Paging Dr. Freud #nlpoli

Moya Greene, head of the Premier’s Economic Recovery Team, told municipal leaders last week that the provincial government spends almost $2.0 billion less on health care than it actually does.

Weird.

She said the government spent 25% of its budget on health care.  VOCM reported it: “Greene says healthcare is about 25 per cent of the province’s total expenditures, and that it is a conversation we have to have.”

The actual share in 2019 was 42% and the forecast share in 2020 in 37%. You can find the figures in the budget tabled in the House of Assembly at the end of September.

This is a really bizarro comment since Greene is already well into her job of sorting out both government overspending and re-organizing the economy.  She should have a handle on all numbers. 

After all, Greene and her provincial recovery team will deliver a preliminary report by the end of February. Sure she’s not due to have the whole thing finished until April, but the first deadline of February is really only about three months away, if you allow an interruption for Christmas.

But that’s not the only weirdness.

Building on our successes #nlpoli

"First and foremost, be totally honest with the electorate,”  former Premier Clyde Wells told Anthony Germain on CBC’s Sunday Edition last weekend.  He was giving some general advice to the next Premier on how to handle the provincial government’s enormous financial problems.

“Don't go sugar-coating anything. Fully disclose what you're doing [and] why you're doing it. Have a logical plan that will treat everybody fairly.”

Right after honesty,  came communication in Wells' approach.  Hes told Germain that he took every opportunity to explain what was going on and why it was happening to the public.  He made a couple of televised province-wide addresses to do just that.   

People didn’t like it at first.  The opposition parties and the unions criticised everything.  That’s what they are supposed to do.  But, as Wells, pointed out, “the people of the province come around. In my case, it was proven that they come around, because in the 1993 election, after four years of the most severe cutting, we had an increased majority.”

Few Premiers have done that in Newfoundland and Labrador since 1855 and none have done it since Wells.  In 2007, with bags of cash, great times, and no opposition to speak of, the governing Conservatives won more seats than they did in 2003 but they did it with fewer votes.  In 1993, the Liberals got *more* votes than they received in 1989.

But that doesn’t really tell the whole story.

What started in 1989 was a change in strategic direction for the provincial government and the province. 

The provincial government didn’t just cut spending and eliminate jobs in the public service.  Reforms to health care and education organization and governance were supposed to shift power out of the bureaucracy in St. John’s and hand it to people in the regions where they lived. 

Education reform was tied to improving economic performance and opportunities laid out in the Strategic Economic Plan.  The plan was the product of a two-year-long process spearheaded by the economic planning group, appointed by cabinet in the summer of 1990 under the chairmanship of the Premier's chief of staff, Edsel Bonnell.  The group brought together a diverse set of individuals with an equally diverse set of ideas. There were within the group contending ideas, as former chairman of the Economic Recovery Commission Doug House describes in his book Against the tide. 

The process the SEP team used overcame those differences and built a consensus on a future direction found on three fundamental changes, as laid out in the introduction to the plan:

• A change within people. There is a need for a renewed sense of pride, self-reliance, and entrepreneurship. We must be outward-looking, enterprising, and innovative, and to help bring about this change in attitude we will have to be better educated. During the consultation process, most people agreed that education is essential to our economic development.
• A change within governments. Governments (both politicians and the bureaucracy) must focus on long-term economic development and planning, while still responding to short-term problems and needs. Government programs and services must place a greater emphasis on the quality of the services provided and on the client. Changes in education, taxation and income security systems are also considered critical to our economic development.
• A change in relationships. To facilitate the necessary changes in the economy, new partnerships must be formed among governments, business, labour, academia, and community groups. In particular, better co-ordination between the federal and provincial governments in the delivery of business and economic development programs is needed to eliminate duplication and to prevent confusion for those who use them.

What happened in 2003 abandoned that strategic approach in favour of (once again) using provincial spending as a substitute for economically and environmentally sustainable private sector development. Megaprojects were all the rage and economic development became basically an exercise in handing out cheques.  Changes to education and health care governance put power back in the hands of the central bureaucracy and minimised the connection between schools or hospitals and the communities they served.

In every respect, the current financial and organizational mess of the provincial government is the result of the strategic change of direction after 2003.   Dwight Ball’s “Way Forward” stays within all the same strategic premises. Not surprisingly, it hasn’t fixed the problems.

Any proposal from any political party that doesn’t change the strategic direction of the province won’t succeed in fixing the current financial problems the provincial government faces.  That doesn’t mean going back to the 1992 strategic plan, which was designed for a different situation. 

It means using the same integrated approach, though, starting with the understanding that only a strategic shift will work.  The process is important as:  strategic change is only possible with a consensus across the province. A strategic consensus is essential because making strategic changes will require a commitment that will last beyond one four-year administration.

That consensus will only come with a lot of public discussion and debate. There will be differences of opinion.  There needs to be a lot of disagreement to make sure we explore all the options before setting on a new strategic plan made up of elements that can work.  

The new strategic plan must shift the focus of economic development from government to the private sector.  Government needs to create the environment in which the private sector can succeed while protecting the public interest through proper regulation.

The plan needs to focus not on specific topics – like substituting “tech” for the current obsession with oil – but on creating an environment in which the private sector can respond to market forces.  We cannot know what will be important in the future.  Instead, we need to create the economy that can best respond to shifts.

The lesson from the 1990s is that Newfoundlanders and Labradorians can solve their own economic and financial problems. Wells’ interview this past weekend is the first he’s given in almost 30 years and it is a reminder of what happened here, not in Saskatchewan or Iceland. 

We’ve been ignoring what happened in the 1990s in Newfoundland and Labrador.  People are casting about for some easy answers to their current problems that don’t involve actually changing anything. Unfortunately for them, more of the same simply isn’t an option.  

Well, the answers are right in front of use.  We just have to decide to build on our past successes rather than continue with tales of doom and gloom that get us nowhere. After all, it’s not like we haven’t faced bigger problems than the ones we have today and solved them ourselves.

-srbp-

Guiding Principles for Economic Development

from the

1992 Strategic Economic Plan

1. The Province must focus on strategic industries. With increasing competition in world markets and limits to growth in primary- resource industries, the Province must target high-value-added activities in which we have, or can develop, a competitive advantage.
2. Our education and training system must adapt to the changing labour market demands for a highly skilled, innovative, and adaptable workforce. In an increasingly knowledge-based economy, it is critical that governments, business, and labour work together to improve the level and quality of education, training, and re-training.
3. Newfoundland and Labrador must be competitive both at home and in world markets. To improve our prospects for economic growth and  development, and to maintain and expand local and export markets, the province must diversify its economic base by producing goods and services that are internationally competitive in price, quality, and service.
4. The private sector must be the engine of growth. While it is the role of government to create an economic and social environment that promotes competitiveness, it is the enterprising spirit of the private sector that will stimulate lasting economic growth.
5. Industry must be innovative and technologically progressive to enhance productivity and competitiveness. A competitive advantage can be created by integrating advanced technologies in the workplace with the innovation, skills, and creativity of our people.
6. To achieve economic prosperity, there must be a consensus about the need for change and a commitment from governments, business, labour, academia, and others to work together in building a competitive economy.
7. Government policies and actions must have a developmental focus where the client comes first. The structure of government must be streamlined, efficient and responsive to public needs and to changes in the economy.
8. The principle of environment must be managed to ensure that development can be sustained [economically and environmentally] over the long term.  

 

Spend ‘em if ya got ‘em: the Alberta version

In light of the suggestion the provincial government needs a blue ribbon panel of experts to decide how to safeguard the provincial economic future, take a look at what is going on in Alberta.

Conservative premier Ed Stelmach appointed just such a panel headed up by former federal cabinet minister David Emerson.

And, not surprisingly, the Stelmach government is likely to reject all of the panel’s suggestions. You can find an excellent discussion of it in a Jeff Simpson column from the end of May.

The Stelmach government’s decision is hardly surprising given the history of Conservative governments in Alberta since Peter Lougheed left office.  But it is also hardly surprising since the current Conservative administration in this province is basically following the same policy of spending that Alberta Conservatives have been following. 

What the locals haven’t adopted is the low tax, small government mantra of their western cousins.  They also don’t have the enormous oil and gas resources.

What they share with their Alberta relatives is the same fundamental attitudes that the panel identifies as being serious risks:  complacency and insularity.  As you can read on page 16 of the panel’s report:

Alberta has resources the world needs, but we cannot assume the world will beat a path to our door. Boom times can breed complacency. We can forget we are facing stiff global competition, and that our productivity lags that of competitor countries…

The report criticises the fixation with “selling stuff” to people.  There’s a parallel in this province, incidentally, in the drive to build expensive electricity projects at huge cost.  The current provincial government talks about it as a strategic investment but, in reality, it is nothing more than “selling stuff” to people.

What the Emerson panel described as a strategic approach is decidedly different:

We must take steps now to ensure we realize the full benefit of our energy resources and broaden our economic base in the new global context. As we look outward, we must expand our thinking beyond simply “selling stuff” to those who want it.

Now is the time to think more broadly about investing strategically in businesses in other parts of the world, attracting investment to Alberta, becoming part of the international networks that are creating exciting new knowledge and technology, and finding specialized niches we might fill in global supply networks. We must invest in helping Albertans engage with the world and prosper in a global economy, carefully considering how we use our current public wealth to build a legacy for future generations.

Interesting ideas; ideas worthy of further discussion, especially since they harken back to strategic ideas developed in this province almost two decades ago as the way we could move forward successfully in a highly competitive world.

- srbp -

Your world. Your choice. Your future.

Memorial University granted an honorary degree on Friday to Edsel Bonnell.

As the official news release put it:

“In essence a man with two careers, Mr. Bonnell has excelled at both.

Fifty years ago, Edsel Bonnell was the first person in Newfoundland to become a professional public relations consultant, winning numerous national awards, becoming in 2002 an honorary fellow of the Canadian Public Relations Society and, in 2005, a life member of the same organization.

From 1989-96 he took these skills into government where he served as chief of staff and senior policy advisor to Premier Clyde Wells, chairing both the Economic and the Social Strategic Planning Groups.

In musical circles he is best known for his role as founder and leader of the Gower Youth Band. This began in 1973 with the support of Gower Street United Church but it was intended to be — and has remained — non-denominational.

Educated at Memorial University, Mr. Bonnell has been recognized for his community service work in being named St. John's Citizen of the Year (1984), a Member of the Order of Canada (2001) and was inducted into the Hall of Honour at the St. John's Kiwanis Music Festival (2004).”

Edsel got the rare honour of a standing ovation from the graduates and their guests on Friday.

The reason is his address. 

At turns entertaining, frank and provocative, it was fundamentally a message of hope and a wellspring of optimism.

The speech was essentially what Edsel is.

In Edsel’s honour and to give you all a fine start to your week, here is Edsel’s convocation address, in its entirety.  It is exactly as he wrote it except in a couple of places where the paragraphing is changed to ease online reading.

 

Address to Convocation

May 27, 2011

Dr. Edsel J. Bonnell

The thing you often notice about people who receive honours and accolades, whether in Hollywood or Holyrood, is their apparent discomfort. The comments you hear are “I don’t really deserve this”, and “there are so many others who deserve this more than I do.” Every now and then, of course, you get a more pragmatic approach, like when Jack Benny said in an acceptance speech: “I don’t deserve this award. But I have arthritis and I don’t deserve that, either!”

When somebody wins an Olympic medal or writes a best-selling book or is elected to a high office, he or she has attained a definable goal for all to see, and deserves whatever praise is due. But when you’re engaged in community service and you are honoured for it, you cannot help but think about the people who have influenced you or who work with you, and all the unsung heroes you have met who have given lifetimes of service without recognition of any kind. So, discomfort seen year after year on occasions such as this is not false modesty, but more likely a reality check of one’s own limitations, and an uneasy feeling about being honoured for doing something that makes one feel so good while doing it!

In my own case, I am very aware of people and organizations who share this honour with me today, and I sincerely thank the Senate on their behalf as well as my own. They are legion, from my parents and wonderful “big sister” who set shining examples in their own remarkable achievements, through teachers (especially a music teacher who instilled in students the passion that is music), co-workers and treasured friends, to our sons and their life-partners, and grandchildren, all of whom inspire and instruct me daily.

The announcement from Memorial referred to my work in two “careers”. The one which enabled us to buy groceries every week was public relations, and I would be remiss if I did not pay tribute to my colleagues for more than half a century in the Canadian Public Relations Society who worked with dedication to create and maintain a dynamic profession with a strict code of ethics, a robust five-year accreditation process, and respected post-secondary education programs In Canada.

My other “career” has been involved with music, specifically the Gower Band Program, embodied in the enriching musical and collegial experience of the intergenerational Gower Community Band. I share this honour today with the people of Gower Street United Church who caught the vision 38 years (and more than 900 performances!) ago of establishing a non-denominational community band program which would provide music education and instruments, scholarship support, and opportunities for community service to anyone with a commitment to the love of music and the joy of service --- a truly remarkable gift to community by a church and its supporters and benefactors; and of course the more than 400 musicians who have participated in this program over the years and who continue to touch countless lives with music and community service at home and abroad.

And then, most importantly, there’s my wife Anthea, who has been my life-force for 55 years through both of my “careers”, and without whose hard work and tireless dedication so much of the foregoing would never have happened.

So I don‘t stand here alone. If all the people who have influenced me, given me opportunities, and worked with me could be here, there would be no room for anyone else in this hall. And I am not unique in this respect, because all graduates here today had many people walking across this stage with them in spirit, and I know they acknowledge the support, and often the sacrifice, of parents, family members, and friends in achieving their goals. Truly, “no one is an island, no one stands alone”; we are indeed all “part of the main”.

As an unabashedly proud parent myself, I can assure the Graduates that your parents share your joy and your pride on this special day. But they, like me, come from different generations. Many parents may be from the so-called “Generation X”; others may qualify for what is now known as “Zoomers”. The question is: What kind of world have we of previous generations given to these graduates here today? And the answer is intimidating. It has prompted me to suggest that we are not following “Generation X” with “Generation Y”, but rather with “GENERATION EXPONENTIAL”!

Last month a man died in the southern United States at the remarkable age of 114. He was thought to be the oldest man in the world at the time, having lived in three centuries. Just think for a moment what his life-span witnessed:

We went from “horseless carriages” to space vehicles that send us pictures and information about new planets in the universe beyond our own solar system; from bolt-action rifles and bayonets to nuclear weapons which can destroy life on earth as we know it; from the three little clicks for the Morse code letter “S” that Marconi heard on Signal Hill to Skype; and from silent movies to “tweets” from around the world on the wondrous machines that we now carry around in our pockets.... all in the span of one man’s life.

It was unprecedented. No other human life-time in the history of the world has ever experienced so much change, so much challenge, and so much stress as the past century or so. But the more startling reality is that the speed of all this change has been, and is, exponential. It has grown faster and faster each decade, and indeed each year, until now it is almost incomprehensible. It’s easy to forget that until 30 years ago, there were no personal computers; and five years ago many of us still thought that Blackberries were edible. The old discussion about how many angels can dance on the head of a pin has gone out the window (no pun intended!) because now they can put the contents of the U.S. Library of Congress on the head of a pin. All the wisdom of the world is available to any child who can access a computer. The whole process of education may soon become unrecognizable to those in my generation.

Science fiction has become reality. It is no longer considered futuristic to talk about the age of Artificial Intelligence and the Singularity, when machine intelligence merges with or exceeds human intelligence. Earlier this year, IBM’s “Watson” defeated two brilliant Jeopardy champions. That was truly history in the making!

The questions that arise, of course, are critical. Can we use our technology so as not to be abused by it? Can we master it so as not to be mastered by it? Can we lead so as not to be led?

This is the legacy we have given to you in your “Generation Exponential”.

Scary?

Sure.

Challenging?

Of course.

Exciting?

You bet!

For centuries, generations have talked about passing the torch from one to another with the usual proverb that the new breeds hold in their hands the keys to the future and the fate of the world. Now, however, it has a more urgent ring to it. Graduates, your generation can literally kill or cure the world; you have the tools to do either one, and the choice is yours. And in the case of most graduates here today, you are called not only to use the tools wisely, but to teach coming generations to do the same. It is an awesome but heroic undertaking.

We are already well into the Communications Revolution. It is changing the world order as we speak. Events in Egypt this year have shown dramatically what could be accomplished by people communicating electronically as an alternative to armed rebellion. Throughout history, tyranny has thrived on secrecy and ignorance and fear. But these curses are being eradicated by the little I-phones and other machines we hold in the palms of our hands, where the people of the world can talk as friends instead of fearing each other as enemies. They find that there is more to unite us than to divide us, if we can only respect each other`s way of life.

For those of us in the communications field, it is a dream come true. But dreams can also be nightmares, and progress has brought with it invasion of privacy, hackers, scams, spam, terrorism, slanderous blogs, and a variety of e-crimes unknown in previous history.

As we work and live in constant communication through social media, we diminish our physical human contact. We text a lot, but actually talk very little. We see on Skype, but don’t feel the touch of a hand. Business and professional life is filled with virtual meetings, webinars, and the like, and traditional gathering places such as churches and service clubs and youth organizations may be required to create virtual entities with interactive e-worship services and web-meetings and surrogate activities in order to carry out their missions. Volunteerism is in numerical decline, with fewer people doing more than their share. This new generation will be challenged to preserve the critical element of Community, not as an option, but as an imperative, if we are to maintain our humanity.

In this commitment to community, every individual has a responsibility. No one can move a mountain, but anyone can move a stone. And when enough people move enough stones together, the mountain will be moved. When we live in community, we experience the joy of fellowship and the peace of common purpose. When we engage in service, we share love with others and see the light of understanding. And when we combine the two -- Community Service – we become participants in the hope of the world.

In 2008, Lanier Phillips stood where I am standing now and captivated the Convocation with his eloquent tribute to the people of this Province. Dr. Phillips was the only African American among the 46 survivors of the tragic sinking of the USS Truxton off St. Lawrence during World War II. He had no idea where they had run ashore, and he had suffered so much abuse, hatred, and racism in his young life that he lay down to die on the beach thinking that he would probably be lynched because of the color of his skin. Instead, a kindly voice spoke and strong arms got him to his feet and then up over the cliffs of Chambers Cove. He found love from the good people of St. Lawrence. And even though the abuse and hatred continued in his naval service throughout the war and back home in the United States, he kept the St. Lawrence experience in his heart as a beacon of love and humanity and tolerance, and vowed that he would spend his life telling people all over the world that there is a place where respect and justice and love can heal the wounds of the soul.

Graduates, you are in that place, and you are of that place, whether you were born here or chose to come here. You are in Canada, a bastion of freedom, democracy, and human rights; where we are so modest that we feel a little embarrassed by saying that it`s the best place in the world to live… but it is! Where citizenship and social justice are treasured. Where we don`t make war, but we keep peace in the world, often at a dear price of brave young lives who win respect for Canada’s red maple leaf in every part of the world.

And within this great nation, you are in this province of Newfoundland and Labrador with its noble heritage, its generosity of spirit, its sense of community, its incredible wealth of talent and human resources vastly disproportionate to the size of its population, and its fierce dedication to fair play and justice. You are in this awesome place of courage and courtesy, survival and success, wit and wisdom through half a millennium of continuous settlement.

But you are also in and of this great university, a university which cares about community and shares with community, to which I can attest from the musical community’s symbiotic relationship with our remarkable School of Music for more than three decades. Today you have become alumni of Memorial, the latest generation of a proud tradition of academic excellence which has sent its graduates to teach others, to provide leadership, and to serve humanity around the world as well as here at home.

That`s why I know that you all have what it takes to tackle the challenges that will flow exponentially around you in the coming months and years. You have already achieved much, and you will achieve much more. You are from the best of stock, nationally, provincially, and academically, and it is both a profound honor and a humbling experience for me to be included in your ceremony today.

So by all means, celebrate today with family and friends. You deserve it.

And then, follow Memorial’s time-honored motto: “Launch forth into the deep”.

Use the knowledge and tools which are at your disposal, turn your challenges into opportunities, and save the world.

Because the world is truly yours, with all the blunders and blessings that you inherit.

Your world. Your choice. Your future.

Enjoy the voyage!

- srbp -

Guaranteed Annual Income

The Globe and Mail version by Kevin Milligan.

From the 1992 Strategic Economic Plan, the Government of Newfoundland and Labrador’s idea for income support reform as a means of promoting fundamental economic and social transformation:

The unemployment insurance system was originally intended to provide temporary income to people seeking alternative employment who had lost their regular jobs in the work force. The system was not designed to provide basic income support, or as supplemental income for short-term, seasonal jobs. The present downturn in the economy has pointed to weaknesses in this system which must be addressed and corrected.

Strategy Statement. The Province will work with the Federal Government to ensure that the inevitable changes to the current income security system are designed so that basic income support is provided to every household, and that weaknesses in the present system are corrected to encourage the economic growth that is needed to reduce dependency on income security itself.

- srbp -

The Cutting EDGE

Introduced in 1995, the Economic Diversification and Growth Enterprises program – known as EDGE – is the most successful economic development program currently offered by the provincial government.

According to an article in the March 20 issue of the Telegram,

The province estimates that EDGE has created 1,500-1,600 jobs over the years. The government has forked out $17 million in rebates to employers under the program. Those rebates are linked to things like provincial income tax, payroll tax and corporate income tax.

Roughly 40 municipal governments also signed on to the EDGE scheme, providing their own tax relief to qualified companies.

Within the past five years alone, 30 companies have applied for support under the program and two thirds were accepted.

Compare that to the hand-out programs introduced under the current administration.  Of the $75 million budgeted over the past three years, the programs have only managed to give away $14 million;  of that amount $8.0 million went to a company that promised to increase its workforce but in the end cut jobs.

The provincial government is reviewing the EDGE program to see how it can be improved. Currently 69 companies hold EDGE status.  A further 54 held the status at one point but no longer qualify.

As the Telegram described the EDGE program:

To be eligible, a company must create and maintain 10 new permanent jobs in Newfoundland and Labrador and make a minimum capital investment of $300,000 or have incremental annual sales of $500,000.

Tax incentives are provided to EDGE-designated companies for a period of 10 or 15 years, followed by a five-year period of partial rebates.

Part of the program’s enduring success is the philosophy behind it. EDGE recognised the changed global economic circumstances and placed its greatest emphasis on encouraging the private sector to develop innovative, globally-competitive industries that could survive without extensive government cash support.

The background to the program is contained in a public consultation paper released in the summer of 1994.  The main sections of that document are reproduced below.  in light of the current government policy and the review of EDGE, it would be useful if more people in the province were aware of an economic development philosophy that continues to deliver strong results almost two decades after it first appeared.

Excerpts from: 

Attracting new business investment: a White Paper on proposed new legislation to promote economic diversification and growth enterprises in the province

(June 1994)

1.0  BACKGROUND

The Strategic Economic Plan for Newfoundland and Labrador, which was released in June of 1992, outlined the economic challenges facing the Province and charted new policy directions to guide economic development over the long term.

The Strategic Economic Plan noted in particular that the globalization of economic activity and the liberalization of world trade presents significant new export opportunities for manufactured goods and commercial services. Technological advances made in transportation and communications over the past decade, combined with the shift towards a more knowledge based world economy, have also reduced the relative importance placed on geographic location for many industries and firms, and this has created further opportunity for the development of new products and services. At the same time, however, these trends have brought increased international competition for economic activity, not only in the development of new products and services, but in respect of many of our existing industries as well.

These profound changes in global trade patterns, investment flows and technology constitute the driving force behind the fundamental economic restructuring that is now occurring in many countries. In an increasingly competitive and knowledge based world economy, it is clear that we can no longer rely on traditional approaches to attract new business investment and expand existing business enterprises. We will, out of necessity, have to become more outward looking in our approach to economic development and create an appropriate investment climate that supports international competitiveness.

It must also be recognized that the private sector is and will continue to be the engine of economic growth. This is a key principle embodied in the Strategic Economic Plan and reflects the reality that the private sector is the most effective vehicle through which lasting economic wealth and employment opportunities can be created for the people of this Province. It is the role of government in this context to create the economic climate in which private sector investment can occur and be successful.

2.0       GOAL

The goal of attracting new business investment as a means to create additional employment opportunity for the people of this Province is not a new concept. Indeed, various governmental incentive programs have met with measured degrees of success over time in this regard. However, the rapidly changing global marketplace and the province-wide impact on the economy resulting from the collapse of the groundfish fishery have heightened the need to significantly improve the attractiveness of the Province to the private sector as a place to invest and prosper. New business investment directed at economic diversification and general economic growth is not only an objective but an imperative at this juncture of the Province's history.

The Government of Newfoundland and Labrador intends to adopt bold and innovative measures to transform the Province into one of the most attractive locations - not only in Canada but in all of North America - for new business investment and to take aggressive new steps to market and promote the Province's strengths in this regard on a national and international basis.

The main elements of this new program will be reflected in legislation to be known as "An Act to Promote Economic Diversification and Growth Enterprises in the Province". This legislation will be presented to the House of Assembly for its consideration in the fall of 1994 and will provide an enhanced "business friendly" regime for new and expanding business enterprises in the Province.

3.0       SCOPE OF PROPOSED LEGISLATION

3.1      Eligibility

New business enterprises wishing to establish in the Province and existing businesses wishing to expand their enterprises will be eligible to receive a range of special business development incentives, provided that certain conditions are met. These will be in addition to any other incentives the enterprise may be eligible for under other assistance programs established to encourage business development in the Province.

To qualify for the special incentives, an enterprise must meet the following tests:

• The proposed new business activity must have the potential to bring substantial new or expanded business investment and employment to the Province.  Only those projects involving capital investments of at least $500,000 and having the potential to generate incremental annual sales of $1.0 million, as well as creating and maintaining at least 10 full time permanent jobs in the Province, may apply to Government for access to the special incentives.
• The proposed new business activity must be consistent with the objectives for economic development that are embodied in the Strategic Economic Plan.
• Reasonable assurances must be available to demonstrate that the proposed new business activity, in the absence of the special incentives, would not otherwise be pursued in the Province. This test is intended to ensure that incremental economic activity will be stimulated by the new incentives.
• The proposed new business activity must not be directly competitive with or have an adverse impact on the viability of other businesses already established in the Province.   This will ensure that existing business enterprises will not be placed at a competitive disadvantage relative to those companies and investors who are able to take advantage of the new incentives.
• The proposed new business activity must have the potential to generate substantial value-added economic benefit to the Province.

Both new businesses and existing businesses expanding their operations will be eligible for the special incentives. However, in the case of existing businesses, only those elements of a company's operation which are incremental to its existing scale of operation will be eligible for the incentives.

3.2      Review and Approval Process

Companies seeking the special incentives available through the new legislation will be required to provide documentation in the form of a comprehensive business plan to allow for a thorough assessment of its proposal. The specific requirements in this regard will be outlined fully in the legislation.

Particular attention will be given during the review process to the commercial viability of the proposed business activity over the long term. It is not the intent of the legislation to artificially support new industries or new business activity in the Province, but rather to attract and assist in the development of viable and sustainable economic enterprises and employment opportunities for the long term benefit of the people of this Province.

All applications received under the new legislation will be reviewed by a committee of Cabinet Ministers chaired by the Minister of Industry, Trade and Technology, with final decisions on eligibility to be made by Cabinet. Part of the process in making a determination as to whether or not the special incentives will be granted to a company will involve a public notice procedure whereby Government will invite interested parties to make submissions respecting all proposals received. This is intended to ensure that all proposals are available for public scrutiny in respect of their potential competitive impact on existing business enterprises and jobs. Appropriate steps will be taken to protect the proprietary and commercial interests of the company when this public notice procedure is invoked.

While all proposals made to Government under the new legislation will be thoroughly assessed to protect the general public interest, Government is committed to a timely review process such that potential investors are not unduly delayed in the implementation of their business plans. Once the committee of Cabinet Ministers is satisfied that it has all the information it considers necessary to properly evaluate a proposal, a decision will be rendered by Cabinet on acceptance or otherwise of a company's proposal within 60 days.

Successful companies will be expected to enter into a formal contract with Government in which the Province will guarantee the benefits provided in the new legislation and the company will bind itself to implement the business proposal as accepted by Government. Notification will subsequently be given to the House of Assembly of all such contracts entered into, and ongoing monitoring of their terms and conditions will be carried out by senior officials.

3.3      Incentives Available through the Legislation

3.3.1    Taxation Incentives

The private sector is presently faced with a relatively high burden of taxation which impedes new investment and the creation of new employment opportunities in the Province. While a number of significant changes to the existing business tax structure have been made by Government in a number of areas in recent years, the entire taxation regime requires further attention if it is to be used as a means of promoting the Province as a highly competitive location in which to do business. Accordingly, the following taxation incentives are proposed for those companies qualifying for assistance under the new legislation:

(i) A full tax free holiday for ten years in respect of provincial corporate income tax, the health and post-secondary education "payroll" tax, and retail sales tax.

(ii) Further relief in these specific tax areas for an additional five year period on a reduced scale, commencing in the first year at 80% of total taxes payable and declining by a factor of 20% each year thereafter.

Municipalities will also be given the necessary legislative authority to grant full property and business tax exemptions on the same basis as outlined in (i) and (ii) above with a majority vote of the respective municipal council. At present, municipalities do not have the legislative flexibility to offer tax relief to individual companies to the extent contemplated herein.

3.3.2    Productivity Incentive

All new and expanding business enterprises experience a significant "learning curve" during the formative years of their operation. Part of this process inevitably results in a productivity "loss" that is incurred by the company at all levels in the organization.

To offset part of this productivity "cost", the Province will provide financial assistance to new and expanding business enterprises in an amount of $2,000 for each full time job created in the Province during its initial five year operating period where the company employs a resident of the Province to permanently occupy the job from the time of its creation.

Appropriate provisions will be included in the legislation to protect the pubic interest in the event of failure by a company to fulfil the conditions upon which the productivity incentive has been granted.

3.3.3    Labour Relations Incentives

A new approach to labour-management relations is required to attract new investment and stimulate new business enterprises in the Province. Government remains fully committed to ensuring that adequate safeguards are in place to protect the legitimate interests of employees and unions. However, it is in the broader public interest to achieve this objective in a balanced manner that also assures those who wish to make new business investments and provide economic opportunity in the Province have a reasonable prospect of receiving an acceptable level of return on their investment without undue risk from uncertain labour relations conditions.

Pursuant to a commitment made in the Strategic Economic Plan, Government is presently developing a comprehensive consultation document which will address various concerns respecting the general labour relations regime in the Province. While the intent will be to develop consensus on changes necessary to make the general labour climate more favourable for all businesses, Government believes that extraordinary measures are required beyond this if new business   enterprises   are   to   be   stimulated   in   the   increasingly competitive global economy.

Government's proposal in this regard is to make available different Labour Relations Act provisions to new enterprises wishing to establish in the Province and to do so in a manner that will not affect the application of current labour legislation to existing businesses. As well, any existing business where a bargaining agent has been certified for the employees of that company prior to the time it wishes to expand and take advantage of the special incentives under the new legislation will not be eligible for the labour relations provisions of the legislation. Considerable difficulty from a number of perspectives would be encountered in applying two different labour relations regimes to a single business operation, as one firm could have two separate collective bargaining processes, labour contracts and wage rates applying to employees doing the same kind of work. Accordingly, the labour relations provisions of the new legislation will apply to new business start-ups only.

The main  features of the proposed  new labour relations provisions are as follows:

a.  All collective agreements entered into between a company and the bargaining agent for the employees will remain in force for a period of at least five years, unless the contract entered into between the Province and the company in respect of the business undertaking as a whole expires in a period of less than five years.

b.  In circumstances where a company and a bargaining agent engage in collective bargaining but are unable to reach a collective   agreement,   a   special   panel   consisting   of   a representative   appointed   by   each   of  the   parties   and   a chairperson appointed by the Minister of Employment and Labour Relations will establish a collective agreement by addressing those specific matters in dispute at the time the matter is referred to the panel.

c.  Where a company and a bargaining agent are unable to conclude a collective agreement and the matters in dispute are referred to a panel, the company will not be permitted to lock-out the employees and the employees will not be permitted to strike.

d.  A panel, in concluding a collective agreement, will take into account the following factors:

(i) the overall policy objective of the new legislation which is to create conditions favourable to the establishment of new businesses and the expansion of existing businesses in the Province (this factor will be given paramount consideration by the panel);

(ii) the effect of the agreement on the profitability of the business;

(iii) the terms and conditions of employment of employees in occupations in the same or similar businesses both within and outside the Province, with consideration to be given to geographic, industrial, economic, social and other variations that the panel considers relevant;

(iv) the need to establish terms and conditions of employment that are fair and reasonable in relation to the qualifications required, the work performed, the responsibility assumed and the nature of the service provided; and

(v)      the needs of the employer for qualified employees.

e.  An agreement concluded by a panel will be binding on all parties.

f.  The panel will be required to conclude an agreement no later than 90 days after disputes are referred to it for resolution.

g.  Every collective agreement entered into between a bargaining agent and a company, including an agreement concluded by a panel, will contain provisions:

(i) requiring the application of progressive work practices in the work place including the use of composite crews;

(ii) relating to wages and to wage increases of employees during the term of the agreement, but those increases will not be permitted to exceed the percentage rise in the consumer price index as reported by Statistics Canada for that area; and

(iii) respecting the final and binding resolution of disputes without work stoppage.
Notwithstanding the provisions outlined above, where a company and a bargaining agent both agree that it would not be in their collective interest to apply the labour relations provisions of the new legislation in its entirety or in part, then those provisions will not apply to the parties concerned. Similarly, in circumstances where a panel has concluded a collective agreement, the parties concerned may, where they mutually agree, vary any term or condition the panel has applied, provided that such agreement does not offend other applicable provisions of the new labour relations regime.

3.3.4    Access to Crown Land

Crown land that a company may require to implement its business plan as approved by Government will be leased to the company for a nominal sum of $1.00.

3.3.5    Appointment of a Facilitator

Upon the request of a company, Government may appoint a person, either from within or outside of Government, to assist the company in obtaining governmental permits, licenses, options for use of Crown assets, and any other authorizations that the company may be required to obtain in connection with its business. This will expedite the processing of all applications for regulatory approval of the business plan and thereby allow the business plan to be implemented in a timely manner. The responsibility for actual decision-making in these areas will, however, remain with the appropriate regulatory agency.

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Strategic Social Plan (1995) – Social Profile

This Province's unique advantage is the strength of character, resilience, ingenuity and enterprise of its people. In the past 50 years, the people of Newfoundland and Labrador have experienced a political, cultural, economic, and social revolution.

People who have not yet reached retirement age have lived through, and coped with, the events of World War II and the impact of the establishment and subsequent decline of American and Canadian military bases; the dawn of the nuclear age; the change of political status from a British dominion to a province of Canada; the surge toward industrial development, inflow of national and multinational companies, globalization of trade, decline of traditional resource industries and shift to new-economy enterprises; the disappearance of hundreds of small rural communities; the victory over tuberculosis, and the threat of AIDS; progress in achieving women's rights and equality of opportunity and the emergence of women as a force for social change, economic renewal, and expansion of the labour market; changes in traditional family structures; the establishment of social safety nets such as unemployment insurance, social security programs, and universal health care; chronic unemployment, the loss of career security and the increase in public awareness of, and concern for, the environment.

The pace of change has been challenging for North America generally, but it has been more dramatic in Newfoundland and Labrador because of the relatively sheltered existence and relaxed lifestyle which we enjoyed before the flood of highways, radio and television, fast-food and retail chains, and computers. Other people in cities and towns across Canada and the United States have not had to make such a quantum leap economically and culturally in the past half-century.  It is a long way indeed from pondering the literary delights of The Royal Readers to indulging in nightly armchair visits to the televised violence in the streets of downtown Detroit.

Economists and historians talk of the three great revolutions which have shaped civilization: the agrarian (natural resource), industrial, and information ages. Many Newfoundlanders and Labradorians have experienced all three eras in the condensed time frame of the past five decades.

We have not only withstood such immense culture shock, but we have profited by it. This Province's unique advantage is the strength of character, resilience, ingenuity and enterprise of its people which has endured and intensified through 500 years of colourful, often chaotic, and always challenge-filled history. We have a tradition of turning constraints into opportunities, adversity into achievement, and despair into hope. It is this legacy of self-reliant determination and creativity that has sustained Newfoundland and Labrador through recession, fiscal restraint and the loss of its basic resource industry, and is building an economy that will be stronger and more diversified in the global market-place. It is also the force which must be brought to bear upon the challenge of effectively addressing social changes and issues of the late 1990s, identifying future trends and planning appropriate long-term strategy and allocating available financial resources in a manner that supports the goals and objectives.

In this respect, the Province's social ing efforts are constrained by national fiscal  realities. Social reform in Canada today is characterized by reductions in Unemployment Insurance benefits, limita­tions on the Canada Assistance Plan, re-evaluation of health care, less federal assistance for education and training, and a move toward block funding for overall provincial social programs.  Untenable and unsustainable national and provincial debt loads and lower transfer payments combine to further restrict the ability of Newfoundland and Labrador to address pressing social issues. The comparative national and provincial fiscal resources are shown in Figure 3.

The message is clear:  we have to find ways and means to spend smarter; in other words to do more with less.  It is a daunting challenge.

In order to accomplish this task, we must first consider realistically where we are and where we are heading as a province.  We cannot address 21st century problems with 20th century (or in some cases 19th century) approaches, solutions, or attitudes.

Although sectoral issues and trends will be dealt with in greater detail in succeeding chapters of this Consultation Paper, certain elements of our Provincial social profile are highlighted in this section in order to put the planning exercise in perspective and to provide the basis for determining an overall social vision, appropriate guiding principles, and attainable goals and objectives.

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Next:  Demographic Change and Challenge

Strategic Social Plan (1995) - Introduction

In June 1992, the Government of Newfoundland and Labrador released Change and Challenge, the Province's Strategic Economic Plan. In the preparation of this document, involving an extensive public consultation process, it was stated repeatedly that economic planning was — in the words of Premier Wells — "only one half of the equation”. It was recognized that planning for the future development of the Province and the well-being of its people cannot be done on the basis of economic factors alone; it must embrace the social component as well.

This "other half of the equation" must reflect the needs of the people of Newfoundland and Labrador for more effective and equitable distribution of social services and benefits, improvement of educational levels, and progressive and innovative programs in health care and justice.

Social planning is not a "necessary evil” which must be accommodated within economic activity. It is the hallmark of a caring, democratic society. However, it cannot be conducted in isolation, oblivious to the economic realities which dictate the extent of the fiscal resources which are available to provide the social services that are needed.

Indeed the sheer weight of Provincial social spending demands that programs be carefully examined and prioritized, or the economy will be unable to sustain them. In the current Provincial budget of over $3.5 billion, 67.8 percent ($2,402172,000) will be spent in the social sector as compared to 5.6 percent ($198,474,000) in economic development (see Figure 1 and 2) The combined expenditure of the Departments of Industry, Trade and Technology, Natural Resources, Tourism, Culture and Recreation, Fisheries, Food and Agriculture, and Environment are less than 55 percent of the cost of the Department of Social Services alone, and little more than one-fifth the cost of health care in the Province.

These costs have been more than the Province's tax base can bear, and consequently the direct Provincial debt has increased almost every year since Confederation until it now totals more than $6 billion and costs more than $540 million a year to service. The problem of serving a small population in more than 700 communities scattered over a large land-mass becomes clear when compared to other geographic and demographic indicators.

For example, the Province of Newfoundland and Labrador is large enough to accommodate the entire United Kingdom — England, Scotland, Wales, and Northern Ireland — and still have enough room left over to take the provinces of New Brunswick, Nova Scotia, and Prince Edward Island. Yet, our population is less than the city of Winnipeg.

These 576,000 souls maintain 8,900 kilometres of roads, 67 heath care institutions including hospitals, nursing homes and service agencies, 476 schools, a university and 23 facilities for community colleges and vocational training, and all the trappings of modern North American society. It is a financial burden that can only be borne by a strong and vibrant economy, and demands that priority attention be given to the task of increasing Provincial

revenues through stimulating new and existing enterprises. Without private sector business growth, we cannot survive as a province. At the same time, social services and facilities must be operated as efficiently as possible without sacrificing essential programs for health, education, and public safety.

Obviously, economic and social planning are inextricably linked. But they must be linked in support of each other, not in conflict or competition. They must be partners, not adversaries, and a viable economy and effective social system both depend on a healthy and sustainable environment. The three together constitute our human ecosystem. The simple fact is that in the everyday living of Newfoundlanders and Labradorians, social and economic factors merge into one single, simple priority: Quality of Life. Whether wealthy or impoverished, people share the same needs for health, happiness, enlightenment, security, freedom, opportunity, and community.

No one living in this Province wishes to create wealth either individually or collectively by wreaking third-world conditions on our physical environment or standard of living. The collapse of our basic resource industry through the devastation of groundfish stocks through foreign over-fishing, errors in resource management, and local over-production has demonstrated with a vengeance that it profits us nothing to gain short-term prosperity if we destroy our long-term resources in the process.

At the same time, no one will dispute that we cannot maintain our quality of life without a stronger economic base. In other words, we cannot build a vibrant economy without a strong social structure; neither can we maintain vital social support programs nor preserve our culture and quality of life without strong economic growth.

Accordingly, on March 4, 1993 the Throne Speech in the House of Assembly committed Government to continue its planning process with the development of a Strategic Social Plan as the essential and equal partner to the successful and highly-acclaimed economic plan. A Strategic Social Planning Committee of senior officials was established immediately, and work began on the first phase of the process, i.e., the initial task of reviewing all Government social programs and policies, studying emerging social trends locally and globally, collecting and analyzing data, and preparing discussion papers for Cabinet consideration. The result of that activity is this Consultation Paper which is offered for public consideration, discussion, and commentary in the second phase of the process.

As in the case of the Strategic Economic Plan, the public consultation will be conducted independently of Government to provide opportunity for objective and effective participation by the widest possible representation of the general public. The input of the people who participate in this process will be incorporated into the third phase of the process: the development, release and implementation of the completed Provincial Strategic Social Plan.

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Next:  Background – Social Profile

Strategic Social Plan (1995) - Forward

This Strategic Social Plan Consultation Paper initiates the final phase of an intensive Provincial planning process which began more than six years ago. When this Government took office in 1989, we made a commitment to the people of Newfoundland and Labrador to review all economic and social programs and mandates and to develop strategic plans to carry the Province through the turbulent changes of the 1990s into a stronger future in the 21st century.

In the fall of 1990, Government began the first phase of this planning process through a review of economy's strengths and weaknesses, examination of the activities and policies of economic departments and agencies, and the subsequent development of a public consultation paper to provide an opportunity for the people of the Province to have direct input into the vision, guiding principles, and actions that eventually became the Strategic Economic Plan (SEP).

When the SEP was released in June 1992, however, we stressed that it was only half of the planning cess. Economic issues cannot be examined or addressed in isolation from social issues and realities, and it was imperative to move on to the second phase of our strategic planning: the development of a Strategic Social Plan. A Social Planning Group (SPG) of senior officials was established, and on March 4, 1993, the Throne Speech in the House of Assembly reaffirmed Government's commitment to the development of a Strategic Social Plan as the essential and equal partner to the SEP.

During the past three years, the SPG faced many challenges in their task of researching global trends reviewing programs and policies. Unlike economic planning activity, strategic social planning models were virtually unknown, and the Group were for the most part breaking new ground. In addition, they were caught in a maelstrom of social change and reform at both the Provincial and Federal levels, and were obliged to constantly revise data and projections to keep pace with national social reforms and in funding.

Nevertheless, the work of the SPG progressed to the point where relatively stable data could be provided to Cabinet and a consultation paper could be developed. This document is not a final Strategic Social Plan but it is a clear statement of the direction in which Government intends to proceed in terms of providing essential services for the social well-being of our citizens in as effective and efficient as possible. We now invite comment and suggestions from the people of Newfoundland and through the extensive public consultation process which will precede the development of the Strategic Social Plan.

I encourage all citizens, and especially organizations concerned with various social issues, to examine this paper thoroughly and to give serious consideration to the social challenges that are outlined and to the strategies and actions that are proposed. I look forward to receiving the thoughtful views of people throughout the Province as we continue the process of planning our social order for generations to come.

[original signed by]

Clyde K. Wells

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To come:  “Introduction and Background”

• Introduction
• Social profile
• Demographic Change and Challenge
• Living in a Different World
• Realities
• Principles
• Vision

Explanatory Note:  The 159 page Strategic Social Plan [SSP] consultation paper is being presented in a series of instalments.  A companion to the 1992 Strategic Economic Plan, it lays out both a clear statement of where the province was in 1995,  the challenges to be faced in the future and policies to deal with those challenges successfully.

Approved by cabinet for release in December 1995, the 1,000 copies of the consultation document were ordered destroyed by the Tobin administration in 1996.  Only a handful of copies survived.

The planned consultation never took place.  Instead, and while something subsequently emerged which was labelled a Strategic Social Plan, the new Tobin administration went down an entirely different road from the one envisaged in the 1995 consultation paper.

Some specific initiatives from the 1995 document did make it into action.  Others did not. Unfortunately, the fundamental approach – the integrated concept – that underpinned the strategy went out the window with the change of administration in January 1996. 

It never returned.

The current state of the provincial government – unsustainable levels of public spending in an increasingly fragile economy – are a direct result. 

In a province facing an uncertain future, where political leaders are devoid of ideas, let alone sustainable or new ones, the 1995 Strategic Social Plan remains relevant.

Budget hints from Marshall

Excerpts from a speech by finance minister Tom Marshall, in Corner Brook, as reported by the Western Star:

Although he said the rate the province has been spending is not sustainable, Marshall said spending on new programs and projects will highlight the next budget.

“We have to get control now,” said Marshall. “I’m not talking about cutbacks. There will be new initiatives and programs, but we have to temper our expectations and we have to keep things under control. We have to make sure the spending we do today is sustainable for the children of the future.”

…

“We have to get control now,” said Marshall. “I’m not talking about cutbacks. There will be new initiatives and programs, but we have to temper our expectations and we have to keep things under control. We have to make sure the spending we do today is sustainable for the children of the future.”

…

“Now we have to benefit from new industry, benefit from the knowledge economy, the innovation economy.”

Knowledge economy.

Innovation.

Hmm.

Those ideas sound awfully familiar.

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