Premier Dwight Ball has been on the job less than a month, but as he looks ahead to 2016, he’s facing a monumental challenge, as the province faces a huge structural deficit driven by low commodity prices.
When people talk about the New Year, they often bring up the idea of making new beginnings. One can wipe the slate clean from one year to the next and take a new approach to life.
In Newfoundland and Labrador, there is a new beginning of sorts politically, with a Liberal government in place for the first time since the early millennium. They’ll now get a crack at attempting to reshape how this province’s affairs are managed.
At least, the party will supposedly get to give that a go. Before the Liberals were even elected, everyone knew the province’s finances were in rough shape given the plunging price of oil over the last year. Projected revenues fell sharply for the province, and just after the election victory the projected budget deficit in Newfoundland and Labrador for 2015-16 jumped from $1.1 billion to $1.8 billion. The last estimate just before Christmas suggested it'll be $1.96 billion.
Premier Dwight Ball may have taken a card or two from Prime Minister Justin Trudeau’s playbook in talking about the public’s thirst for hope and change, but one has to question whether he’s truly in a position to do much beyond making some hard choices.
Spending on health care and education will remain essential, but capital projects like new schools and health-care facilities could be placed on the back burner (those locally awaiting the replacement of Coley’s Point Primary may have to wait a little longer).
Ball campaigned on a promise not to introduce public sector layoffs. That’s all fine and dandy, but can he honestly expect attrition will be enough? This is a process the province went through in 2012, when the Dunderdale government set a target to cut spending by three per cent. Four years later, there’ll probably be a few more candidates willing to accept incentive-laden packages.
While the party was still in campaign mode, the Liberals said its deficit for the next year would be larger by $270 million over the current fiscal year. In light of the revised deficit, whatever was promised during the campaign needs to be fully reevaluated. That could mean upsetting some voters and reneging a bit on the promise of change.
In this New Year, change comes with a high cost. For the Liberals, it might be too high a price to pay.
Andrew Robinson is The Compass’ editor. He can be reached at email@example.com.