25 May 2012

The Perfect Storm #nlpoli

“In the fishery of the very near future,” SRBP wrote in February, “fishing subsidies like federal employment insurance wage subsidies,  state-sponsored marketing schemes and the stalinist political control of the economy… will all go by the wayside. International trade talks are already laying the groundwork for massive change.”

The very near future arrived this week.

On Wednesday, the provincial government announced that it would fund a series of make-work projects, the way it always has, so that hundreds of men and women  tossed out of work by the closure of fish plants across the province can qualify for more unemployment insurance.

The release stated:

These opportunities will provide timely assistance to those whose employment insurance claims are about to expire.

The provincial government’s plan was simply to continue the policies that produced the economic mess in the fishing industry in the first place.

But on Thursday, the federal government announced changes to the employment insurance program.  As the Toronto Star reported:

Frequent claimants [- who have had three or more claims for regular or fishing benefits and collected benefits for a total of more than 60 weeks in the past five years –] would be required to expand their job search to jobs similar to the one they normally perform at the onset of their EI claim (one to six weeks) and accept wages starting at 80 per cent of their previous hourly wage. After receiving benefits for seven weeks, they would be required to accept any work they are qualified to perform (with training, if required) and to accept wages starting at 70 per cent of their previous hourly wage.

So much for the provincial government’s brilliant plan.

Change versus more of the same

It’s not like the politicians  didn’t know the fishing industry needed to change. Scientists warned about it. Journalists warned about it.  Provincial politicians  - including people like Lana Payne and Earle McCurdy - have been talking about fisheries reform or fisheries restructuring for decades.  Talking about change is all the politicians could manage, though. 

But talking about change is not the same as changing.  While they talked a lot about change, what the the politicians actually did was carry on with more of the same.  In April, for example, fisheries minister Darin King announced more subsidies, pork and patronage for the most desperate part of the industry, the seal fishery. In 2011, when the industry leaders themselves agreed on a way to change their industry,  the provincial government balked.

It’s the economy

The news release announcing the make-work projects talked about economic development and helping workers find new jobs:

“Opportunities exist for displaced workers,” said Minister King. “Our government will help displaced workers transition during this difficult time. We will encourage economic development initiatives that may provide new jobs in regions where fish plants have closed. We will work with all stakeholders to help ensure a positive outcome from the unfortunate circumstances that have occurred in recent months.”

Eight years ago, the provincial Conservatives came to office promising jobs.  Eight years later, the same provincial Conservatives are talking about what will happen.  The opportunities do not exist already if the provincial government will do something only now and in the future.  One must wonder what they have been doing since 2003. 

Talk in recent days that the province’s last paper mill may close underscores the increasing fragility of the provincial economy. What really drove the point home, though, were the sections of a report on what the mill closure would mean for a major hydro-electric project that is the centre-piece of the current provincial government’s agenda.  As the report noted,  there are only three major industrial electricity users on the island portion of the province of which the mill is the largest. Another – a mine – is slated to close in 2013.  There are no other industrial users due to start operation after Vale’s smelter-refinery at Long Harbour starts operations in 2015. Other than that, there are no economic development prospects “in regions where fish plants have closed” that could employ the laid off workers.

Add to that an aging population, federal-provincial relations that have never been in worse shape, and a provincial government that is facing tight budgets.  They come together to form a rare combination of political and economic turmoil, a perfect storm that will test the province as surely as any crisis in the past.  What makes the current crisis stand out, though, is that so much of it was avoidable.