Slash, cut, save

N.L. Em­ploy­ers Coun­cil re­leases plan aimed at solv­ing prov­ince’s fis­cal chal­lenges

The Western Star - - Front Page - BY KENN OLIVER

Ev­ery man, woman and child in New­found­land and Labrador likely have their own ideas — or have adopted the opin­ions of pun­dits — about how to solve the prov­ince’s fis­cal chal­lenges.

The New­found­land and Labrador Em­ploy­ers’ Coun­cil (NLEC), in re­sponse to a sur­vey that in­di­cates more peo­ple are at least con­sid­er­ing leav­ing the prov­ince and with the aid of re­search con­ducted by the Con­fer­ence Board of Canada, has de­vel­oped a plan of its own that calls for nearly $600 mil­lion in tax cuts and a $1.1-bil­lion re­duc­tion in spend­ing over the long term.

“If govern­ment’s cur­rent plan is such that their tax­a­tion lev­els are so high that tax­pay­ers and busi­nesses are think­ing about mov­ing out of the prov­ince, what other choice do you have than to ad­dress that prob­lem?” asks NLEC ex­ec­u­tive di­rec­tor Richard Alexan­der.

“The spend­ing re­duc­tions that would have to oc­cur in or­der for us to be able to af­ford that and pay for those re­duc­tions and keep peo­ple here in the prov­ince are still well above what other prov­inces in Canada are pay­ing.”

An­other Way For­ward, a tongue-in-cheek nod to the Lib­eral ad­min­is­tra­tion’s own vi­sion for the prov­ince’s pros­per­ity and growth, calls for the govern­ment to elim­i­nate both the deficit re­duc­tion levy and the gas tax in the 2018 bud­get — a rev­enue re­duc­tion of $249 mil­lion.

“No mat­ter what you call the tax — per­sonal tax, deficit re­duc­tion levy, gas tax, what­ever — it all comes from the same wal­let. When you add up all these per­sonal taxes, New­found­land and Labrador has the sec­ond-high­est per­sonal tax bur­den of any prov­ince in Canada, only be­hind Que­bec.”

It also urges the govern­ment to re­duce per­sonal in­come tax, while re­mov­ing cor­po­rate cap­i­tal tax and pay­roll tax over a three-year pe­riod, re­sult­ing in a $322-mil­lion rev­enue cut.

To bal­ance things out and find $1.1 bil­lion in sav­ings, Alexan­der and NLEC in­sist the pro­vin­cial govern­ment needs to ad­dress its spend­ing prob­lem. Based on the Con­fer­ence Board of Canada’s re­search, this prov­ince spends 27.1 per cent more than the av­er­age of the oth­ers in At­lantic Canada, a dif­fer­ence of $2,942 per per­son.

“Un­for­tu­nately, govern­ment’s pub­lic plan does noth­ing to ap­pre­cia­bly lower spend­ing over the next four years,” he says. “Their plan is a tax plan.”

It starts with the pub­lic sec­tor, where the NLEC sees a need to freeze or roll back wages in core govern­ment and health care, sav­ing $75.7 mil­lion and $83.5 mil­lion, re­spec­tively.

It also calls for freez­ing or re­duc­ing sev­er­ance; re­duc­ing sick leave by 25 per cent; and re­duc­ing the num­ber of union­ized em­ploy­ees through at­tri­tion, not lay­offs.

A big part of the plan seeks long-term re­form to both the health care and education sys­tems, nei­ther of which the NLEC be­lieves the prov­ince can con­tinue to af­ford in their cur­rent forms.

“Do we wait for five years for the de­mo­graph­ics to get even worse and the whole sys­tem falls apart?” asks Alexan­der. “We can’t af­ford to do that and right now we’re not see­ing a lot of move­ment or a plan to re­form health and education in this prov­ince. It’s more just sta­tus quo.”

The NLEC be­lieves there is $356 mil­lion in health care sav­ings and $103.6 mil­lion in education sav­ings, along with a fur­ther $129.9 mil­lion in post­sec­ondary spend­ing cut­backs.

“This plan does demon­strate that govern­ment could re­move more than a bil­lion dol­lars in spend­ing and we would still have the largest spend­ing per capita, the high­est-paid pub­lic ser­vice and the high­est spend­ing on health and education of any prov­ince in At­lantic Canada.”

With­out in­tro­duc­ing these mea­sures, the NLEC is of the opin­ion that within the next three years — un­less the price of oil climbs to the $75 a bar­rel that govern­ment is pre­dict­ing — the prov­ince could be left go­ing to Ottawa look­ing for a hand­out.

“If we lose con­trol of our fi­nances the fed­eral govern­ment will then dic­tate terms as to how we get our fis­cal house in or­der, and we don’t want to do that as a prov­ince.

“Think of how that will look for us as a peo­ple: we go from have not sta­tus to have sta­tus and then a few years later we’ve got to go to the fed­eral govern­ment to try and re­solve the fis­cal sit­u­a­tion.”

Alexan­der says Fi­nance Min­is­ter Tom Os­borne has been briefed on the re­port, as has the Premier’s Of­fice.

How­ever, at an­other event on Thurs­day, Premier Dwight Ball said he didn’t have time to dig through the re­port in any great de­tail, but he wasn’t con­vinced it was a good way to go.

“What I saw so far, as I looked at this re­port from the Em­ploy­ers’ Coun­cil, this is re­ally a pa­per ex­er­cise. It’s not a peo­ple ex­er­cise,” Ball said.

“If we were to im­ple­ment the Em­ploy­ers’ Coun­cil re­port to­day, it would mean thou­sands of cuts in health care ser­vices, cuts in education and so on. We’ve laid out our seven-year plan, and so we’ll be stick­ing with that.”

For more on the NLEC’s campaign, visit an­oth­er­way­for­


New­found­land and Labrador Em­ploy­ers’ Coun­cil ex­ec­u­tive di­rec­tor Richard Alexan­der speaks to the au­di­ence at the launch of the An­other Way For­ward campaign, which aims to of­fer al­ter­na­tives to the govern­ment’s fis­cal man­age­ment plan. It calls for $600 mil­lion in tax cuts and more than $1 bil­lion in spend­ing re­duc­tions.

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