Exodus? Newfoundland and Labrador's bleak finances fuel angst for the future

ST. JOHN’S, N.L. – Newfoundland and Labrador had the world by the tail five years ago when former premier Danny Williams welcomed students attending a leadership conference to “Canada’s coolest province.”

The treasury was flush with offshore oil money. New schools were under construction, roads were being paved, and chic restaurants catering to high-flying executives with fat expense accounts were doing brisk business in St. John’s.

It was a taste of prosperity especially savoured in a province that had seen more than its share of hard times. It didn’t last.

“Get out if you can” was the bleak headline Monday over a St. John’s Telegram column by Russell Wangersky. It laments the provincial budget delivered Thursday that projects a $1.8 billion deficit despite an array of new taxes, fees and the especially detested “deficit-reduction levy” of up to $900 a year.

“Go,” Wangersky urged young workers not tied down by mortgages. “To my kids, to all kids: go.

“We voted in governments that promised, and delivered, on a quality of life we could not afford and that now must be curtailed.

“You shouldn’t have to pay for our mistakes. Come and visit, for sure. But we made the mess. We should have to clean it up.”

It’s the new Liberal government’s first spending plan since winning power last fall after 12 years of Progressive Conservative rule. It blames the former regime for overspending and mismanagement of unprecedented oil and mining profits over much of the Tory mandate, a spree that ended with the crash of commodity prices over the last two years.

Still, the budget’s gouging of at least $3,000 per typical family has made it a lightning rod for raw fury and a good dose of existential angst over the province’s future.

People are especially upset that there seems to be no light at the end of a dark tunnel — just an unemployment rate projected to hit 20 per cent by 2020 from about 13 per cent this year.

Wangersky’s words didn’t go over well with all parents, however.

Paddy Daly, host of call-in radio show Open Line on VOCM, describes public reaction to the budget as: “Savage. Absolutely savage.”

People are incensed that the Liberals, who campaigned on protecting public-sector jobs and reversing a “job killer” Harmonized Sales Tax hike, have about-faced with no clear recovery plan, he said in an interview.

But Daly isn’t yet willing to accept, let alone promote, a future that sees his two teenage boys leave for good.

“To be outwardly proposing people leave is to the detriment of all,” he said. “Doom and gloom is apparent. But when we foster it, then I think it becomes a dangerous road.”

Jerry Earle has five children and is also president of the Newfoundland and Labrador Association of Public and Private Employees, representing 25,000 members. He said many of them are furious and fearful that sweeping job cuts will come with a fiscal update this fall.

“I’ve had two children that have had to leave,” Earle said in an interview. A third just finished college and is applying for jobs outside the province.

“We will fight this tooth and nail,” he said of the union’s response to the budget, which has already included a series of ads highlighting broken Liberal promises.

Matthew Stewart, an economist with the Conference Board of Canada, said the provincial government had few options.

“The deficit was completely unsustainable and they were trying to avoid major downgrades to their credit rating,” he said in an interview.

That said, less spending by cash-strapped consumers will likely hammer an already battered economy and spur outmigration, he added.

“We saw a little under 2,000 people leave Newfoundland in the last year of data and I imagine this type of tax increase will continue to have a negative impact on the number of people that are leaving.”

Danny Williams, whose faith in the province’s future drove him to invest in the development of an industrial park and subdivision with potential for 5,000 homes on the outskirts of St. John’s, declined through a spokesperson to be interviewed.

“There have been three premiers and six years since Danny was in office — so he has no comment,” said an emailed response.

Follow @suebailey on Twitter.