Nova Scotia Makes Secret Side Deal - NL Gets Budget Shaft

The government of Newfoundland and Labrador, and independent economist Wade Locke, has determined that the federal budget will cause Newfoundland and Labrador to lose approximately 500 million each year or $1.5 Billion over 3 years.

This comes at a time when the economy is already sputtering to hang onto life and the province is forecasting multi-year deficits which will be compounded by another half a billion a year thanks to this latest move in Ottawa.

The expected loss comes as a result of changes about to be introduced to the O’Brien formula and Atlantic Accord arrangements forced on the province by the Harper government. Changes which touched off the province’s ABC campaign during the last election.

Now the federal Conservatives have again changed the calculations unilaterally.

Premier Williams says he sees this move as a direct attack on Newfoundland and Labrador. Credence was given to this allegation today when reports surfaced that Nova Scotia Premier, Rodney MacDonald, has entered into a secret side deal with Ottawa to ensure that his Province will not be affected by this latest unilateral change to the Accord, leaving Newfoundland and Labrador the only Province of Canada adversely affected.

When asked by Randy Simms of VOCM radio if the six Liberal MPs from the Province plan to support their leader in voting for the budget MP Judy Foote responded that she will support the budget because her party has determined that “Canadians don’t want an election. They want us to get the job done…we have to do something and it means getting on with the job.”

Left unsaid was the fact that in “getting the job done” Ms. Foote and the Newfoundland and Labrador Liberal caucus plan to do so on the backs of their constituents.

Perhaps Ms. Foote and her Liberal colleagues from the province might do well to remember the legacy left by Conservative MPs Fabian Manning and Loyola Hearn when they opted to toe the party line over the Accord rather than standing up for their province when the time comes to stand up in the House of Commons.

Even if the budget passes an election is likely within a year. Voters in Newfoundland and Labrador have already seen to it that no Conservatives were elected in the last election and they may well decide that the future is one where not only blue, but red as well, are no longer a part of the Newfoundland and Labrador election palette.

UPDATE January 30, 2009 - 2:03 PM NL Time:

News reports are surfacing that MP Scott Simms will vote NO on the budget in its current form.

Still no word from MPs Sibon Coady, Gerry Byrne or Todd Russell.

Will they stand with their constituents or will they decide to toe the party line in Ottawa instead?

UPDATE January 30, 2009 - 11:17 AM NL Time:

Thanks to the letters, phone calls and emails of constituents in the province Liberal MP Judy Foote has decided to support her province and vote NO on the budget if changes are not made to rectify this issue.

Here is an email I recieved from Ms. Foote today:

Thank you for getting in touch. I really appreciate hearing your views.

Let me put your mind at ease. For me, doing what is right for our province is to vote against this Conservative budget which I will be doing.

One of the problems in Ottawa is getting people to understand the seriousness of the situation.
I can talk until I am blue in the face but what I needed was hard evidence that the views I am expressing are real and represent the thoughts of the people of Newfoundland and Labrador.

As a result of my comments on Open Line yesterday morning I now have that hard evidence.
While I could have gone on open line and asked for e-mails and telephone calls to get your views, that could have been viewed as being contrived.

By laying out the options available to the NL MPs it generated the correspondence I needed that there is no question the people of Newfoundland and Labrador want their representatives to vote against the budget even that means sitting as independents.

I will be voting NO.

Judy

News reports today indicate that Avalon MP Scott Andrews has also decided to vote NO in support of the Province's position.

Author's Note: Web Talk encourages everyone to contact the Province's Liberal MPs and express their feelings over this issue. Anyone wishing to do so can contact them at the following email addresses:

Scott Andrews: Andrews.S@parl.gc.ca

Gerry Byrne: Byrne.G@parl.gc.ca

Sibon Coady Coady.S@parl.gc.ca

Judy Foote: Foote.J@parl.gc.ca

Todd Russell: Russell.T@parl.gc.ca

Scott Simms: Simms.S@parl.gc.ca>

Newfoundland and Labrador Balancing Act

This week Newfoundland and Labrador’s battle hardened Auditor General (they don’t call him a General without reason), released yet another direct and accurate report. This one focused on the financial situation in the province and it shone a bright light on an issue that screams to be addressed.

Fiscal Responsibility

According to the General, John Noseworthy, it’s time to take stock of where the province is and what the future will hold.

It should come as no surprise that his report identifies a record per capita debt (well over 20,000 per person) or that the province has become dependent on free flowing oil revenues. Those are points most people in Newfoundland and Labrador are painfully aware of, unless they’ve been living under a rock instead of on top of one.

What's most interesting is Noseworthy's belief that the province should introduce some method of ensuring that all future governments are obligated to table balanced budgets.

This is not a new idea but...

According to one party insider, the idea of introducing balanced budget legislation is something that has been floated (to put it mildly) inside the PC party in the past. It's also an idea that the decision makers have refused to move forward on.

The debt Newfoundland and Labrador is struggling to manage is, by and large, a result of decades of deficit producing budgets. Budgets that saw the province borrow to pay the light bill, so to speak. Yes, times are good now, with the oil revenues rolling in, but what about the future?

What will happen once the oil is gone, or even sooner, should oil prices drop to more familiar levels than they are at today? What will the provincial budget look like then?

How will the budget look when money is tight and a party or premier, who is not fiscally responsible, is in power? Will the province’s massive debt sink the island and force Labrador to disown the place altogether? (they’re almost there now)

Many other parts of Canada have already enacted balanced budget legislation. A step Newfoundland and Labrador, the most debt ridden of them all, has not done.

This is not about starving people when times are hard. With properly enacted legislation a province can potentially still run a deficit, but the governing party would be forced to stand in front of the House, face the opposition parties and the media, and convince the public that the deficit is justified.

If nothing else at least the legislation would force financial accountability and ensure that the sort of shenanigans that led Newfoundland and Labrador to where it is today don’t happen again.

The current Finance Minister, Tom Marshall, has said his government is working to reduce the debt and to be fiscally responsible. That may be so, but even if it is, it simply isn’t enough.

Oil doesn’t last forever.

Good times fade into memory.

Governments change, and so do Finance Ministers.

Newfoundland and Labrador’s debt is the single biggest stumbling block to the bright future the province’s people crave. Now that the opportunity exists, it is a moral crime for a sitting government to refuse to ensure the viability of that future and ongoing fiscal responsibility.