Vision - A Casualty of Drive by Politics

The most common definitions of “Vision” include:


1. The faculty of sight;
2. Intelligent foresight;
3. The manner in which one sees or conceives of something;
4. A mental image produced by the imagination.

That’s something every Newfoundlander and Labradorian would be within their rights to jot down, seal in an envelope (or place in an email) and send directly to every candidate running in October’s provincial election.

History tells us the world’s most respected leaders aren’t remembered for their ability to win office or hang onto power but for being visionaries and for their ability to engage the public in making their dream a reality.

Where are the visionaries in Newfoundland and Labrador today?

Talk to the average politician and you’ll discover most can’t see past the next poll, next election or next fiscal year. Vision, true vision, extends beyond those false parameters. It reaches far into the future, perhaps to the next generation, the generation after that, or even beyond.

Visionaries recognize the present for what it is, the future for what it can be and are capable of laying the building blocks that inspire others.

As a people why are we so easily accepting of announcements about “slightly lower” unemployment rates or achieving an “average” Canadian wage? Instead we ought to aspire to having the lowest unemployment and the highest wages in the Country.

It goes without saying that we won’t reach such lofty heights overnight, in fact we may never get there, but if we don’t aim for the target we’ll never come close to hitting it.

Take our natural resource, the province, regardless of which party is in power, has always developed those resources in exchange for the direct revenues (royalties / taxes) they produce and for the limited number of jobs extracting them creates. Why?

Why hasn’t government ensured that every ounce of benefit is squeezed from the resources around us and why haven’t our leaders, past and present, been able to understand that those resources are a diverse package of interrelated opportunities rather than a series of independent revenue streams?

Maximizing benefits doesn’t have to involve a heavy handed approach that might scare investment away and the benefits reaped don’t have to flow directly from selling the resource itself.

Legislation forcing industry into a position where profitability is unduly limited or which unfairly places social obligations on them isn’t the answer either. A far better approach is to create an environment where industry itself can see the economic advantages of increasing its presence in the province. This would require a government that understands how the different pieces of the puzzle are interconnected and can be leveraged.

As an example, based on public statements by NALCOR it would seem that rising oil prices will continue to drive up power rates until such time as Muskrat Falls energy is available. At that time rates will stabilize. They won’t fall mind you, but stabilize.

Based on this it appears higher rates charged (due to the cost of oil) will remain in effect even after the oil is no longer needed, ultimately providing additional revenues to NALCOR when Holyrood closes. After all, when those costly oil purchases are no longer necessary the revenue has to go somewhere.

Likely those hundreds of millions of dollars, along with earnings from selling power outside the province, will be used to repay the development costs of the project and provide a healthy return for NALCOR and the province.

This might seem reasonable enough from a traditional business perspective but NALCOR isn’t an independent business and the power they sell is directly linked to the local economy and to every individual and business in the province.

Newfoundland and Labrador, compared with other Canadian jurisdictions, is somewhere in the middle of the pack when it comes to power rates. According to NALCOR our province isn’t the only place rates are rising and after Muskrat is complete, even with the higher rates, we will continue to sit somewhere in the middle of that pack. This makes me wonder, why is that good enough?

Why are we willing to settle for being “average”?

As part of a longer term view, considering the size of the investment - and its associated risks - perhaps a more visionary approach to Churchill power should be considered.

There’s a difference between thinking inside the box and thinking outside it. In fact it’s been said visionaries don’t even recognize a box exists.

Might the province be better served by cutting power rates as much as possible once the expense of Holyrood oil disappears? This is not to say taxpayers should subsidize power rates, that NALCOR shouldn’t make a profit, or that the loans shouldn’t be repaid, the question is how high those profits need to be and what the plan is for paying down the debt.
We may have a unique opportunity here since NALCOR isn’t developing the project as a privately owned company or publicly traded corporation. As such it shouldn’t have the sole goal of maximizing profits. Its owners are the taxpayers of the province. Ultimately any corporation is responsible for achieving the long term objectives of its shareholders, in this case the citizens of Newfoundland and Labrador.

When it comes to the Lower Churchill, perhaps we should ask ourselves if our primary intent, beyond keeping the lights on, is to reduce debt quickly, increase profits for NALCOR and government, grow the economy and related employment or pursue some combination of the above.

Perhaps the answer is to eliminate the debt quickly and then drop power rates as low as possible while ensuring the future viability of the corporation. Perhaps not. Who knows, but if we examine all our options, including the eventual repatriation of the Upper Churchill , might we be able to focus our efforts on one day making Newfoundland and Labrador the lowest cost jurisdiction in Canada, hell why not in all of North America, for access to clean power?

If we could eventually reach that target what might it mean?

Clearly it would be a welcome reprieve for rate payers in the province and would go a long way toward easing the burden of the less fortunate among us, but what about the bigger picture?

Low rates would obviously reduce the cost of doing business here. If the costs were low enough that alone would increase the profitability of existing enterprises and improve their ability to expand, hire new employees and even increase wages.

With less focus placed on direct profit from our energy reserves and more on offering the lowest possible rates, major industrial players now content to harvest resources and ship them elsewhere for processing might find themselves able to do that processing here at a lower cost and for increased profit thus creating more employment and provincial tax revenue.

It’s often been said that our remote location and distance from world markets is a barrier to developing a manufacturing based economy. There may be some merit in that but with the Northwest Passage, the most sought after shipping route in the world, beginning to open up could our location at its Eastern gateway actually benefit to us in the future? When it does open up, if the infrastructure necessary to take full advantage of low cost renewable energy were put in place, including for the use of Upper Churchill power, what might it mean to the province 30 years from now?

Secondary processors who use our iron, copper, oil or other valuable resources to produce consumer goods around the world might eventually come to recognize the province as a unique location with abundant resources and cheaper power than they can find elsewhere. How many jobs would that create?

Perhaps stimulating industry and employment in this way would generate provincial revenues far beyond existing levels. This broadening of the provincial tax base might even enable a visionary government to lower personal and business taxes. It might result in us becoming one of the lowest cost places to live in Canada while ensuring we are even more attractive to business, guaranteeing the cycle of growth continues to expand.

In the long run such an approach has the potential to be far more lucrative for the people of the province and for government coffers than the status quo.

Picture a future where Newfoundland and Labrador is recognized as a strategically situated treasure trove of raw materials that has the lowest cost power in North America and perhaps even the lowest tax regime. A place with a diversified economy where well paying jobs are abundant and the provincial treasury is flush with cash.

Of course this might sound like a pipe dream and in reality the entire idea is nothing more than rambling on my part. I wouldn’t pretend to know if such a scenario is viable or not but at least it’s a concept, the germ of a direction, the seeds of a vision that extend beyond the next few months or years or even my own lifetime and certainly beyond the next election. In other words it’s far more than any of the parties are putting forward.

With an election on the way we should all question where the long term vision is for our province. What about the fishery or the forestry sector. Where do we want to see our health care system and our schools a generation or two from now and how do we plan to get there? All of these components are intertwined and need to be part of an overall vision.

We may have a small population in Newfoundland and Labrador but we are also blessed with a vast array of renewable and non-renewable resources and a population that I truly believe is willing to work for a brighter future. In fact I’d argue that any government unable to satisfy the needs of our small population, while surrounded by such vast wealth, doesn’t deserve to hold office.

At this point in our history what we need is a visionary leader bold enough to set aside political expediency and take the reins firmly in hand. Unfortunately the closest thing to vision we’ve seen from any of the political parties are promises likely to expire the morning after the polls close. Hardly inspirational.

Comparing Report Cards - Harper vs. Williams

This week Prime Minister Stephen Harper delivered his “report card” on the status of the federal stimulus spending. Ironically, Mr. Harper waxed poetic about how much money has been earmarked for specific projects, municipal leaders across the Country sat in stunned silence wondering where the money was.

Always one to turn a phrase to his advantage, during his address Stephen Harper was quite skillful in saying that money has identified for the many projects while knowing full well that approval and delivery are not the same thing.

What Mr. Harper intentionally failed to admit was that most cheques have not been cut and most tenders for development have not been issued because the money is still somewhere in the bowels of the Finance department tangled in red tape. Stimulus funding is wonderful stuff when it’s needed but it isn’t much good if the money doesn’t flow.

As much as the Prime Minister dislikes the place, perhaps Mr. Harper would do well to look toward the province of Newfoundland and Labrador if he wants to see how stimulus funding really works.

On the same day the Prime Minister delivered his report card to the Professor Ignatieff and the rest of Canada Newfoundland and Labrador Premier, Danny Williams, and several of his Ministers delivered an update of their own.

The Provincial infrastructure stimulus package included in the 2009/10 budget was set at $800 million dollars and just yesterday that amount doubled to $1.6 billion and the program extended to include the 2010/11 fiscal year as well.

The biggest difference between the Newfoundland and Labrador package and the one touted by Ottawa isn’t in the numbers or the duration but in the delivery.

Perhaps Provincial Transportation and Works Minister, Trevor Taylor, put it best when he said at yesterday’s press conference, “It's one thing to make unprecedented commitments but it's quite another to get this money flowing and projects tendered quickly and that's just what our government is doing."

"Right now our Tendering and Contracts Division is the busiest it has ever been. On average, at any given time, the Provincial Government has between 20 to 30 tenders in circulation. We currently have 107 tenders out, which is a record for this province."

"We are issuing and awarding our tenders earlier than ever before and we plan to maintain this aggressive tender schedule as long as the commodity and labour prices hold and the industry has the capacity to do the work. Also, we are duplicating the designs of many of our new schools and health care facilities which expedites the process and makes it more cost-efficient,” said Taylor.

While there is no doubt the economic downturn is affecting the Province, as it is the rest of Canada, with increased unemployment and a lower GDP there are some positive indications for improvement over the coming months.

Finance Minister, Jerome Kennedy noted that, "At a recent meeting of finance ministers across the country, the Federal Government indicated that Newfoundland and Labrador is now leading the rest of the country with stimulus flowing to the economy in 2009 and 2010 relative to our GDP."

"In addition, thus far this year, our province is leading the country in a number of economic indicators, including investment intentions, retail sales, labour income and urban housing starts," said Kennedy.

Perhaps one of the best features of the Newfoundland and Labrador stimulus package is that isn’t overly dependent on Ottawa to provide a share of the funding. 85% of the program’s funding will come from provincial coffers with the remaining 15% being shared by federal and municipal governments.

It’s a good thing there isn’t too much dependence on Ottawa. We all know where that has led the Province in the past. In this particular situation and at the speed federal infrastructure funding is flowing the recession is likely to be a distant memory by the time the first cheques go in the mail.

It’s really too bad Stephen Harper and Danny Williams aren’t on speaking terms or the PM might have picked up a few pointers on how to handle an economic crisis.

Canada's Economic Recovery Plan (For Dummies)

With the economy on life support, businesses closing their doors and laid off workers stacked up like chord wood across the Country the political thermostat has been cranked up on bust in Ottawa and the self serving rhetoric is flying around like hungry bees at the hive.

Unfortunately the only ones with anything to gain from all the hyperbole are the politicians themselves. Like it or not, the rest of us are on our own.

They can spin it however they like but the fact remains that there is no money available to bail out the forestry sector or the commercial fishing industry, both of which until recently employed hundreds of thousands of individuals. You see the problem with those industries, according to the Conservative talking heads, is not one that Ottawa can address. It’s all about a lack of markets for their products.

On the other hand to listen to our elected officials, you’d somehow believe that pouring billions upon billions of our tax dollars into the auto sector, which employs tens of thousands, is simply the right thing to do.

Funny, but I thought I read someplace that a lack of buyers for North American gas guzzlers was what was killing the industry. My mistake I guess.

Meanwhile, up on the Hill, the Liberals, NDP and Bloc are all claiming to be the champions of the working classes. Yes sir, they all want to be seen as standing up for little guy who’s lost his job. Why if the Harper government doesn’t soon implement changes to the qualifications for EI and help those people the opposition will…well it…

What? What exactly will Mike, Jack, Gilles do anyway?

Every MP in Ottawa knows the odds of electing another minority government are staggering. Nobody knows if the Liberals can actually win the next time out or not. According to the polls both the NDP and the Bloc stand to lose seats if an election were held right now. Add to this the fact that it would take all three parties to boot the Tories out of office, at a time when a huge percentage of MPs (mostly with the Bloc) need only one more year in office to qualify for their fat taxpayer funded pension and we all know exactly what they’ll do.

They’ll complain and attack each other for political advantage, protect their own incomes, ensure that 45 members of a party bent on splitting Canada apart get a good federally funded pension and they’ll do all of this, knowing full well that at the end of the day none of it will help the unemployed who need EI to survive.

On the topic of EI, I’m sick and tired of the rhetoric surrounding how many hours it takes to qualify. Once again the political elite and pundits have pulled Newfoundland and Labrador out of their back pockets (or from slightly to one side of it) in an effort to show how unfair the rest of the Country is being treated and how easy Newfoundlanders have it on the “rock”.

The latest trend these days is to compare the number of hours necessary to qualify in BC or Ontario, between 600 and 700 hours, while, and I quote, “…in most parts of Newfoundland it’s almost a God given right to collect and you only need the minimum of 420 hours”.

What they never mention is that the high number of hours quoted for Ontario, BC (or what ever province is the flavor of the day) is what’s needed in urban areas with low unemployment rates. By comparison, in the North East Avalon region (call it the St. John’s area if you like) you also need more than 600 hours to qualify, just as in most urban parts of Canada.

While I’m on the subject, they also don’t inform anyone that roughly half the population of Newfoundland and Labrador lives in that particular area or that in parts of Ontario and BC and across Canada there are rural areas, just like those in Newfoundland and Labrador, where the minimum number of hours are all anyone needs.

The only difference between Newfoundland and Labrador, when it comes to EI qualification, is that many other provinces have far more people living in those rural areas than Newfoundland and Labrador does and as a result are more likely to have large numbers collecting EI, or as Jim Flaherty is likely to refer to them these days, “EI finalists”.

Personally I don’t like the idea of someone only having a job for 45 days being able to collect EI for a year. On that one point Stephen Harper and I can agree, but really, why all the bawling and blaring over EI anyway? To hear Steve and Diamond Jim Flaherty talk about it you’d think lowering the number of hours required was going to crush Canada and send the national debt spiraling into some bottomless abyss.

It seems they’ve conveniently forgotten something. For years the Canadian debt was paid down by siphoning off EI premiums meant to be used in just the sort of situation the Country finds itself in today. Billions were diverted over the years to debt reduction instead of being put aside for income support. Some estimates put the figure at $50 billion or more.

In other words the comparatively low Canadian debt the Harper government is so happy to talk about in these hard times is there, in large part, thanks to $50 billion in EI premiums that were collected from individuals and businesses who thought they were paying an insurance premium. If the debt now needs to be increased by a billion or two in order to see workers and families through the tough times it’s only fair Mr. Flaherty get off his high horse and pony up.

But of course he won’t and the reason is simple.

Any increase in EI costs would impact the federal budget and debt. If, on the other hand, a large percentage of laid off workers don’t qualify for EI and instead have resort to joining the welfare rolls it’s a provincial cost to deal with and who really thinks Ottawa could give a crap about provincial deficits or crushing debt loads?

So what lessons can we take away from all of this?

1. Canada’s politicians are very concerned about job losses and stabilizing family incomes, primarily their own;

2. Money to bail out corporations in major urban centers and protect tens of thousands of jobs– Good. Money to bail out industries in rural areas and save hundreds of thousands of jobs – Bad;

3. Canada’s growing deficit isn’t the result of large corporate bailouts or unchecked federal spending. It’s being caused by laid off workers who paid into EI and who would now like to collect a little of the insurance they paid for; and

4. No matter how bad things get, or how much they improve, someone will always find a way to crap on Newfoundland and Labrador simply because it exists.

Not Quite Shovel Ready

As much as I hate to publicly admit it, during some of my weaker moments I’ve actually wondered if I have what it takes to enter the political arena.

To tell the truth I’ve actually been asked several times to consider exactly that. The suggestion has come both from serious proponents and those with less than complimentary opinions who have challenged me to either put up or shut up.

Without exception my answer has been a resounding no.

It’s not that I wouldn’t love to do more for the people with whom I share this corner of our planet but I question if I’m cut out for it.

Of course I do what I can to bring Newfoundland and Labrador’s issues to the public eye on my own web site and through other publications kind enough to provide a home to my ramblings but I wonder if that’s really enough.

In recent years I’ve also spent time quietly offering my assistance to various grassroots organizations, both political and social, as well as making my thoughts clearly understood by those elected officials willing to listen, as well as those who would prefer not. But to actually make a living as a politician – well it’s just something that remains a foreign concept to me.

I’ve always thought my biggest concern about taking something like that on was whether or not I actually have the leathery hide necessary to tackle the job. Putting that aside for a moment I also have to ask myself what more I could possibly say or do about the issues facing this place if I suddenly found myself on the election trail.

Don’t get me wrong, I have a very clear position on many of the problems facing Newfoundland and Labrador but that’s actually the crux of my problem isn’t it.

I mean what if I had to concern myself, not only with the problems at hand, but also with protecting my political future, both inside a mainstream party and with the voting public?

What if my party decided, as political parties are wont to do, that the needs of a more vote rich region of the Country should take priority over those of the people whom I profess to represent? How would I handle that?

What if I had to put the interests of my party on an equal or perhaps even greater footing than those of my constituents?

Could I do it? Would I even want to?

Under those circumstances I’m willing to bet I’d find myself suffering from a very terminal case of political suicide in record time.

Let’s take the economic turmoil we’re all facing these days. If I was on the election trail do I really hear myself saying things like…

“If elected I’ll see to it that each of your concerns are fully understood and acted upon in Ottawa.”

“Our party (pick party of choice) under (pick leader of choice) will see to it that the needs of Newfoundland and Labrador are not forgotten or callously swept aside during these hard economic times.”

“It won’t be easy but with your help and support we’ll make it happen together.”

“The former government (pick one) has painted our Province and our nation into a corner. For far too long they’ve ignored the concerns of the average working man and woman in Newfoundland and Labrador and right across this great Country. Once elected our party will see to it that this never happens again, no sir, not on our watch”

“I promise that if elected, within 30 days of entering office, our leader will form an expert committee to review the critical issues facing us today and we will bring forward a clear, concise and actionable list of recommendations to address the issues in a timely manner”

“At the end of the day we will ensure that there is a roof over the head and food on the table of every Newfoundlander and Labradorian.”

“We’ll see to it that there are shovels in the ground so every decent and hard working Newfoundlander and Labradorian in this great Province can hold their head up high without having to worry about how they’ll pay their bills or if they’ll lose their home.”

“On that you can depend.”

No, I honestly can’t see myself doing that.

Upon reflection, perhaps it isn’t my lack of a thick skin that’s kept me out of the political arena for so long. More likely it’s my extremely low tolerance for the utter B.S. demanded of those who choose that path.

I guess I’ll just keep on doing what I do and leave the politics to those better suited to the role.

One thought does occur to me though. Perhaps I’ll take what few savings I have and invest them in a good shovel factory someplace. In more ways than one the demand for shovels seems to be growing with each passing day.

Federal Budget Will Do Litttle for NL Economy

With less than a week to go before the Harper government brings down its much anticipated budget, speculation about what it will contain is rampant.

Across Canada Provincial Premiers, Mayors, lobby groups, business interests and individuals have spent weeks pushing for their piece of the pie. With just a few days left to go the question is which line items will actually appear in the Harper stimulus package and how will it be distributed across the land.

The most likely outcome of next week's budget will see the Harper Conservatives deliver a two pronged approach with support for ailing industry sectors and individuals across Canada as well as a pot of money for infrastructure spending in specific regions.

Unfortunately, even if this broad approach is taken, it will mean very little for Newfoundland and Labrador and here’s why.

Industry Specific Support:

The sectors being most often discussed and touted as needing federal support are manufacturing and forestry. Neither of which are prevalent in Newfoundland and Labrador, with the exception of the Corner Brook paper mill. Abitibi has already decided to close its doors in the Province and nothing is going to change that.

The fishing industry needs massive support. Not necessarily direct cash injections but with the collapse of the Icelandic banking sector, which has provided cash flow to the industry for years, loan guarantees or some other form of funding needs to be made available before the new season begins or the industry will be in dire straits.

Unfortunately the fishing industry has never been more than an afterthought during Ottawa’s discussions about industry stimulus and as a result will likely find little, if any, support in the new budget.

Individual Support:

When it comes to assisting individuals the federal direction seems to be focused on middle class tax cuts and the EI system.

Liberal leader, Michael Ignatieff (Iggy to his friends) has already said he won’t support across the board tax cuts. I can’t say I blame him on that point however since a small tax break that adds an extra $5 or $10 to an individual’s paycheck isn’t likely to make them rush out and gleefully spend the economy out of recession.

As for changes to the EI program that’s an entirely different kettle of fish but...

The EI fund has been so mismanaged and abused by Ottawa over the years that there may not be enough left in the pot to support the massive numbers of unemployed about to enter the current system, let alone one that has undergone an overhaul.

Even with an influx of new funds from Ottawa the most likely changes possible will be to shorten the waiting period by a week, extend the benefit period and lower the number of weeks required to qualify in certain areas.

Currently anyone living in places like Toronto, for example, requires more weeks to qualify and they are eligible to receive benefits for a shorter period of time than someone say in Newfoundland and Labrador.

The reasoning behind the existing approach is simple. Ontario has an unemployment rate of just over 6% while Newfoundland and Labrador has a rate of over 13%. As a result, under normal conditions, it ought to be much easier to find a new job in Toronto, in a shorter period of time, than it would be in Newfoundland and Labrador, but these aren't normal conditions.

With the economy the way it is these days finding a job, even in Toronto, may not be quite as easy as it once was. With this in mind any extension of benefits or lowering of requirements will likely bring places like Toronto in line with places like Newfoundland and Labrador. There’s nothing wrong with that under the circumstances but once again, it does nothing to help the economy in Canada’s Far East.

Regional Infrastructure Spending:

The third prong of a likely Stephen Harper stimulus package is infrastructure spending. Once again there will likely be very little benefit here for the Province of Newfoundland and Labrador.

It's not that the Province doesn't have any infrastructure needs, far from it. There are projects that have been on hold for years and are more than ready to go. The Trans Labrador highway immediately springs to mind as does rural broadband, bridge repairs and many other initiatives.

The problem for Newfoundland and Labrador is that the Premier’s of vote rich provinces like Ontario, Quebec, Alberta and BC have been lobbying hard to have their infrastructure needs met and they contend that the best way to distribute funding is on a per capita basis.

This would mean that Ontario and Quebec, for example, with more than 60% of Canada’s population would capture an equivalent amount of the funding.

Newfoundland and Labrador on the other hand would get somewhere in the order of 1.5% of federal infrastucture funds intended to get people working, even though the Province has the highest unemployment rate in the Country and when Canada's newest so called "Have" province is facing the potential of upcoming deficits.

Indeed there is likely to be very little in the way of stimulus for the Newfoundland and Labrador economy at a time when mills are closing, mining giants are cutting production and black gold has lost more than two thirds of its value.

On January 27th all across Canada, from Vancouver Island to Halifax the masses will gather around their T.V. sets in an effort to parse every word dripping from Jim Flaherty's lips only to wonder what it all will mean for them and theirs.

Author’s Note – Usually I’m the first person to jump on my soap box when a statement like “…across Canada, from Vancouver Island to Halifax” is made but in this case the term was intentional rather than bred from ignorance or neglect.

When you consider the likely outcome of the federal budget, what reason is there for anyone in Newfoundland and Labrador to bother tuning in on that day unless they're so desperate for help they want to be the first to discover the value of whatever table scraps are once again tossed their way?

Newfoundland and Labrador's Economic Roller Coaster

What a difference a month can make.

Earlier this month Newfoundland and Labrador premier, Danny Williams, announced to the entire Country that “have” status was a reality in his province, even going so far as to plan a celebration of the fact in March of 2009.

Now, long before the party begins it could already be over and the tide may have turned in the other direction.

Because of the turnaround cycle for calculating which provinces will or will not receive equalization, Newfoundland and Labrador will likely remain a “have” province, at least on paper, this year and next, but that label could be worth about as much as a beach front lot in New Orleans if the current trends continue.

Don’t get your party hats and noise makers ready just yet folks there’s a storm on the horizon.

The coffers of the Newfoundland and Labrador government will not be as flush with cash next year as the Williams government had hoped when the premier announced the province’s new status.

The reasons are varied, but one of the biggest has to do with the diversity of the Newfoundland and Labrador economy, or should I say the lack of diversity.

In the past decade or so the province has become more and more reliant on a flood of petro-dollars, petro-dollars that now account for about a third of all provincial revenues.

Since Williams’ “have” status announcement world oil prices, which reached nearly $150.00 a barrel earlier this year, have plummeted to the $50.00 mark, shedding nearly two thirds of their value and putting a major dent in provincial revenues.

As if this wasn’t bad enough, adding to problem for Newfoundland and Labrador is the announcement this week that production on the Hibernia, White Rose and Terra Nova oil fields will be shut down for several weeks in 2009 to accommodate maintenance and upgrade efforts.

During the summer of 2009 production at the 130,000 barrel per day Terra Nova and 110,000 per day White Rose fields will be shut down for a period of 35 days each.

The Hibernia field, which produces in the area of 150,000 barrels per day, will shut down for 21 days.

The combined impact of these closures will see a reduction in annual production of approximately 12 million barrels of oil and a serious drop in the provincial royalty revenues to go right along with it.

Nations around the world are entering a recession the likes of which has not been seen in many years, if it’s ever been seen before (the jury is still out on the severity of the situation).

One thing is certain, the current downturn has resulted in a dwindling demand for all natural resources, not just oil but also iron ore, nickel and forest products as well. This has led to a much lower value for those commodities and another drop in potential provincial revenues.

Adding to these concerns are reports that yet another component of the Newfoundland and Labrador economy is shedding value.

For years millions of dollars have been flowing into the Newfoundland and Labrador economy in the form of Fort Mac pay cheques but that revenue stream is taking a hit as well.

Many residents who have been forced to leave their homes to work out west have retained their residences here and continued to pay taxes and spend much of their income in the province, boosting the retail sector and housing markets.

Now, with the price of oil declining, even the once invincible Fort Mac is beginning to stagger a little. New projects and expansions have been put on hold and layoffs out west are being reported more and more each day.

With a provincial unemployment rate already well over 13%, this most recent economic “perfect storm” to hit our shores has left the outlook for Canada’s newest “have” province a lot less bright today than it was just a month ago.

It’s been said before, and it may be easier said than done, but I sincerely hope this bump in the road (perhaps the understatement of the year) finally makes federal, provincial and municipal governments, along with the private sector, understand that we need to diversify our economy.

Those petro-dollars and other resource revenues the province has been enjoying for so long can be as much of a curse as they are a blessing and they truly won’t last forever.

The terms “have” and “have not” are best left to accountants. When it comes to the impending reality of even higher unemployment, lost homes and lineups at food banks those words mean absolutely nothing.

Regardless of whether the global economic meltdown turns out to be a prolonged and painful one or merely a blip on the radar, what matters most is the ability of the people living here to find a job and put food on the table.

It’s only by diversifying the economy and becoming less and less dependent on the volatile pricing of natural resources, be it oil, minerals, timber or even fish, that Newfoundland and Labrador can ever hope to become a true “have” province in every sense of the word.

It’s not that difficult to understand when you really think about it. Even as children most of us heard the old adage “you don’t put all your eggs in one basket”.

I only hope that today’s political and business leaders finally see the wisdom in those words.

Newfoundland & Labrador No Longer Only Atlantic "Ghetto"

Nova Scotia is a “low-wage ghetto,” according to the co-author of a report released today.

The report recently co-written by Professor Larry Haiven of Saint Mary’s University in Halifax shows that while productivity has increased over the past 20 years in Nova Scotia wages have lagged behind.

“If workers have been contributing to an overall productivity increase, then what have they gotten out of it? The answer is nothing”, says Professor Haiven.

“Workers are actually making less than they did 20 years ago.”

According to the professor, Nova Scotia has the third highest number of low-paid workers in Canada, behind P.E.I and Newfoundland & Labrador and has the third lowest hourly wage, just a little better than New Brunswick and Newfoundland & Labrador.

The situation has led professor Haiven to label Nova Scotia as a “low-wage ghetto”, a term reminiscent of Globe and Mail columnist Margaret Wente’s attack a short while back when she referred to Newfoundland & Labrador as a “scenic welfare ghetto”.

The report goes on to say that increases in profits over the years are not filtering down to workers but instead are being raked in by the business community. No doubt this is a valid point but the reasoning given in the report, that corporate executives believe workers in Atlantic Canada are somehow less productive, is a little off base.

Having been a part of the work force with a major corporation in Newfoundland & Labrador for many years I’ve had the dubious honor of hearing executives speak of the true reason for not increasing wages and misconceptions over productivity are not a factor. In fact my experience has shown a high level of productivity in the area.

The conversation around compensation usually boils down to one of supply and demand. If someone is working in Newfoundland & Labrador, for example, corporate leadership often feels that since there are few alternatives for that worker to find another competitive job in the region that worker will put up with what they get.

On the other hand, those working for the same company in, let’s say, Alberta, often receive higher wages and larger annual increases than their counterparts in Atlantic Canada doing the same job.

Let’s face it, corporations are in the business of making money. It’s that simple. In that sense it’s hard to blame them for taking advantage of any opportunity to reduce costs and increase profits if they can get away with it. Remember that unemployment levels in Alberta are around 3.5% but better than 13% in Newfoundland and Labrador and more than double Alberta’s rate in the rest of Atlantic Canada.

This isn’t to say I agree with the status quo or condone these acts of corporate greed, quite the opposite, but we might as well face the facts.

The solution to the problem isn’t to attack industry for taking advantage of a situation that exists or to explain it away as a misperception about productivity. The answer is to remove any advantage they believe they have.

As the economy in this area improves through mega-projects, oil and gas developments and other development opportunities, the demand for workers in many fields will increase. It’s up to workers themselves to then pick and choose where they want to work and to walk away from any employer who is not willing to provide them with a reasonable salary and benefits package.

Taking this approach will soon see the tables turn.

Yes, there will be moaning and groaning from the business community but that’s life. We are already beginning to see this happen.

Even with a 13% unemployment rate and with thousands of citizens migrating back and forth to work in Fort MacMurray, there are constant reports of companies in Newfoundland & Labrador complaining that they can’t find enough workers to meet their growing needs or to staff planned future projects.

Too bad! Do something about it.

The management of these companies always follow up on their plea for help by saying that, “of course we can’t compete with wages in Alberta.”

My question is, “Why the hell not?”

The cost of raw materials, jurisdictional tax regimes, etc, being relatively similar across Canada how is it that a company in Alberta, Ontario or for that matter EVERY other jurisdiction right across Canada can offer higher wages than a company in Newfoundland & Labrador?

It’s B.S.

The truth is that they can and will pay more if they want to stay in business.

The reason wages are low is because for years companies have gotten away with it because there were few alternatives for anyone who wanted to work. Those days are quickly coming to an end and if the companies out there whining about a lack of workers don’t solve their own problem by paying a competitive salary then they might as well close up shop, get out of the way and let someone else come in who will.

As angry as Ms. Wente’s, “scenic ghetto” remark made many people in Newfoundland & Labrador feel, including yours truly, there is little doubt the strong wording used by Professor Haiven will have a similar effect in Nova Scotia.

The term used by Professor Haiven about his home province may have been harsh but it begs the question, “What should we call a “Have” province, like Newfoundland & Labrador, that has even lower average wages and a larger number of low-paid workers than a “Have Not” province like Nova Scotia?

Prime Minister Stephen Harper would likely call it a place suffering from a distinct “culture of defeat”. Personally I don’t believe that sort of defeatist attitude ever existed here and I find the current situation disgusting. I also believe it’s one that won’t last much longer.

With new projects planned to come to fruition in Newfoundland & Labrador over the next several years it’s time for any company operating in this region to begin treating local staff in the same way as workers are treated in the rest of Canada. The days of the free ride and of quasi-slave labor are over. Any companies that have become dependent for their survival on that little extra edge they gained by offering low salaries or who simply don’t want to level the playing field won’t last much longer.

On the bright side, for any company management who feel bad about having to close up shop, there is a bright side. With any luck they can find a well paying job out West like they’ve watched so many others do.

Newfoundland and Labrador Politicians Ignore Golden Economic Opportunity

With an election getting underway in Newfoundland and Labrador the political parties will soon begin promoting their platforms in earnest and talking up their vision of the future. Most of their talking points will revolve around saving rural areas, economic development, outmigration and natural resources.

While the election goes ahead there is an opportunity already on our doorstep that can help revitalize some rural areas, drastically improve economic activity in the province, reverse outmigration and allow us to leverage our natural resources. Unfortunately all the mainstream parties are giving it very little attention.

As sad as the reality of the situation is, decades of government and industry inaction on global warming has opened up a major economic opportunity for Newfoundland and Labrador. One that could dramatically reshape our reality, put us front and center on the international stage and drive massive growth. The opportunity is real but it will never be realized unless someone acts soon.

The latest satellite images show that polar ice is melting at a staggering rate, far faster than anyone previously projected. As a result, it was announced this week that the much dreamed of Northwest Passage is, as I write this article, ice-free and navigable. It’s a reality that will become more common place and last for longer and longer periods of time in the coming years.

While governments around the world spend their time disputing ownership of the passage shipping companies, oil and gas enterprises and manufacturing giants are wasting no time preparing to fully utilize the route as a cost effective means of transporting goods and materials worldwide. While those two camps are busily planning for this reality Newfoundland and Labrador's political leaders are all but ignoring it.

The ability to use the North West Passage as a shipping route will allow commercial vessels to cut thousands of miles off their journeys around the world, save billions of dollars in costs and increase transportation efficiency by allowing the use of so called Post Panamax vessels, ships far too large to navigate the Panama Canal.

Already B.C. is touting the passage as an “express trade corridor” to Asia. The developers of a new shipping terminal that opened in Prince Rupert this week are banking on a largely ice free passage to cut more than two days and nine thousand kilometers off shipment times between Europe and Asia. This will result in huge savings for industry and open up unheard of opportunities for northern ports.

Considering that B.C. sits on Canada’s west coast approaches to the North West Passage it makes perfect sense that the province should position itself as a preferred port of call. The question then becomes, why is Newfoundland and Labrador not doing more to ensure its full participation in this new world reality?

Just as BC sits on Canada’s Western approaches to the North West Passage, Newfoundland and Labrador, not Nova Scotia, sits on its eastern approaches. Why then have talks been underway for years regarding an Atlantic Gateway concept that would see Nova Scotia take full advantage of the situation instead of the true Atlantic Gateway province Newfoundland and Labrador?




A quick look at any map of North America clearly indicates that Newfoundland and Labrador is in a perfect location to act as a port of call for ships traversing the passage on their way to and from Europe or up the St. Lawrence Seaway.

The province sits on the most easterly edge of North America, is closer to Europe than any other North American port and, in the case of large Post Panamax vessels, needing to offload to smaller ships that can navigate the St. Lawrence Seaway, the straits between Labrador and Newfoundland provide much easier access than does Nova Scotia.

So why are no major plans being touted for the province?

Newfoundland and Labrador has many available ports that could serve as trans-shipment points. Some have very deep water and remain ice free all year round. While others, especially in Labrador, ice over in winter, the fact that shipping activity will only take place in the North during times when the North West Passage is ice free means this would does not pose a problem.

In addition to the province’s ideal geographical position between North America and Europe, it is also in a unique economic position because of its distinct relationship with France.

Just off the Newfoundland coast sit the French islands of St. Pierre and Miquelon. Due to the historical ties and physical proximity of these two French islands, special trade and co-operation agreements already exist that can be built upon to take full advantage of Canada’s NAFTA and France’s EU trade regulations in conjunction with new shipping opportunities.

Taking full advantage of this situation could bring new life and much needed employment to dying rural areas. It would allow Newfoundland and Labrador to once again adopt its historical position as a key international port of call. In addition to direct shipping activity, the influx of products and raw materials from around the world would also open up growth opportunities in manufacturing and help reduce the cost of importing consumer goods to the province.

So why is Newfoundland and Labrador so slow in getting out of the starting gate? This is not a new idea so why is nobody acting on it? There are individuals like, local entrepeneur David Rudofsky, who have been promoting this opportunity to government for years. Nobody seems to care.

With Nova Scotia already touting itself as the new Atlantic Gateway some people believe it’s already be too late for Newfoundland and Labrador to make its mark. I don’t believe that for a minute. Our neighbors in the Maritimes may be promoting themselves for this role but as I said in my opening, wanting something doesn’t make it so.

Business and industry operate under some pretty basic principles when you get right down to it. While Ottawa, for political reasons, may support one province over another when it comes to development funding and assistance the companies involved couldn’t care less about the politics of the situation. Their only interest is in finding the most cost effective means to produce and market their products. No matter what anyone says, if utilizing facilities in Newfoundland and Labrador can save them time and money over going somewhere else, that’s exactly what they’ll do.

The problem is, unless someone listens and acts soon the international business community will never get to make that choice.

The reality of today is not what it was a few years ago. New challenges and new opportunities abound, so why isn't this opportunity even a matter of discussion during the current election?