Remember that right from the start Bond Papers pegged this latest Equalization flap as a way of pretending that whatever fiscal mess the government is in, the whole thing is really someone else’s fault.
Now for those who don’t know, monkey-tossing is one Danny Williams’ great political skills. If they gave gold medals in tossing the monkey from his own back, Danny Williams would own them all.
He tried to toss responsibility his own failure in the Andy Wells/Max Ruelokke affray. For those who are keeping score, incidentally, it’s worth taking a look at the judge’s decision in that case. The number of times the provincial government changed its position in the case rivals its multitude of contradictory stands on on Equalization.
He monkey-tossed the whole smelter in Long Harbour a couple of years ago, although hat one is still a wee bit odd.
Now it’s the whole $1.5 billion.
Look at how the Premier puts the thing in a letter to the National Post on Saturday.
Guaranteed by now the thing has been blasted over the plant internal comms system such that come Monday every single one will be talking - on the open line shows and anywhere else plants turn up - about the recent federal offset changes as if the impact comes entirely in one year:
Not in our most pessimistic moments did we dream that we would be negatively impacted to the tune of $1.5 billion — approximately one quarter of our annual provincial budget.
The thing is: that statement isn’t true.
The provincial budget was short for the coming fiscal year by $1.5 billion before anyone learned about the Equalization/offsets thingy.
The loss represented by the offset changes – even if we accepted the provincial government assumptions and projections - would be a little over $400 million in 2009. That works out to be six per cent of the 2008 budget and, as we’ve said before, it’s not even a real number. It’s entirely made up base don a raft of assumptions which might not turn out to be true.
What is true, as it turns out, is the Bond Papers prediction over the past few months that the provincial government is facing a $1.5 billion shortfall on the annual budget.
That is about 25% of the upcoming budget.
The culprit? Oil mostly: down a billion next year over last year using an assumed value for oil in the mid—50s Canadian. Incidentally, for all accounts that is exactly what the provincial government is currently using for their estimates.
The other culprits?
Well, you can hack off another few hundred million for the collapse of mineral prices.
Then, there’s the impact of tossing 1,000 highly paid paper workers to the curb.
On top of that there’s the 4,000 or so migrant labourers who were making Alberta money but now will have to subsist on the earnings from Lotto 10-42. Notice that the downturn in the oil sands alone is having four times the job impact in Newfoundland as Abitibi.
That means fewer purchases and hence a drop in sales tax. That means a sizeable chunk of income tax revenue will disappear.
By the time you add it all up, the provincial government is in the financial hurt locker: expenses as big as 2008 – around $6.0 billion - and the income from 2004 – somewhere around $4.5 billion.
No wonder the Premier is trying to toss that monkey off his back.
In 2004, he could toss the fiscal monkey onto the shoulders of the crowd who’d been in office.
He did.
He also tossed the cost of cuts onto the backs of the province’s public sector workers.
The Premier could monkey-toss for England.
He does it all the time.
-srbp-