Premier's Latest Fiscal Message Raises

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Saturday, January 6, 2018

January 6, 2018


For Immediate Release




Premier's Latest Fiscal Message Raises Serious Questions About Leadership and Understanding of What It Means To Be Part of the Canadian Federation


Keith Hutchings, Finance Critic for the Official Opposition, said, "Premier Ball's fiscal messaging this week raises serious questions about his leadership and his interpretation of what it means to be a member of the Canadian federation."


Hutchings said, "As reported by various news media, the Premier said‎ his government has already made significant cuts in spending at the management level, yet neither the Premier nor the Finance Minister have been able to put a dollar figure on how much they have actually reduced spending.


“Before Premier Ball removed executive members, the Liberals went on a patronage hiring spree, putting friends and failed Liberal candidates in key management positions and then stepped up firing of others to make way for more appointments. It wasn't an exercise in fiscal prudence; it was an exercise in political patronage - the very thing the Premier promised not to do," said Hutchings.


"The Premier and Minister of Finance cannot tell us the fiscal impact of their executive cuts, and as they terminated some executive positions, new Liberal appointees were on the way in. This is the 'new fiscal management skills' the Premier spoke of? I challenge the Premier or Minister of Finance to produce the exact numbers showing the net savings their management measures have saved, once patronage hires have been factored into the equation.


"Unlike our administration, which met the oil revenue problem head on with a multi-year fiscal plan to get the province back to surplus by maximizing attrition measures and other initiatives while minimizing the consequences, the Ball administration kicked the can down the road - first to the fall budget, which they reneged on, and now to the 2018 budget, a year too late to begin what they needed to do a year ago."


Hutchings said, "Probably the most shocking part of the Premier's message this week was his statement about equalization, which is our constitutional right as a member of the Canadian federation."


As reported by The Telegram, the Premier told reporters that the government is looking to the 2019 renegotiation of the Canadian equalization formula. He said: "I would argue that the equalization formula is probably not even relevant for our confederation right now ... But that discussion will happen at that table.”


Hutchings asked, “When is it relevant if not today? Tell the people of our province who are being taxed on the purchase of books, whose home care hours have been cut, who pay the highest gas taxes in the country, who pay a levy to live here, who now pay more in personal income tax, and so much more, that equalization is not relevant. ‎Under the Constitution of Canada, it is reasonable level of taxation and reasonable level of service for Canadians, including Newfoundlanders and Labradorians. The equalization program is meant to balance that level for all Canadians,” said Hutchings.


‎"Six provinces are receiving equalization to cover revenue shortfalls right now, this year, under the current rules of the program - (which can be changed at any time) - which bar Newfoundland and Labrador from qualifying. We need the rules changed now, not two years from now, so that equalization can help to cover some of the oil revenue shortfall that we are experiencing right now. To hear the Premier say that he's prepared to wait until 2019 and that the formula is probably not even relevant to our Confederation right now is shocking. Why isn't he advocating for Newfoundland and Labrador to receive the fair share that we need?


"Quebec is getting $10 billion in equalization this year while at the same time Ottawa is investing another billion to invest in Quebec-based Bombardier while Newfoundland and Labrador gets zero. How is that fair? This is the same Quebec that Premier Ball now seems to want to enter into firm power purchase agreements with, so ‎that when the commodities markets rebound, we won't have enough surplus energy left to support the new mining operations in Labrador? Maybe the Premier's economic plan is to have us buy back our own power again, to support new mining operations in Labrador in the future. The Premier's economic planning is just as deficient as his fiscal planning, and both are leading the province to ruin,” said Hutchings.


"Equalization is entrenched in the country's Constitution as a basic right of provinces to be able to provide reasonably comparable levels of public service at reasonably comparable levels of taxation. It is not a small matter when the federal government is enforcing made-in-Ottawa rules that deny us what the Constitution promises us. Our people are being taxed to death because of our oil revenue shortfall, and they and their employers are deeply concerned that, instead of fighting for equalization fairness, the Premier is going to force them to bear all the pain. This rollercoaster ride of uncertainty is undermining our chances of weathering the fiscal storm. Yet, the Premier is not willing to fight his federal Liberal friends for fair treatment under the equalization program. ‎This calls into question his ability to lead.


"No wonder the vast majority of people are deeply dissatisfied with this Premier's leadership. Instead of serving the people of the province, he is bowing to the will of his federal masters. Instead of battling Ottawa for fairness, he is battling our province's people and destroying our economy in the process. As our people brace for yet another round of fear and uncertainty, the Liberals are heading into their fourteenth month without a viable fiscal plan, without a viable economic plan and without the willingness to stand up and fight for fairness for Newfoundland and Labrador," said Hutchings.


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Media Contact:


Heather MacLean


Director of Operations and Communications


Office of the Official Opposition


(709) 729 6105


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