Nfld. & Labrador

You're mad at the wrong government: Now in opposition, PCs dodge blame for role in fiscal mess

If you only listened to the PC Opposition during question period this week you would be forgiven for thinking that 2003-2015 simply never happened.
Paul Davis, PC leader and former premier of Newfoundland and Labrador. (Sean Kilpatrick/The Canadian Press)

If you only listened to the PC Opposition during question period this week you would be forgiven for thinking that 2003-2015 simply never happened.

You might also think that Eastasia has always been at war with Oceania.

The howls of outrage emanating from the opposition benches are long and loud as the Progressive Conservatives seek to capitalize on the public anger over the toughest budget in a decade.

Make no mistake, Cathy Bennett's first budget is a doozy. It contains one of the biggest tax grabs in the province's history. Then there's the agonizing promise of deep cuts to public services and the public employees who provide them.

But the new finance minister had to make so many tough choices in this budget, largely because past Tory finance ministers refused to deal with the fiscal challenges the province was facing.

So it is interesting to watch question period in the wake of the budget, as the cross-floor banter is punctuated by opposition cries of "broken promises" or "shameful."

Finance Minister Cathy Bennett speaks to reporters before the release of her budget on Thursday. (CBC)

If you go back through the PC budgets,  you only find only three projected surpluses. Those were in 2006, 2007 and 2008. In every other year the government tabled and approved deficit budgets.

In many cases they were spared the red ink by a surge in oil prices or production that handed the Tories annual windfalls and took the pressure out of government decision making. Why make tough choices when the oil markets would always come to the rescue?

The lack of fiscal discipline became so endemic that the PC government started tabling deficit budgets in years when oil was in the triple digits. In 2012, former finance minister Tom Marshall projected a $258-million deficit when oil was pegged at $124 a barrel.

The core public service grew at a rapid pace from 6,900 employees to more than 9,000. The hiring spree was so aggressive, the government has to expand the parking lots at Confederation Building and buy new buildings to house the extra staff.

The single largest public sector contract in the province's history ballooned the payroll and dropped a liability bomb into the already underfunded pension plans. Throw in a series of deep income tax cuts, and the PCs committed taxpayers to billions in permanent structural costs, financed through temporary one-time revenues.

This budget was an expensive day of reckoning. And the PCs knew this was coming for years.

How else to explain the sudden talk of the need to "rightsize the government" that you started to hear from former premier Kathy Dunderdale in 2012, when the core public service was at its peak? Back then oil was still over $100, but Dunderdale was so concerned with the looming declines in production and a projected drop in price that she ordered a "core mandate analysis" of all government spending.

This was supposed to start the process of reining in spending. It was the launch of a 10-year prosperity plan to reduce the provincial debt.

It went nowhere.

Former N.L. Finance Minister Tom Marshall speaks with reporters before delivering the 2012 Newfoundland and Labrador budget. (Rob Antle/CBC)

In the first so-called "austerity budget" of 2012, the government eliminated 45 temporary jobs. Things got tougher in 2013 when Jerome Kennedy was elevated to finance minister. Kennedy cut more than 1,200 positions from the public sector but still ran a deficit of more than a half a billion dollars with a $105 barrel of oil.

And then the "rightsizing" stopped.

Kennedy quit politics to go back to the law. Dunderdale soon followed him out of office, driven out by the toxic cocktail of Muskrat Falls, Bill 29 and #DarkNL. The government lurched from Dunderdale to Tom Marshall to Frank Coleman, then back to Marshall before finally landing on Paul Davis.  

The PCs were in freefall. Everyone became too busy trying to save their job to actually do their job. There was no stomach to make hard choices when the PCs faced their own day of reckoning with the electorate.

Now in opposition, the PCs attack the Liberal tax hikes and spending cuts as if their government never set the table for these difficult choices. The PCs accuse Dwight Ball of being conflicted for his financial interests in a condominium development, as if they didn't serve under a premier whose blind trust acquired vast tracts of public land while he held office.

Like any opposition, the PCs want the public to be mad at the government. And they are.

But they are mad at the wrong government. This budget is the Liberals' problem. But it isn't their fault.

About the Author

David Cochrane is a senior reporter in CBC's Parliamentary bureau. He previously wrote for CBC Newfoundland and Labrador.


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