Clyde Wells is hardly a prophet of doom, but his sombre words are hard to ignore
Clyde Wells and his government did not mince words when the time came in early 1991 to reckon with a financial crisis.
"Mr. Speaker, this is a severe budget," Hubert Kitchen, the finance minister of the day, told the House of Assembly right off the bat while bringing down a budget that still stands out for its boldness, and — for its opponents — likely still leaves a sour taste.
Wells brought the Liberals to power in 1989, unseating the Tories after 17 years of rule. The Progressive Conservatives, who had just had a flashy leadership convention that wound up with Tom Rideout at the helm, had assumed that Wells — a lawyer who was precise with his words, and a vocabulary sometimes beyond the grasp of many folks — lacked the charisma to connect with voters.
The Liberals came to power that year by beating the Tories at the ground level: they had fewer votes overall (Wells notoriously lost his own race, against Tory deputy premier Lynn Verge) but won by a 10-seat margin, with many of those victories coming in dogfights decided with margins under 200 votes. (Tom Murphy won St. John's South by two votes.)
Before and after the campaign, Wells relied on a phrase — "fairness and balance" — countless times to describe how his government would work. Not the sexiest political slogan, but people got a sense that Wells was matter-of-fact.
On the campaign trail, the Liberal phrase that popped from brochures and literature was "Real Change," with a red swirl underneath the word "real" — a bit of a dig at Rideout, who was promising a change from the Peckford era, even though he had been a cabinet minister for half of it. My recollection is that it had resonated with many voters.
Fast-forward almost two years, and Wells laid out that "severe budget," which was fair phrasing, to be sure.
It eliminated 3,500 jobs in the public service, while spelling out that the province was, basically, broke and up against the wall. The national economy was at that point in recession, the provincial economy was in decline, and federal transfers — which the governments of the time relied upon mightily — were down.
Reaction from labour groups was furious. The ensuing campaign was called "Clyde Lied." Placard-waving groups dogged Wells's public appearances for the weeks that followed.
From the archives: See a June 1990 report on how trade unions campaigned against Clyde Wells
Wells had earned some considerable political capital to offset a stinging budget through his steadfast opposition to the Meech Lake constitutional accord.
A familiar ring is heard again
Wells revisited that era — and talked about Newfoundland and Labrador's grim fiscal realities of today — in a feature interview last week with my colleague Anthony Germain for CBC Radio's The Sunday Edition.
LISTEN: Click the player below to hear Anthony Germain's interview with Clyde Wells:
Wells recalled finding himself against a fiscal wall, with choices that were all horrible. "The structural deficit, year after year, was resistant to any change that government could change at the time," said Wells, now 82, describing how Newfoundland and Labrador's debt had been climbing year over year.
It ought to; there are considerable parallels, even though the circumstances of 1991 are markedly different than now. Newfoundland and Labrador no longer receives federal equalization payments (cuts to which were a key trigger of the fiscal problems three decades ago); and the province is now reliant on oil revenues that didn't exist in the early 90s.
On The Sunday Edition, Wells had advice for whoever takes on the reins of power in the months ahead. (The Liberals will announce the winner of the leadership race between John Abbott and Andrew Furey on Aug. 3. A new election will need to be called within a year after that.)
'We can't go on like this'
The province's total debt now exceeds $20 billion, a lot of that notoriously linked to Muskrat Falls.
But Wells underscored that a great deal of the debt is not related to the hydroelectric power project, and directly related to government spending beyond its means.
"The direct provincial debt, for provincial government operations, has doubled in four years. More than doubled," said Wells, noting how that debt soared from $6.5 billion to $14 billion.
"It's obvious there's an inherent structural problem, driven by an excessively large public service, driven by pandering to public political pressure to do this and pay this, and not accepting responsibility for it, and not taking the case to the people."
Wells said the message should be, "look, here's the position we're in. We can't go on like this."
Foes of austerity will not like that kind of talk. (Tomorrow morning on this site, you can read the views of commentator Lori Lee Oates on this very subject.) No doubt labour groups — the ones that turned Clyde Lied into a rallying cry in 1991 — will fight cutbacks fiercely.
But Wells thinks the public will come around. Because, he says, they did before.
"First and foremost, be totally honest with the electorate," Wells told Germain, as advice for the political leadership waiting in the wings. "Don't go sugarcoating anything, fully disclose what you're doing, why you're doing it. Have a logical plan that will treat everybody fairly."
Wells's proof? In 1993, the Liberals handily won re-election, with more votes, and more seats.
"After four years of the most severe cutting, we had an increased majority," Wells noted. "So I'd be confident passing on that advice to the premier."