Take Action NL Pledge for Candidates

When a candidate calls or knocks on your door regardless of party affiliation ask them if they agree to the TakeActionNL pledge. I will be emailing it out to all parties so I am hoping they will be aware of it if you ask.

Pledge: I acknowledge that Newfoundland and Labrador has reached the point that we must make significant changes in the way we manage our province from a fiscal, physical and mental health point of view.  I pledge to courageously and collaboratively be part of making decisions that create a sustainable and healthy province.  This will be my legacy.  

These are some of the areas that I believe we need to focus our efforts. (not part of the pledge)

  • From a fiscal, physical, and mental health perspective we need revolutionary transformation. 
  • We need to shift from reaction to prevention in all areas of Government. This has been proven to be more beneficial to society and also less expensive.
  • We need to make difficult decisions that tackle head-on taboo subjects such as
    • Underemployment
    • Poverty
    • Discrimination
    • Productivity
    • Accountability
    • Unsustainable communities
    • Size and cost of our public service
    • Unhealthy lifestyles
    • Sense of entitlement
    • Lack of education about our fiscal realities
  • We need to transform our education system so that it focuses on physical, mental, and financial health. We need to turn our schools, colleges, and university into areas of academic and sports excellence to ensure that our health, productivity, and economy continues to grow.

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Our Leaders Need to Step Up

Who are the elite in our society? They are the ones who are actually financially unaffected by Covid-19 and in particular are actually making more money this year than last. In Newfoundland and Labrador, most of our public servants are actually receiving a retroactive 2% raise back to April 1, 2020. They will receive a 1% raise again this April and 1% next April at a cost of $60 million/ year last year, $90 million next year and $120 million every year thereafter. This is all borrowed money. many will receive retroactive cheques of between $945-$2775 if they just signed. Recently Allied Health professionals, Teachers and CUPE all received these retroactive raises. They join NAPE, Nurses and ferry captains. The doctors and their NLMA are in negotiations at this time. The only ones left are the RNCA (Royal Newfoundland Constabulary Association) which expired last June and PAIRN (Professional Association of Interns and Residents).

We are in the middle of an election and our leaders are either avoiding the critical spending, deficit, and debt problems of our province or sugar-coating it. One party is proposing that we will grow our way out of these fatal problems. This is ill-informed and delusional. We have a $2 Billion problem and in order to solve it with growth we would need to double the following taxes:

1/ Personal Income Tax from $1.4 Billion to $2.8 Billion

2/ Corporate Income Tax from $323 Million to $646 Million

3/ Mining Tax from $112 Million to $224 Million

4/ Payroll (Health and Payroll Tax) from $115 Million to $230 Million

If it was possible to double these revenues (which it is not) this would bring in $1.95 Billion. This would solve the problem, however, there is no magical plan that could accomplish this. Please also remember that when we speak about Income tax and taxing the rich these are the numbers for Newfoundland and Labrador:

the top 1% pay 15.5% of tax

top 5% pay 36% of tax

Top 10% pay 51.4%

Top 50% pay 95% of tax

In Newfoundland and Labrador increasing taxes by 2% on the top 2 tax brackets would only raise $60 million per year assuming that these individuals did not move, rearrange their affairs or just not try as hard because of a lack on motivation due to excess taxation.

Now is the time to ask the difficult questions and make the decisions we have put off since 2011.

Where we are Financially

2021 NL Budget

We had heard rumblings that Dame Moya Greene had said that we had a 40% problem. We thought that seemed high so figured we would have a look. we have been saying for a long time that we have a 25% problem which as you can see we do.

$1.8 Billion(deficit)/$7.12 Billion (revenue) = 25% of spending.

The other way to look at it is if we take the $3 billion we need to borrow this year it is 42% of spending.

$3 Billion (borrowing)/$7.12 Billion(total revenue)= 42% of spending.

So the problem is between 25%-42%. Wrap your heads around that. Reduce everything by that much! This does not include paying back the over $34 billion that we owe. So we need to generate a surplus of $600 million per year for 50 years to pay off our debt.

If you go down through the spending you can see that 48% of our revenue goes to salaries and benefits.

$3.4 Billion(Compensation and benefits)/$7.12 Billion=48% of spending.

If you add the $353 Million we pay doctors then:

$3.8Billion(Compensation and benefits including Doctors)/$7.12Billion=54% of spending.

Let me be very direct. There is absolutely no way to save this province without dramatically rightsizing compensation. When you hear labour leaders, your friends, colleagues, leaders and MHA’s say that we need to create jobs…jobs…jobs just ask them where is the money coming from? How are they going to deal with the constant multi-billion-dollar borrowing that is going to get more expensive and may not even be possible?

Liberal Platform Financial, Education and Health Highlights

The Liberals released their Platform this afternoon (Thursday, February 4, 2021).
I have not had a chance to plow through the NDP plan but I will and the PC plan when it comes out.
I will say that there is a lot of long term vision in this document. I did not reproduce all the highlights.
There are incredible initiatives that are in others’ wheelhouse and I will let them comment on them if they choose. The initiatives on gender equity and aboriginal reconciliation and partnership, in particular, stand out.
The word sustainable appears 20 times and needs to be on all our lips as we move forward together.
This document is a roadmap that does gloss over the challenges we face with eliminating the $1.8 Billion deficit but it does put it out there and indicates that the government knows it has work to do.
Whoever is elected will need the support of their caucus, opposition, and all of us to pull our ship off the rocks, patch the holes and then get to work rebuilding the good ship Newfoundland and Labrador.
Overall Premier Andrew Furey, this a good indication of the heading we need to set our compass to. Well done.
Please take the time to have a read. A link is at the end of this post to a copy that I have highlighted.
1/ Given the Province’s current debt burden of over $16 Billion and with an annual deficit of $1.8 Billion, our plan for the Province focuses on economic and social growth that will make real improvements in people’s lives without further jeopardizing our financial footing.
2/ The Government commits to responsible debt management and will take steps to better manage that debt.
3/The Government will continue to work with the Federal Government to ensure that ratepayers do not bear the cost of the Muskrat Falls project and to identify opportunities for Newfoundland and Labrador to become the battery that powers the Eastern Seaboard
4/ hire the Province’s first Chief Economic Recovery Officer (CERO) – a non-partisan civil servant who will oversee the implementation of initiatives designed to grow our provincial economy for the future.
5/ expand access to healthcare in rural and remote regions of the Province through investments in eHealth/telemedicine
infrastructure, including mental health and pharmacy services
6/ A Government under Premier Furey’s leadership will make living a healthy, physically active life easier for all Newfoundlanders and Labradorians through the introduction of the Promoting Physical Activity (PPA) tax credit.
7/ Our Government will make Newfoundland and Labrador a healthy place to live, work, visit, and raise a family or grow a business.
7/The Government will task the Department of Education to lead this work with educators, experts in the field, and community organizations to rework the health curriculum and update it with the most recent findings on exercise, nutrition, substance use/abuse, relationship building, mental health, and sexual health
8/ Our Government will focus on entrepreneurship in schools across the Province, providing the education and inspiration for the next generation of innovators and founders creating a focus on entrepreneurship and new business creation in schools, Memorial University, and CNA.
9/ our Government will continue to improve educational opportunities for young Newfoundlanders and Labradorians seeking to enter the technology industry.
10/ We will develop a Remote Workers Pilot Project to increase long-term stays in and relocations to NL. Our Government will launch a marketing campaign consistent with our award-winning tourism campaigns to showcase Newfoundland and Labrador as a remote working destination of choice.
11/ Government will launch a Come Home Year 2022 campaign to accelerate growth in our tourism industry by targeting ex-pats and their families, and anyone seeking to explore Newfoundland and Labrador.
12/ work to position Newfoundland and Labrador as a national leader on immigrant settlement and retention.
• Our efforts will involve expanding opportunities for and further nurturing a sense of belonging among, newcomers to our Province.
• The Furey Government will collaborate with the Federal Government to add more categories aimed at addressing specific labour market shortages in Newfoundland and Labrador, in order to cultivate growth industries, thereby creating more employment opportunities and increasing our population.
• The Government will triple our provincial immigration target from 1,700 to 5,100 newcomers per year by 2026, aligning with the federal immigration targets.
13/ Focus on Attracting Film and Television Production. The government will promote creative and cultural industries as a priority growth area in our evolving economy.
14/ A clustered approach will create partnerships, synergies, and network effects that will propel the Province’s technology sector forward. Industry-specific tech clusters will drive investment in new businesses, create high-paying jobs and help strengthen our existing industries and communities
15/ We will collaborate with academia, the private sector, and the NL Innovation Council in the creation of “NL 2030”, a roadmap for research and development activity in the Province.
16/ Our Government will continue to support our vital oil and gas workers while collaborating with the private sector to ensure that our Province’s clean resources are developed in a responsible, sustainable fashion.
17/ We are committed to supporting and growing the province’s wild-caught fishing industry, guided by knowledge from DFO science, fish harvesters, and from other industry stakeholders
18/ The Government will strategically invest in the Province’s aquaculture industry so that it will have the competitive advantages it needs to succeed in the global marketplace Opportunities exist for NL to create new value, and capture more value, from processing and manufacturing right here at home.
19/ By investing in our educational institutions, fostering diversity in our industries, and building basic infrastructure, the Government will create the conditions necessary for Newfoundland and Labrador to realize its full potential as a global startup destination
20/ our Government will create InvestNL, a one-stop trade desk for investors to access opportunities in the Province.
21/ The government will require contractors bidding on Government of Newfoundland and Labrador infrastructure projects to prioritize the hiring of qualified workers based in Newfoundland and Labrador.
The complete platform can be found here: takeactionnl.com/dataandreports/nl-liberals-platform.pdf

Quick Summary of Notes for CBC Interview Feb 3, 2021

Some facts:
• We have almost not been able to make payroll twice since 2016 and we are poised to be in the same situation in 2021.
• We are borrowing $3 billion 2020-2021 fiscal year and the interest on this loan will cost us $1.8 billion over 20 years.
If you look at our spending this way:
• Our $1.8 billion deficit works out on a fiscal year of April to march that every dollar we spend after January 22 is unsustainable. Payroll, bandages in hospital, paper in printers all on credit.
• Even worse if you look at actual borrowing of $3 billion everything we spend after Oct 29 is borrowed.
• This does not include the PPP’s. Public Private Partnerships of $1.58 Billion which btw are like payday loans. The government can borrow money at between 1.75% and 3%. Large businesses use around 8% to 10% when costing large projects. The difference between 3% interest and 8.5% interest is $1.9 billion. At 1.75% = $2.2 Billion. This is an oversimplification but when Premier Ball said we would save 12% on construction costs he neglected to tell us it would cost between 120 and 140% more in financing costs.
• Our Health care expenses are projected to rise to between $4.7 and $6 billion in 20 years.
• Our debt servicing this year at $1.5 Billion is as much as the primary and secondary education plus Child, Seniors and Social Department combined.
• Our unfunded benefits liability went up $111 million this year

CD Howe Report:
• Our GDP would shrink between 6.5% and 10.9%
• We are spending 132% more per capita than the Canadian Average on programs and 133% more than the other Atlantic Provinces
• CD Howe also clearly state that we have to reduce program spending.

The disconnect:

• The average Public Servants earned prior to raise just signed $73000.  They just received a $1400 raise and in April another $700 and the next April another $770.  Now this is an average and there are many public servants who earn much less than this.  If you deduct the sunshine listers the numbers drop by $10000.
• The sunshine list just grew by 40% from $819 million in 2018 to $1.2 Billion in 2019.  That is 37% more of them as well from 6249-8799.  Average income $126500.
• The raises that were just signed will cost $2.3 billion over next 20 years assuming no more raises. 
• Bear in mind as well that we have over $8 billion in unfunded pensions and group health and life insurance benefits.  This does not include MUN’s ½ billion and Nalcor’s $125 million.  So as we increase compensation the pension’s increase because they are based on the best 5 years of pay.
• APEC determined that the Public service enjoyed a 12% premium on wages not including their generous pension and other benefits which is probably another 20%.  That was before Covid and raises.
• This is unsustainable.

Socioeconomic time bomb:
There are workers and business owners all around the province being devastated in the oil, tourism, and trades. Seeing their compensation drop dramatically and facing the possibility of losing everything they have worked their lives for is heartbreaking. Seeing their next-door neighbor receiving a raise is infuriating. After receiving raises Gerry Earle from NAPE and Debbie Forward from the nurses association complained about their members not receiving the essential workers’ top-up.
Then much of the government including our health care facilities went to summer hours with people desperately waiting for tests and treatments. Suffering needlessly.
Gerry Byrne announced a swimming pool for Corner Brook and Premier Ball announced a recreation center annex for Deer Lake. It is no wonder that the public cannot grasp our situation. Our leaders from all walks of life do not live in the real world and they sugarcoat our shared challenges.

Need a Box around our spending

We need a box around our spending. If you look at the last 10 years you could determine we have an $800 million structural deficit if you assume that the oil industry gets back online. What about:
If West White Rose GBS never gets finished and Come by Chance never reopens.

CD Howe says $7.4 Billion = $1.4 billion cut in spending.
Communities need to close
Nalcor needs to be rolled into Hydro
Compensation and overall government spending have to be reduced. As difficult as this sounds we cannot have a situation where the elite are people and businesses who are working for and selling to the government.

The world changed and we are never ever getting back to February. That gives us opportunity if we respond and a grave threat if we do not.

We cannot be guaranteed that the world’s economies will bounce back from the damage that is continuing to be done. Businesses generate the incomes and taxes that we all live on directly and indirectly whether they are government owned, charitable or privately held.

We have many challenges/ opportunities:
• Climate Change response will not help the oil industry which financed our government spending.
• The work from home revolution will impact commercial real estate which is a large part of all developed economies. This is an opportunity if we can capitalize on our position as one of the safest and most conveniently located jurisdictions in the pandemic and post-pandemic world.
• As businesses fail in NL, Canada, and the world the economic capacity will also shrink. Holding on to zombie companies and borrowing to keep them going may not be the best use for our limited fiscal capacity. The same goes for inflated public compensation.
• Muskrat Falls obviously.

Taxation:

Top 1% pay 15.5% of personal taxes
Top 5% pay 36%
Top 10% 51.4%
Top 50% 95.1%
Increasing taxes on top 2 tax brackets by 2% only raises $60 million

Companies already pay comparable taxation in NL

Selling of Assets
NLC $175 million in profit to the province plus the spin-offs into the economy in jobs. Does it make sense to sell this to a national or multinational company?

We all need to be part of the change

Nlers are incredibly resilient and have the ability to respond to almost any challenge. Our leaders need to lay out the facts then call on us to be part of the solutions.
Be just a little healthier
Don’t litter and pick up any you see
Become educated about our fiscal situation https://takeactionnl.com/
Call on your elected officials to make tough choices so our children don’t have to make tougher ones. We all need to be Heros now so they don’t have to be.