This pretty picture shows a very ugly problem.
All that space in between those two lines is debt. It is either borrowing from the banks and other lenders or it is borrowing from ourselves through spending all our one-time oil money. If the government spends as they indicated in the budget, about two thirds of that gap on the far right is borrowing from the banks. One third is from oil money.
Just for a bit of fun, let’s project ahead into the future a bit to see what might happen. We’ll use the oil price projections the government used. And we’ll use the most recent oil production figures from the offshore board. You might be surprised at the results.
Not that we didn’t know the provincial government had already granted exemptions to its supposedly sacred minimum fish processing requirements, but CBC this week gave us an insight into just how often the government has waived the MPRs.
In 2010, the provincial government approved 11t exemptions out of 19 requests. In the last six months of 2014 alone, it approved 27 out of 29 requests.
That’s quite a jump.
The wild spurt of exemptions came at exactly the same time - ironically enough - that Premier Paul Davis was insisting that MPRs were an essential part of the government’s efforts to keep fish processing jobs in the province.
They were so important that he and his colleagues would only give them up for a $280 million slush fund of federal cash controlled by the provincial government.
The latest case of the Premier and one of his ministers saying different things can’t be put down to brain farts.
You also cannot dismiss this because fisheries minister Vaughan Granter can’t speak in short spurts or whatever the heck that line was from last weekend’s On Point.
This one is a case of two cabinet ministers saying two different things.
Don Mills says people in Newfoundland and Labrador have a false impression of the state of the provincial economy.
Wade Locke says Mills is full of it.
One of them included a slide showing projected offshore oil production. (right)
You can hear that pretty clearly in the most recent episode of On Point. The political panel talked about a couple of cock-ups by the Conservatives last week.
Taking a lesson he learned from Reform Conservative turned Grit turned provincial Conservative Steve Kent, provincial Connie turned Grit Paul Lane goes places, takes a picture of himself there, tweets it, and then frigs off somewhere else. The selfie makes it look like he stayed at the event. That’s how he can be in so many places at the same time.The provincial government will balance its books this year by borrowing $2.1 billion.
Lots of people don’t know that, as Michael Caine would say.
The government included in its budget plans this year a hike in the HST of two percent.
The tax hike will bring in $200 million.
That $200 million will just about cover the interest in one year on all the new debt the provincial government plans to add between now and 2021.
The $2.1 billion this year is the tip of a very big iceberg of new debt, you see. The new debt will go on top of the other $12 billion we already owe. The total cost just to pay the interest on that debt in 2021 will be $1.0 billion.
When people found out about the HST hike, they lost their minds.
Fast forward to 2017.
“This may be our last shot at it,” said captain of industry Paul Antle this week as he set off to find other captains of industry to help him save the province. .
Gotta get off the oil, see. The Tories have frigged everything up..
Not so very long ago another rich guy-turned-politician said pretty much the same sort of thing.
The Liberals had cocked things up so badly – said captain of industry Danny Williams - that he was trying to get oil royalties that Ottawa was taking.
They weren’t really doing that, as Williams later admitted, but hey, why let the facts get in the way of a good story.
“Williams provided [Macleans scribbler Paul Wells with] chapter and verse of his battle with Ottawa for a bigger share of the wealth generated by offshore oil. He passionately advanced the idea that this is his province's last, best hope to become a have rather than a perennial have-not.” That was December 2004..
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Imagine, if you can, what it must be like to be Sandy Collins. Sandy is a very young man who is - right now - living the first line of his epitaph.
Imagine, if you can do two at one, what it must be like to be Veronica Hayden. Veronica is Paul Davis’ principal assistant.
Both took to Twitter last weekend to harass Liberal leader Dwight Ball over the fact that he seemed to be saying contradictory things.
They must have been feeling very proud, strong, and determined.
And then it was Monday.
The provincial government announced four years ago that a caribou memorial at Gallipoli would be part of the Honour 100 commemorations to make the 100th anniversary of the First World War.
For those who don’t know, the Newfoundland regiment fought its first battles on the Turkish peninsula from September 1915 to January 1916. Gallipoli is the only major battle site from the First World War that doesn’t have a caribou memorial.
That’s why the provincial government announcement in 2011 was such welcome news.
That’s also why it came as such a disappointing shock to so many people on Monday to learn that not only had the provincial government scrapped the memorial but that they had done so because they could not find $500,000 in the budget to cover the cost. That is precisely what odds and sods minister Darin King told the House.
A couple of years ago, the province’s auditor general noted that a Crown agency responsible for developing an integrated health information system was paying salaries to its employees that were way outside provincial government guidelines.
The Telegram reported last fall that the problem was still unresolved 18 months after the auditor general issued his report. This was no small matter. Salaries grew 354% between 2007 and 2012, according to the Telegram. In one case, the salary for a senior executive member jumped by 119%.
Last week, and in the wake of an updated report by the province’s auditor general, Canadian Press reported that health minister Steve Kent had cut salaries at NLCHI. They’d save $50, 000 in one case and altogether the salary cuts would save $330,000.
Small problem.
Wade Locke and Don Mills are two of the faces most associated with the current Conservative administration in Newfoundland and Labrador, aside from the politicians, that is.
Mills played a key role in Danny Williams administration. Mills polling firm provided government with quarterly surveys. Williams also tried to manipulate Mills’ survey results for questions on local politics that Mills used to market his research company.
The quarterly polling was key to Williams efforts to silence dissent and maximize his own freedom of political action. The more popular Williams became, the less likely were any opposition politicians or news media to question his decisions.
And for everyone else, the Conservative message was that any dissidents were out of step with the majority of Newfoundlanders and Labradorians. Mills’ polling purportedly showed that Williams and his party were popular to an unheard of degree. “He’s right because he’s popular and he’s popular because he is right,” was a common Conservative talking point.
That’s why it has been so interesting the past few months that Mills has been criticising the provincial Conservatives in Newfoundland and Labrador.
Don Mills is the latest fan of the provincial Conservatives to turn on them savagely.
The St. John’s Board of Trade had Don back to deliver a luncheon speech this week. According to CBC, Mills said:
"The downside of Danny Williams, and I have a lot of respect for him, is that he doubled the provincial budget within that timeframe too," … "He left the province with a structural budget problem that is going to be difficult to fix."
Mills also endorsed the private sector as the engine of economic growth, something Williams firmly opposed.
A decade ago, Mills couldn’t say enough about Williams the Wonderful. Now, Mills cannot distance himself enough from Old Twitchy and his legacy of what Mills calls “a structural budget problem.”
It’s possible they are simply mirroring the intransigence of their Quebec counterparts to co-operate with actions in this province — as, for example, Hydro-Québec did in refusing to participate in PUB hearings on the water management agreement.The problem with the statement is that it simply is not true.
All this talk of austerity, gutting the public service….
Then you look at the salary costs, from the provincial budget.
There’s something that just doesn’t add up.
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The annual budget is probably the most political document of any government in a Westminster style parliament like ours.
At its simplest and most obvious level the budget is the formal statement of a government’s priorities. Once approved by 1the legislature, it gives government the legal authority to spend money.
The budget is, in that sense, the most obvious display of what political scientist David Easton defined as politics: the authoritative allocation of values.
There’s more politics to the budget than just that, however.
There was one older fellow, a bit on the round side, who walked with a limp. The other fellow walked very straight and had a really high collar on his shirt. Sorta like Don Cherry would wear one of the workers said. 