New Brunswick debt: what would Danny do?


Back in 2003 when Danny Williams was first elected premier, Newfoundland was deeply in debt. With a population two-thirds that of New Brunswick’s, it had a debt topping $11.5 billion—20 percent larger than our current debt of $9.6 billion. The Rock was on the rocks.

So what did Danny do? He donated his premier’s salary to the province and cut back. But before we look at the effects of that approach, let’s take a look at our own solutions.

Shawn Graham’s government’s attempt was to sell off money-losing assets, in other words, NB Power. Even though the deal wouldn’t have generated much cash for the province, at least it would stop the hemorrhaging—but the voters didn’t see it that way.

Over the course of the four-week election, Graham’s Liberals squared off with David Alward’s Progressive Conservatives. Neither had much of a plan to fight growing deficits—expected to be $800 million this year—and rising provincial debt.

Graham’s plan was simple. Put on rose-coloured glasses and create 20,000 new jobs. In his calculus the new jobs would add new revenues to the provincial coffers and balance provincial budgets. Inconveniently, the question of how to create these new jobs wasn’t addressed.

Alward took the safer tack. Knowing that the voters were out for Liberal blood, he promised…mostly nothing. He went into campaign rope-a-dope mode saying, “It is not going to be easy …It’s going to take time to bring the deficit down. We’re committed to doing it over a four-year period,” and promised a “responsible and comprehensive” economic plan for the campaign. When the “plan” came out, it mumbled on about fair property taxes, not hiking the HST, not lowering taxes any further for the wealthy, developing an unspecified energy plan and so on—while promising increased spending. Hardly the stuff to bang down a deficit that the provincial auditor general has projected will actually increase by another 33 percent.

By comparison Danny William’s first year in power was an all-out assault on the deficit—and a political disaster. He cut funds to three healthcare projects and a school, put the development of The Rooms tourism attraction on the back burner and tried to eliminate 4000 public sector jobs. The reaction was swift. The public sector went on strike and Danny was forced to legislate their return to work. His approval rating dropped to 39 percent. Rather than resolving the debt crisis, Danny had stalled his province.

And then he got lucky. Danny was saved by the energy sector. Newfoundland has two great energy resources: Churchill Falls and the Hebron Oil project. And in 2006, the size of the oil find was upgraded from 317 million barrels to 731 million barrels of recoverable oil. Danny was back in the game.

He took on Paul Martin’s federal Liberals (remember Danny taking down the Canadian flags?), which gave Newfoundland 100 percent of the tax resource revenues from the oil.

Fearing the same interception of oil revenues by the federal Conservatives, Danny took on Stephen Harper in the famous ABC—“Anything But Conservative—campaign, which denied the Harper government its majority. Danny’s perseverance fighting the feds paid off—with the creation of 3500 new jobs and a projected $20 billion in royalties from offshore oil. Goodbye provincial debt.

Danny stayed with the energy revenue plan. He publicly denounced the NB Power sale to Hydro Québec and as of last week inked a deal with the premier of Nova Scotia to joint venture a new power line from Labrador across the Gulf of St. Lawrence to take advantage of the expansion of the Churchill Falls hydro-electric facility. Now Nova Scotia is in the energy revenue game.

So where is New Brunswick? Our new finance minister, Blaine Higgs, says that the deficit could reach $1 billion by next year, and to prevent that is planning a 1 percent budget cut before the end of March, 2 percent in successive years, and is counting on some federal money in the form of a one-time tax settlement and tobacco tax revenues. Hardly a plan. Especially considering the federal government is starting to face its own mounting debt problems.

Given Danny William’s experience, if he were taking over the reins in New Brunswick I think he’d be looking long and hard at the revenue side of the balance sheet first. What does this government own that could generate cash? NB Power could—and should—be the third player in the Atlantic energy alliance, and would be the key tie-line to the U.S. eastern seaboard. There are also 4 gigawatts of potential power sitting in the Bay of Fundy tides, plus offshore wind power, which, admittedly are longer term opportunities and require aggressive carbon-reduction lobbying by our provincial government. But we can’t get there if we don’t start now.

In short, the new government needs a revenue-positive approach that focuses on the three strategic essentials: energy, sustainable environmental resources and enterprise. With that kind of a game plan, we might start looking past the next three years and actually create a new vision for New Brunswick.

Because working smarter is infinitely easier than clawing back. And adding to the unemployment lines does nothing to build a healthier province.


  1. "...adding to the unemployment lines does nothing to build a healthier province." ?


  2. Why? Increased social and financial costs: pressures on families, domestic violence, crime, substance abuse, mental health issues, loss of community pride, a entire spectrum of negative effects... see: Detroit.

  3. Why do you forecast that all of that will result, and nothing else mitigating, (let alone better) either?

  4. Hmm. Not quite sure I understand what you mean. If you mean why I'm forecasting increased social and financial costs, I would only forecast these if the Province pursued widespread layoffs of government workers resulting a significant rise in unemployment.

    What I would rather see the government pursue is a plan that aims to increase provincial revenues rather than dramatic cutbacks.

  5. I am not smarter or even as smart as an 80 year old, so please correct me if I am wrong in reading you right...

    Why are you visioning better improved expectations from what Gerald is saying he would like to see, moreso than from an alternate approach whereby Gerald would like to see the government pursue a plan to first/rather realize Her Majesty's vision?

    "But the pressures of modern life sometimes seem to be weakening the links which have traditionally kept us together as families and communities. As children grow up and develop their own sense of confidence and independence in the ever-changing technological environment, there is always the danger of a real divide opening up between young and old, based on unfamiliarity, ignorance or misunderstanding

    It is worth bearing in mind that all of our faith communities encourage the bridging of that divide. The wisdom and experience of the great religions point to the need to nurture and guide the young, and to encourage respect for the elderly. Christ himself told his disciples to let the children come to him, and Saint Paul reminded parents to be gentle with their children, and children to appreciate their parents. The scriptures and traditions of the other faiths enshrine the same fundamental guidance. It is very easy to concentrate on the differences between the religious faiths and to forget what they have in common - people of different faiths are bound together by the need to help the younger generation to become considerate and active citizens.

    And there is another cause for hope that we can do better in the future at bridging the generation gap. As older people remain more active for longer, the opportunities to look for new ways to bring young and old together are multiplying.

    As I look back on these past twelve months, marked in particular for me by the very generous response to my eightieth birthday, I especially value the opportunities I have had to meet young people. I am impressed by their energy and vitality, and by their ambition to learn and to travel.

    It makes me wonder what contribution older people can make to help them realise their ambitions. I am reminded of a lady of about my age who was asked by an earnest, little grand-daughter the other day "Granny, can you remember the Stone Age?" Whilst that may be going a bit far, the older generation are able to give a sense of context as well as the wisdom of experience which can be invaluable. Such advice and comfort are probably needed more often than younger people admit or older people recognise. I hope that this is something that all of us, young or old, can reflect on at this special time of year.

    For Christians, Christmas marks the birth of our Saviour, but it is also a wonderful occasion to bring the generations together in a shared festival of peace, tolerance and goodwill.

    I wish you all a very happy Christmas together. "

    -Christmas Message to the Commonwealth, 25 December 2006

  6. Hi Anon

    Thanks for sending a portion of this year's Queen's Christmas speech. I would have to say that her position and mine are not mutually exclusive. I agree with her comments, and, coincidentally, was thinking about the same thing last week: about the great contributions seniors could be making to our society—but for the fact that they are often marginalized.

    Bridging the generation gap, and combining all generational knowledge is a great way to improve our culture and our regional economy. Creating the tools to do this outside the family would be a good start—perhaps by introducing seniors-as-advisors into the education system at all levels.

    Again, thanks for your views.

  7. That particular Queen's Christmas message to the Commonwealth, was made on Christmas Day in 2006. Four years ago. What did Danny do? What did Shawn do? What did Steven do? I don't know and I don't care and I don't mind- that was then and this is now.
    We never seem to miss an opportunity to miss opportunity. I may be the worst of a bad lot in that regard. When in doubt, I go back to my sickbed.
    In my view , we all need to be expecting more of ourselves and of each other , in the area of asking another non-mutually-exclusive question.
    What is David doing, right now, and what is our duty to it? There must be at least some little thing that I personally can do today to support David's three pillars for nation building. There must be some little thought I can not only like to see realized, but actually act upon. Should I expect better of myself than not even an inkling?
    I am not advocating that we set the wayback machine to Lord Nelson's days, but we have a dire need to take two Aspirins and each take more personal responsibility to get our hands dirtier. Thank you for being the catalyst to have me say so.
    We need to improve our expectations of ourselves. Our problems are closer to our hearts than to our heads.
    See: Phil Esposito's concussions
    In his inaugural speech, Johnston outlined his plans to make families, education and volunteerism the focus during his time at Rideau Hall.
    Gov. Gen. David Johnston sits down for a one-on-one interview with Canada AM on Thursday, Oct. 14, 2010...
    "The broad theme is a smart and caring nation -- two adjectives each powerful and important. And under that we have three pillars, the first is family and children, the second is learning and innovation and the third is philanthropy and volunteerism," said Johnston, a father of five daughters.
    The "smart" part of the equation is especially important, Johnston said.
    "I believe if you get your education policy right in a country you'll get all of the other things right and if you don't get that right you tend not to get the other things right," he explained.

  8. I guess I'm not much of a monarchist, and don't feel a "duty" to follow the advice (which is all it is) of the Queen or her representatives in Canada.

    As a citizen of a democratic nation and province, I do care about what our elected leaders have planned—or not.

    While it's true that we could personally do a lot more to help ourselves, I believe it we need to hold our politicians to their task of looking after our governmental affairs and our public interests, including not running us into debt. And that is something we can't accomplish as individual private citizens.

    As for family values, education and giving, only education comes under the purview of the government, and we must hold them responsible for the quality of that educational system and the service it provides to us and our children.

    Of course there's nothing wrong with all of us rolling up our sleeves to build a better community. But I think our leaders should be the first to set a good example. That's why they call them "leaders."


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