FISCAL CRISIS BIGGER THAN ACCOUNTED FOR IN EMPLOYERS' COUNCIL PLAN

“Another Way Forward” is a policy document recently released by the NL Employers’ Council. It is a response by the province’s largest business organization to our desperate fiscal crisis. It purports to contain suggestions for a “better way forward” than the one released last year by the Ball Administration.

High on the agenda of the Employers’ Council is a reduction in taxation on both business and individuals, cuts to government programs and services, and a reduction in public sector employment by attrition. 

The NLEC concludes that “government could remove more than a billion dollars in spending and we would still have:

1.       the largest spending per capita

2.      the highest paid public service and

3.      the highest spending on health and education of any province in Atlantic Canada.”  

THE 'ADVISORS', 'BOOSTERS', AND 'SHILLS'

Last week the Minister of Finance confirmed what everyone knew: lower oil prices are a wrecking ball for the 2014-15 provincial budget. While no one forecast $60 Brent crude, equally we should not be surprised. Events such as this have long been a feature of resource based economies.

When we say commodity demand and prices are ‘cyclical’ that doesn’t mean they go up and then go up further.  Prices fall, too, often hard and precipitously. Anyone who has invested in the stock market has felt the euphoria of conquest. But nothing always stays the same. When the market turns, the whiplash of price swings guarantees that those having danced with, and perhaps married risk, get stung. The markets do not discriminate between the well-intentioned, the prudent and the foolish.   

The word “prudent” made its way into the Finance Minister’s budget update. Said Ross Wiseman, “In the shorter term…we have to be prudent and adjust our oil price forecast for the remainder of this fiscal year.” The word has no meaning for this Minister; short or long term.