About four years ago, your humble e-scribbler pointed out a fundamental strategic problem with the way the provincial Conservatives spent money.
The premise was pretty simple: at the same time that we knew - as a matter of irrefutable fact - that provincial costs for things like health care were going to skyrocket, the provincial government wanted to start building megaprojects.
In 2008, we were just talking about Hebron and the few hundred million dollars. We didn’t know and still don’t know how much the final costs will be. That was before the Premier and other ministers acknowledged provincial spending was unsustainable. That was also before the global recession.
It was before the provincial Conservatives wanted to spend upwards of $10 billion on a hydro-electric project that won’t produce any revenue outside the province. And it was way before those same Conservatives decided to embark on a decade long period of public sector job lay-offs and spending cuts. Well, at least, that’s what CBC reported on Thursday night that the Tories plan to do. They were reporting on what finance minister Tom Marshall told the St. John’s Board of Trade at a luncheon speech..
If anything, that 2008 series of posts about the precarious provincial financial position understated things. Things are so bad that even Wade Locke had to warn his political friends in the Conservative Party that they needed to deal with the problem. Locke had this to say in 2011:
“It gets progressively worse as you go out, from five years onwards,” Locke said. “The next five years, it’s manageable, but after that it gets less manageable if we don’t start dealing with it now.”
…
“There is a a serious problem in terms of debt and deficits,” Locke said. “I understand that people believe that we are a ‘have’ province, which we are technically. However, they then believe that there’s unlimited money to address all of our needs and wants. That is not true.
People in Corner Brook are worried that the provincial government is going to have problems building the new hospital they promised in 2007. They were supposed to start construction this year but, as it now appears, they won’t be ready to start work for at least another year.
People are nervous. The politicians are more nervous. You can tell they are nervous by the way Tory politician Vaughn Granter shat massive, enormous, huge bricks on Twitter Thursday night.
If he could, Granter probably would have used a 72 point font in addition to the capital letters to make sure everyone knew just how enormously, massively complicated this hospital project is.
Huge, it is.
Bigger than humans have ever done before on the planet.
People on the island’s west coast won’t be persuaded by Granter’s amateurish horseshit. In fact, no one would be surprised if his nervous tweeting and the same sort of foolishness in person only served to increase public anxiety about the hospital.
Of course, as people start to realise the way all those big economic things are coming together, the provincial Tories will have a harder time persuading people that the hospital and other projects aren’t at some risk. It’s not like the Tories can avoid building something in Corner Brook. They need to replace Western Memorial Hospital. But that doesn’t mean that they will build the hospital they promised in 2007.
It wouldn’t take much to make the current tight financial situation all that much worse. Drop the price of oil at the same time that - as we know - oil production will drop off over the next decade. Drive up the cost of Muskrat Falls at the same time. Nothing radical and nothing at all unusual. Then think about building a hospital project that they said would cost the better part of a billion dollars before they started building it.
Then think about all those projects that were far less complicated, as Vaughn Granter would tell you, than the new hospital. Think of a small aquaculture office building, for example. Announced in 2007 to be finished in 2009. They didn’t start construction until 2009 and by the time they turned the key on the front door, the cost was more than double what they estimated originally.
Hospital in Labrador. Started at $56 million. Hit $90 million and still counting on a project that has actually been longer in the “planning” stage than the one in Corner Brook.
That’s a 60% increase in cost, incidentally. Sixty percent is the low end of provincial government cost over-runs, these days. So if, by some estimates, this Corner Brook hospital started out at $750 million, think of how much it might really cost. $1.5 billion wouldn’t be outrageous. $1.2 billion would put it on par with the Labrador cost over-run.
Now go back and lower the price of oil, increase the cost of Muskrat Falls and do all those other very likely things. The more people like Granter talk up the enormous cost and the complexity of the hospital and the longer they delay getting it started, the more likely people are to worry.
And it’s not like they weren’t worried already, before the politicians started protesting too much in their denials about a problem in Corner Brook.
- srbp -