intervened.
The debacle of insolvency now greets all the people of the province at the worst possible time - during a health pandemic and a global economic crisis. I suspect that no one needs to hear the historical parallels – economic or political – with the 1930s. I will save you the imposition.
No one should greet the news with surprise, however. The Finance Minister, Tom Osborne, let the cat out of the bag in the second week of March. The collapse of the global price of oil, exacerbated by COVID-19, suddenly found the Minister giving gravitas to the phrase “perfect storm”. The facade of invincibility, long displayed on the public media, had dissipated; the false bravado of Budget battles, never fought, too.
You could “smell” what the Minister was thinking. There is nothing quite as odorous as the smell of fear. The Minister knew that the “jig” was up; he had just realized that he was the unlucky Finance Minister, the one in a long succession of hapless Finance Ministers who collectively had brought the province to its fiscal knees. The motley cowards dated back to the Administration of Danny Williams; the feckless and the reckless enjoined. Trumpian unctuousness is about to exact a terrible price.
The legend of “Danny” is full of reminders of massive wage increases and an explosion of helpers within the public service. It is a tale of $5 billion provincial money squandered on Muskrat– along with $8 billion more - enough to fight a dozen pandemics. That's where you will find the origins of excessive debt and unparalleled deficits. It’s just that no Premier and no Finance Minister after him could tap down their own egos, or cure the worst effects of his. None could wheel back the public's sense of entitlement either. Politics found no room for leadership; the awful vacuum affording only room to up the ante.
Premier Ball was one of the worst culprits. Imagine a province with the highest per capita revenues in the Country bankrupt; five years of dither his only legacy. The whole Liberal Caucus looked on. Their gutlessness will hurt more than any virus.
Osborne was about to report the seventh billion dollar plus deficit Budget in a row – or was it the eighth – I’ve lost count. I wonder if it dawned on him that the “lucky rabbit’s foot” which had sustained the unbridled profligacy of his predecessors - Cathy Bennett, and Tories, Tom Marshall, Jerome Kennedy, Ross Wiseman and Charlene Johnson - had been rubbed raw.
Aw shucks, “sure there’s lots of oil out there”, the worthies at the Board of Trade guffawed; the cocktail circuit’s enthrall. Geology and markets bowed to their foresight...but only if you believed.
NAPE, CUPE, the Municipalities played along; it wasn’t their job; heaven forbid that “leadership” should interfere with vested interests.
For how long will the Bank of Canada back the otherwise unsaleable bonds of this Province? After the health pandemic recedes, what then? Can we keep on spending, hoping that Canada will turn a blind-eye? Is the Muskrat Falls fiasco still our problem; ergo, we should pay? How much pain can bravado endure? And, what is the amount needed to balance the books….I mean…after Muskrat Falls mitigation?
There are a hundred such questions. Today is just not the time to answer them. But we will need to - soon.
Now is a time to self-isolate, to maintain “social-distancing”, to keep healthy and in good spirits. We need to beat COVID-19.
Still, something is bugging me. And it’s not ‘just’ that successive irresponsible Administrations have waltzed us over a fiscal cliff or that the very thought terrifies me, makes me furious and sad.
Perhaps, it’s that the very same crowd who said that they had a grip on the province’s finances for the past five years claim to have a handle on this pandemic, too!