“Government has been given a blank cheque from Ottawa”, someone in the provincial Dipper office claims leader Jim Dinn said. “It should be a no-brainer that they prioritize addressing the crises in housing, affordability, and health first and foremost.”
Those words and a bunch of others are in the bog-standard news release the Dippers cranked out on Tuesday. It’s the same as the mind-numbing stuff local political parties crank out these days all the time. The New Democrats are no exception.
And true to form this appeared on Tuesday, talking about something that happened five days earlier. It was triggered particularly by a scrum finance minister Siobhan Coady had on Monday about changes to the Equalization program next year that will see the provincial government get a couple of hundred million in the next fiscal year - that would be starting in April 2024 - from the Equalization program. Check out Monday’s column for background.
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For her part, Coady was political instead of practical, just like Dinn and every other politician out there, anywhere in Canada about Equalization. Complex thing, she said, even though it really isn’t at all. Complex is what people in governments want her and you to believe. About making sure people in this province are treated fairly like other Canadians, she said.
“In fact,” Coady told reporters, “if [the federal government] had listened to us, we'd be receiving more in equalization [sic]."
In fact, there was never any chance at all the federal government would listen to the politicians in this or any other province who wanted to treat Canadians unfairly, which is what Coady’s idea would really do. Danny Williams tried it and got shut down, quite rightly. In 2004, Williams wanted to get an Equalization payment even after the government was so rich it didn’t qualify for government income top-up scheme. He failed.
And more recently Coady and her Liberal colleagues have gone after much the same thing, with precisely the same result: zero. The minor tweaks she mentioned in the scrum were just that: minor.
Coady moaned to reporters about Nova Scotia but to understand why they got a lot of money and Coady didn’t, look at the chart below. Specifically look at the grey bit, which is the non-resource revenue each government would get per person of it taxed at the national average taxation rate. Coady gets more than her Nova Scotia counterpart and on top of *that* she gets that black bit, which is another couple of thousand a head in the province that her Bluenoser colleague doesn’t get at all from anyone.
Then she gets Equalization on top of all that.
And she whines about it.
Practically, Coady and her friends in government have nothing to complain about.
Full stop.
They have plenty of cash.
She whined because whining is what politicians do to fill space or to distract. And since the reporters had little idea what any of this is really about they were asking about technical things that Coady is legit not technically able to answer them, nor should she be. It’s also irrelevant but no one apparently gave her talking points that put this in the proper context. So she filled space with a lot of noisy blankness.
The proper context would be that this couple of hundred million bucks doesn’t mean a damn thing practically. Coady will still have to borrow $700-odd million more this year than the $1.6 billion she expected to borrow just to keep the heat on in the schools and hospitals and prisons. She will likely have to borrow close to the same amount next year.
If we want to talk about Equalization, Coady will get her wish when oil and gas runs out. Doesn’t matter if we just pump all of it out of the ground and sell it or if the market for it dries up in the meantime. At some point in the next couple of decades, there won’t be oil and gas to drive the economy. Then Coady’s successor will get Equalization like we used to in the bad old days when federal hand-outs were half the provincial government’s income.
What people in this province should be talking about is how we can spur the private sector to create more jobs to add to what we have and eventually replace oil and gas. Might be wind energy. Most likely won’t be. So what else do we do? Well, there are plenty of things but it is always easier to whine about imagined disputes over Equalization than talk about real things. That’s especially true when literally no one in or out of politics except a couple of people want to talk about real problems and real things to solve them besides spending more money we don't have. By the by, check back here in the New Year for more on what the future could be.
An example of people who don’t want to talk about real things, is Jim Dinn and his imaginary blank cheque. Since 2009, Newfoundland and Labrador has been a changed place. The government is wealthier than it has ever been. People in the province are generally better off too. Per person and per household income is way up, on average. We are a “have” province.
What people ought to talk about is how we spend our money not chase after more handouts. We have plenty of cash. We just don’t spend it well or spend it efficiently. We waste much, which slows down the economy in more ways than it helps things. We don’t get more scholar for the dollar, as former education minister Phil Warren used to say.
Jim is sort of vaguely pointing that out but he is vague. Which isn’t surprising because generally politicians in this province shy away from talking about things that really matter. Jim is talking about homelessness now because the media are talking about tents. In 2019, his colleagues and predecessors weren’t giving two frigs about it even though homelessness was a big issue then, too. We should be talking about homelessness. But it will take more than 200 million bucks to start fixing homelessness but it is easier to talk about blank cheques next year than do anything meaningful today.
We ought to be talking about COVID, or more particularly the fact that the provincial health department has a serious problem with reporting on infection rates for the disease and - watch out for this one - we have an appallingly low vaccination rate among people who are most at risk of getting seriously sick and dying.
Then talk about excess deaths.
Or the growing backlog of heart surgeries despite promises that there was *no* impact of shutting down the health system for two and a half months during the first lock-down of COVID and restricting access until the end of the pandemic.
We ought to be talking about NALCOR, which still exists, by the way legally and in every other practical way. There’s been some chatter about the wind companies buying electricity from and selling surplus to the local grid. Regular readers know this is just one of the implications of these deals. And it’s one of many issues about these developments we should discussing in public, especially because it will absolutely, guaranteed cost ordinary ratepayers to cover the cost of some of it.
We should also worry when the purchases are justified by or somehow connected to NALCOR’s estimate of future demand. NALCOR and NL Hydro have a long history of cooking up bogus forecasts to justify pet projects and there’s no reason to believe their current forecasts of double the electricity demand as we have currently are anything but made up. Let's talk about that.
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Then there is Churchill Falls. We’ll come back to that in the New Year but expect a deal that gives away a lot in exchange for a little cash up front. There’s no accident Francois Legault brought up the idea of raising the price paid now rather than wait for a renewal in 2041. The Liberals want cash. Need cash. Muskrat Falls and a raft of other things are all gobbling up cash. Legault knows it. And that’s why, to paraphrase the movie Premier Andrew Furey quoted about showing him the money, Legault offered easy money and had Furey quand il disait «bonjour».
Politics in Newfoundland and Labrador has become a giant blank slate in more ways than one. That’s how we end the year and it will keep going that way into the New Year, the next election and beyond unless something happens to change the course.
Happy new year to you. All the best.