There is something vaguely creepy about the cover picture for this year’s budget.
Government budgets in Newfoundland and Labrador have used these sorts of generic pictures for quite a while now. In some years, the uncommunication bureaucrats have photoshopped different pictures that don’t belong together in a way that is almost a self-parody of their collective struggle with reality inside government.
Not so long ago, their job of those communications people was to connect government and the public with both sharing the same reality. But these days, there is only the disconnection between the reality the rest of us live in and the made-up world inside government. The job of government “uncommunications” people meanwhile is to pretend everyone inside The Building, as Confederation Building is commonly known, is not suffering from schizoid personality disorder.
The result this year is unsettling. Disturbed. Disturbing. More an image from The Babadook or Coraline than a government budget that is supposed to reassure and calm in a troubled time.
There’s a young girl. Standing on a rock in a stream in the woods. No one else around. She’s not dressed for a hike but for her house or backyard both of which seem to be very far away. She looks off to her left, over her shoulder. Apprehensive, as if she heard a noise. A frightening noise. A sign of something coming that will tear apart the gentle scene of bright sunshine and trees and babbling brook on what is a warm summer’s day.
To suggest this image is deliberately unsettling is probably giving too much credit to whoever thought it was the right picture. It is at best an unconscious insight into someone’s hellish mental state as they struggle with the financial horrorshow budget that is very much out of step with reality. There is a new Premier coming soon after all and the world is changing. Andrew Furey will not be around in another few weeks and Coady is hanging around despite the insult Furey showed her of not leaving her as Premier if only for a month or so until one of the Johns gets the job for real.
Coady brags in an online promotional video for the new budget that since Andrew Furey took office in 2020, the amount government spends on health care is now 40% more than it was. As if that were a good thing given there has been no improvement in any health outcomes, let alone anything as grand as 40% better. Spending 40% more and getting exactly the same outcome is worse, not better. Adding 40% more spending to a health system that was not underfunded in the first place is not smart. It is pretty stupid, actually. Do it in a mere four or five years is moronic.
Let’s not forget that at the front end of Furey’s time in office and for the last bits of Dwight Ball’s reign, the politicians and bureaucrats claimed that what they were doing during COVID, including shutting down the entire health system for a couple of months had absolutely no impact whatsoever on health care. No more deaths than normal, so they claimed anyway when there were thousands. No illnesses worsened, no backlogs of surgeries or patient visits, or anything of the sort and only later would they admit they had a backlog of cases and surgeries and tests and such. Furey gave medals to the people who were in charge of this , promoted others, and is now, thanks to the Health Accord’s plan to increase health spending even more, getting new offices to house the growing army of deadheads at the top of the health system and, we should remember, new refrigerators in the basement for the growing legion of unclaimed corpses of the poor and destitute at the receiving end on the 40% more expensive health care bureaucracy.
40% more on health care, you say.
Splendid!
This is the budget of tired politicians, with no ideas. We have seen this before. The crowd currently running the place are arguably worse than the usual. They have not delivered a throne speech, that is, laid out the government’s strategic priorities, since October 2022 even though they have changed directions and priorities all the while, as have the Liberals constantly since they got back to power in 2015. A windsock in a Wreckhouse gale is more constant in its direction and way less noisy about it.
Bureaucrats in Newfoundland and Labrador use Kafka as a how-to. Politicians do the same with Monty Python or Yes, Minister. The budget shown to the world on Wednesday has no themes, even though the uncommunications branch of government has done its best to invent ideas, like the three words - Smarter. Stronger. Better. - to suggest some theme that might knit together the sprawling birch-broom-in-the-fits list of spending that is the actual budget speech.
There are no bigger themes in it, just a list of stuff they plan to do, which is the same as the stuff they did last year but more expensively. The stuff is small financially and small in any other sense. In one case literally less than a million dollars in a budget that will be, all up, the size of the entire public debt with everything piled into it when Danny Williams took over a government he thought was in hard financial shape. $12 billion.
One of the most ridiculous things in the Wednesday budget, one sign of a government without a clue let alone a thought, is the $30 million offered up to help Big Oil drill holes in the offshore. All bad enough the Liberals, including Coady, started out in 2015 promising to end our dependence on oil and now have a budget that obsesses about oil as the key to a return to a balance.
Put that to one side. Let us instead look at the lie that the government intends to return to a balance in the first place. Not going to happen. The current crowd have no more intention of balancing the government’s books than the crowds before them back to 2003 whose only budget plan has been to spend ever larger amounts based on oil income and new debt. This bunch are even worse since the gap between income and spending in their budget this year - that is, the deficit - is $2.5 billion. Last year, it was $2.0 billion.
This year Coady told reporters the deficit in the government’s spending plan was only $300-odd million. No one asked her to explain how you could have a deficit of $300-ish million and have to borrow more than seven times that just to balance the books.
No. one. asked.
They just reported what Coady said even thought it was clearly nonsense.
No one asked her to explain why it would be that a contingency fund set aside in the budget to help with the fallout from Donald Trump’s Tariff Tirades would increase the deficit. If it’s in the budget, then it should already be included in the deficit projection since we should assume that the government will spend what’s on the page. That’s what a budget is: a spending plan. Well, supposedly.
No. one. asked.
They just reported what Coady said even though it was clearly nonsense.
No one asked her either why her budget expected oil to be at US$73 a barrel and climbing in years ahead when - in the face of Trump’s War on Sanity - bankers like Goldman Sachs and others had revised their future estimated prices for crude oil downward to about US$50 a barrel on average by the end of the year and lower after. They are not taking chances.
One dollar a barrel of oil more or less changes the provincial oil royalties by $30 million. Coady’s budget expects a deficit of $2.5 billion with oil royalties of about $1.6 billion. Oil will return us to balance, she told reporters, who did not snigger to let on they knew the joke, even if by some miracle they did.
Oil at $23 a barrel less than Coady’s forecast would increase the size of the deficit this year by about $700 million.
So, not the $2.5 billion planned but now $3.1 billion.
No. one. asked.
No one asked why it is that Donald Trump’s existential threat to Canada, the global recession he is likely to trigger, will only cost this province $200 million to deal with.
No one asked where the other changes were that we’d need now that - as the Prime Minister has said - our relationship with the United States has changed fundamentally. Where were the policies and the changes in the budget to go with that? Staying the course when the iceberg has loomed in front of the ship a few feet off the larboard bow hardly seems like a … what’s the word… smart thing to do. Not smart. Not strong. Not good or better or best.
Nor nimble either although Coady used that word laughably as well to describe the government’s plan.
No.
Not nimble.
Plodding.
This budget and the trivial size of the announcements in Coady’s speech do not line up with the garment-rending, teeth-grinding, Earth-quaking nature of the changes unfolding on the news each night. Such is the beast crashing out of the bushes at us - like the little girl in the picture - that for the past six months Andrew Furey’s been spittling any microphone within a thousand miles. Such is the dread he has for what is coming.
A couple of hundred million bucks is all we’ll need. Maybe.
No asked Coady to make all those things line up, words and actions.
No. one. asked.
Go back to that drilling program of $30 million a year for each of three years.
This is like the Liberal plan to double oil production by 2030, which is still the plan.
Oil will be our salvation, yet again, Coady said on Wednesday or words to that effect.
And yet a mere $30 million is all it will take to get us started.
Sure.
The typical well drilled offshore Newfoundland and Labrador since 1997 costs about $100 million to drill or around $27,000 a metre. That is in shallow water. The Orphan Basin is water as deep as the wells are under the sea floor. They cost much more.
Oil companies drilled 167 exploration wells offshore between 1966 and 2016. As Mark Kaiser noted in his 2021 paper “A Review of Exploration, Development, and Production Cost Offshore Newfoundland,” oil companies “have spent $84 billion Canadian dollars in exploration, development, and production offshore Newfoundland, Canada, between 1966 and 2019, and have produced about 2 billion barrels of an estimated 3.3 billion barrels recoverable oil.”
What in the name of Our Dear Premier might Furey, Coady and that crowd imagine we could get for - in total - not even the price of a single well in one year? To double production, we’d need to see that 167 wells drilled again or something anigh’st it just on the off chance they’d find just one more commercially viable oil or gas discovery, let alone the four or more they’d need to double existing offshore production. And they’d have to do that in five years as opposed to the decade they originally gave themselves.
Let’s round it down to 150 wells. At $100 million a pop, that’s $15 billion. Over five years, that’s $3 billion annually or the amount that Coady will have to borrow this year alone for the deficit her budget really calls for.
That’s 30 wells a year.
The image with the pastel yellow colour shows the number of wells of all types drilled offshore, by year since 1966. In 2002, the largest ever year of drilling, the operators drilled a total of 26 wells, only a fraction of which were for exploration. You know where this is going. If the provincial government were serious about this oil business, they’d have to do a lot better than $30 million in one year to get anywhere with their supposed plan.
They are not serious about oil.
They are not serious about balancing the budget.
They are not serious about diversifying the economy, interprovincial free trade, immigration, transformation, or anything else.
They are not serious about anything.
No.
They are not serious.
We, on the other hand, we are worse off.
We are in big trouble.
Our Total Debt Service Ratio is 10.9% for 2023-2024. If Nfld was a country, the Bonds would be given BB or speculative "junk" status. Only thing saving nfld from Junk status must be Canada guaranteeing some of the debt.
And we spend more on debt servicing than Education. What a disaster.