IS IT POSSIBLE TO ELIMINATE THE DEFICIT IN NL?

Guest Post by PlanetNL

PlanetNL33: Deficit Elimination? NL is Too Far Gone

A Pessimistic Interpretation of the Greene Report 

Moya Greene’s “Big Reset” Report, the final product of the Premier’s Economic Recovery Team, has done a dashing job of showing exactly where and how to eliminate this Province’s deficit plague.  Well done, let’s get started, right?  Not so fast.

Upon consideration of the underlying issues, the prescribed budget cuts and taxation increases will face insurmountable challenges.  It is clear upon second reading that Greene chose her numbers despite their improbability - she has developed a plan on paper that is impossible to deliver.  If this were a business plan submission, she has failed because there is no consideration of the many execution challenges.

The Report is not a failure, however, in the sense that it now makes our problem much clearer to see.  The financial state of the Province is well beyond any remedy that can be devised independently as a Province.  The Report does successfully show that insolvency is indeed at our door and there is no solution other than for the Federal Government to step in and help clean up the mess. 

Self reliance or Commission of Government? The choice is ours.

Guest Post by Ron Penney 

I don’t really think we will have the second Commission of Government, it will likely be some faceless federal bureaucrat in the bowels of the Confederation Building managing our finances. We may retain the fiction of responsible government with none of the powers. 

The Greene Report has for the first time added up all our debt and busted this artificial construct of net debt, mandated by the arcane rules of the accounting profession. The amount is staggering: $39 billion, $12.6 billion added in the past 12 years. And when the unfounded pension liability and other exposures are added in, it goes up to $47.3 billion,  $215,000 for each household in the province. 

Cash deficits have averaged $1.9 billion over the past 7 years. 

Who’s to blame? 

THE "BIG RESET": TIME TO WAKE UP. TIME TO ACT.

Summary

The PERT Report, titled the “Big Reset”, authored by Moya Greene, has been already greeted with derision by labour and others in denial. A public debt of nearly $50 billion seems still insufficient proof that the economy can never thrive by “spending our way to prosperity”. 

Let's face facts. NL is effectively insolvent. Greene’s proposal to lower spending by around $1.4 billion is a best case scenario - not the likely one; the likely one is far worse. When the challenge is so large, and the options so few, any plan of repair is devastating. 

Moya Greene can't be faulted for this; any deficit of her making lies in the fact that she wrote 338 pages and another 67 pages of executive summary to convey the team's ideas. Five pages of straight talk might have been more effective. As it is, the focus of the Report is diverse; some important issues are not addressed clearly enough. 

MOYA GREENE'S (DREADFUL) ECONOMIC RECOVERY (YOUTUBE) RELEASE

The only important thing that the public should do right now is become informed of what Moya Greene and the Premier's Economic Recovery Team (PERT) are proposing. That is why I am providing a Link to Greene's remarks. It is always better to hear it for yourself rather than through someone else's lens. 

I have only begun examining the PERT Report. So far, I  am disturbed by much of what I am reading. I am hoping to be able to wade through this blizzard of buzzwords layered with a misunderstanding of the social and economic impacts of the fiscal measures (cutbacks) proposed. On Monday I will offer my view of what, so far, I have concluded is someone's fanciful (green) version of Danny Williams' energy warehouse. Until Monday. - Des Sullivan

HOW SEAMUS O’REGAN HELPED WRITE FUREY'S THRONE SPEECH

If you were looking for an adage that perfectly describes the lost opportunity represented by the recent Speech From the Throne, it is this: “You cannot solve what you don’t understand.” Otherwise, think of the Speech as the new fairy tale economic narrative, "sunny ways", spun by the city-folk of Central Canada, with the inspiration of the PM. 

At the outset, the Address by the Lieutenant Governor, read at the start of each new Session of the Legislature, is commonly laden with regurgitated bureaucratese, rather than a strong message of intent describing the Government's "thinking" and its priorities. This time, while mercifully brief, the Speech was long enough to confirm that the Furey Administration has not a clue about virtually anything. 

It is fine to look for expertise from Dame Moya and her Committee, or to Dr. Pat Parfrey and Sister Elizabeth Davis. They are specialists on whom Government relies to define a path and help guard against the Administration going off madly in all directions. But when the Government embraces a version of Canada that is at best fanciful, offering no grounded view or recognition of the raison d'etre of the Province over which it governs, or why the economy is structured as it is, Greene, Parfrey and Davis are just swimming upstream against a current certain to drown their best efforts, and our essential livelihoods, too.

NL NEEDS MORE THAN AN ECONOMIC RECOVERY PLAN - ECONOMIST

I wish to express my gratitude to Kam Hon Chu and Policy Options for giving me permission to republish this much needed Paper dealing with NL's existential fiscal crisis. 

- Des Sullivan

Newfoundland and Labrador needs more than an economic recovery plan

by Kam Hon Chu. Originally published on Policy Options
April 19, 2021

Now that the dust has settled after the election in Newfoundland and Labrador, attention shifts to the Premier’s Economic Recovery Team (PERT), with the release of its final report just around the corner. The mandate of PERT is to come up a comprehensive plan to address the province’s ballooning debt, deficit and expenditures.

The economic recovery plan is important not only to Newfoundlanders and Labradorians but also to all Canadians because its policy recommendations will certainly affect the welfare of N.L., and a failure to avert a debt crisis there would have adverse spillover effects on the rest of Canada.

REMEMBERING JOHN TUACH (1950-2021)

Newfoundland and Labrador lost one of its finest last Sunday. John Tuach, geologist, consultant, promoter of Newfoundland’s mineral and mining sector, writer, poet, musician, and gardener, passed away on Sunday, April 18th, 2021.

Known on this Blog as the “Bard of Pynn’s Brook”, he was to the mining and exploration industry simply as “Tuach”. His was a sharp mind grafted onto a wonderful wit which enhanced a view of the world that belied frankness and honesty.

His notions of independence and self-reliance were iron strong. He was a “Scot” for god sake - born in Ullapool Scotland. Ancestry is one thing, however, but he was possessed of so many talents he could only have been successful.   

University studies in geology brought him to Newfoundland. Like many geologists, his career began in Baie Verte, the Peninsula then the mining capital of the Province. Tilt Cove, Advocate, Rambler/Ming Mine, and others located just up the road, near Springdale, notably Little Bay, Whalesback and Gullbridge, which, taken together, offer a sense of a vibrant geological region that has long attracted exploration, industry, and academic interest, and still does.

WANGERSKY, PLEASE DON'T GO

During his long career at The Telegram, Russell Wangersky has commented upon — and quoted — people from a broad spectrum of society. He has given voice to the gamut of viewpoints, running from wisdom to nonsense; yes, even the wide berth that separates Voltaire and Danny Williams.

Quoting the eighteenth-century French philosopher and writer: “If you want to know who controls you, look at who you are not allowed to criticize.” The local scribe was suggesting that, “in these sensitive times, it feels safer to use someone else’s words as a buffer.” He was being only a little facetious. He didn’t invoke Williams’ name in the piece, but he didn’t need to.

While some critics dislike the lashings of one schooled in the sublime arts, Wangersky was never intimidated by bombasts. The Telegram columnist reminded us on one occasion, as the Muskrat Falls Project ran amok, of a parable elevated to the status of gospel by Williams’ fan club, the St. John’s Board of Trade. “That’s the very nature of megaprojects,” Williams told them, adding, “You can’t make excuses for overruns, but by the same token they’re a fact of life and they happen.”

HOW THE HIGH COURT REFRAMED CANADA'S CONSTITUTION (and almost no one noticed)

The Supreme Court of Canada’s (SCOC) Decision to validate the Federal Government’s carbon pricing legislation as constitutional, went far beyond that singular issue. In the process, the High Court arbitrarily shifted enormous provincial powers confirmed under s. 92 of the Constitution, to the Government of Canada. (SCOC Reference Greenhouse Gas Pollution Pricing Act found HERE.)

If anyone is concerned about the fundamental structure of the Country – which is not just “federal” but “confederal” - much of the power held by the founding provinces remained with them - they will give the Majority Decision of the Court critical attention; the issues involved are inseparable from our identity, as Canadians, and critical to how the Country operates, too.

Unfortunately, such issues often seem so esoteric that they cause glaze over the eyes of some people, the word “constitutional” alone indigestible. As a result, we are prone to leaving the issue to lawyers, which is unfortunate because they are not a representative sector of society.

ELECTION 2021 INDUCES AN URGENT NEED TO YAWN

 First, we should extend congratulations to Premier Furey on his election victory and wish his new Administration every success. It remains to be seen if he is ready for the challenge that awaits. This is a matter to which we will return.

Opposition leader Ches Crosbie and NDP leader Alison Coffin, both having lost their Seats, deserve our appreciation for the important work of Opposition, too. It is the end of the road for Mr. Crosbie’s undistinguished political career. As to Ms. Coffin, the loss of a “core” NDP Seat must hurt. Other pundits may wish to analyse why the “rubber booters” voted heavily Liberal this time, but the Party might also want to reflect on their relevancy in a Province with three left-wing Parties, a situation — for the other two — born less out of ideology than opportunism.

Premier Furey told reporters that the election is about “Who you want to lead the province through the pandemic. Who you want to lead it through the economic challenge. Who you want to sit at the table with the federal Liberal government…” His election call disregarded the pandemic and gave little reference to the debt crisis. That left only the “Feds”.

From this perspective, it isn’t so much that Furey won more Seats than either Ches or Alison. In the end, it was “hope” that prevailed. Having failed to offer a “hundred days of decision”, the electorate were content with another four years of dither, not that Crosbie had a different agenda.