NL Budget 2022: On course for catastrophe

By Sean Burton 

Newfoundland and Labrador’s provincial budget, announced on April 7, was described by the local CBC as a “stay the course” budget and surprising because it ostensibly does not act on the “Big Reset” recommendations from last year’s Moya Greene Report.

Finance Minister Siobhan Coady insisted that the worst is over for the province with a reduced deficit, no major spending cuts and some apparent economic relief measures to “make life more affordable,” as one infographic proclaimed. But as is often the case, it is what isn’t in the budget that is a problem as well as the obvious misdirection in Coady’s upbeat assessment. For if this is a “stay the course” budget, what course might that be?

The threat of austerity has been hanging over the province since the Dwight Ball Liberal government was formed in 2015. Their 2016 budget infamously led to several thousand people protesting in front of the legislature building (top photo) despite which the government went ahead with some slight modifications that compelled residents to pay a “deficit reduction levy.” Now, economic decisions made in NL are in the shadow of Dame Moya Greene’s Provincial Economic Recovery Team (PERT) report released a year ago. As expected, it called for extensive public sector cuts, privatizations and rationalizations and regressive taxes. It means promoting corporate interests over those of the people and the planet. 

“Staying the course” in this budget means continuing the $68 million in cuts to Memorial University’s funding over the next five years with the university ending its long-standing tuition freeze and shifting more debt onto individual students. It means the continued slow death of healthcare services in rural parts of the province as costs rise to service an aging population with declining access to preventative care. “Making life more affordable” means pathetic crumbs like saving 50 percent of your car registration fees, slight increases for people receiving income supplements and rebates for purchasing electric vehicles (EVs) or converting an oil furnace to electric on owned property. There is a commitment to $10 per day daycare, but this only applies to regulated daycares which are few and largely private. Many people rely on home-based daycares and will not see this benefit. There is no commitment to improving public and mass transit. There is nothing to address sharply rising housing costs.

The budget pays lip service to a green transition, but as noted above some of those measures are up to individual action: it’s your furnace or your car to be converted. Low-income bus passes in the metro area are the only nod to public transit. These means-tested passes that will do nothing to combat the stigma of public transit use in this car-centric province. The government also removed its restrictions on private wind power development. The public gets to enjoy the debt of the Muskrat Falls dam built by Crown Corporation NALCOR while private developers apparently get first dibs on a source of power that is practically synonymous with Newfoundland and Labrador. 

To the surprise of no one, the government continues to focus on oil and gas as the primary source of growth and job creation. That meant considerable pressure from the provincial government on Ottawa to approve Equinor’s Bay du Nord oil field exploitation and Ottawa has accepted the conclusion from the Impact Assessment Agency that it would not have adverse environmental effects and that it would need to meet net zero emissions by 2050. How can the Liberals do that and at the same time claim to acknowledge the need to combat climate change and protect the environment? The premise being pushed by Premier Furey and Equinor is that Newfoundland and Labrador’s oil is clean or “low carbon.” That is apparently based on the ease of extraction from our oilfields relative to others. It takes less energy and therefore fewer emissions to acquire. The logical absurdity of this argument is obvious considering that most emissions come from actually using the oil. In any case, further oil and gas development is supposedly what the province is going to base its green transition upon. One may charitably presume that oil royalties will be set aside for some future green infrastructure like we are seeing with the piecemeal introduction of EVs and tax breaks or rebates for private conversions. 

But even if that argument is not convincing, the fact is that the underlying fear of economic collapse and unemployment drives many workers in this province to support the project, depending on oil and gas in the same way we depended for so long on the cod fishery. There is a fundamental misunderstanding of transition. Many workers here assume that it would mean an instant shut-down and a loss of their jobs and all that entails. This strawman argument must be countered with the understanding that a just transition means sustainable work will be made available for them and that their needs including retraining would be ensured.

But that is not the typical liberal approach, which is to provide some incentives and hope the market will do something. As we well know, the market only cares if there is a profit to be had and the drive for profit undermines the very concept of sustainability. EVs fall into this trap. True, they do not use gas, but their manufacture does require energy and resources. Simply replacing combustion engine vehicles with EVs on a one-to-one basis will replace one form of wastefulness, exploitation and pollution with another. Individual vehicles still have some utility, but a truly social response would place overwhelming emphasis on public mass transit and especially on public control and direction of resources to ensure a just transition for workers.  

Ultimately, this year’s budget once again demonstrates the government’s loyalty to corporate profit over people’s needs and the environment. The course being charted is one of catastrophe for the working class, taking a populist approach for developing more oil and gas because that is what we know for jobs and growth while setting the stage for future rationalizations in the name of “fiscal responsibility.”  


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