Budgets by Scrooge

Newfoundland is setting a stern trend

JOHN DeMONT April 1 1991

Budgets by Scrooge

Newfoundland is setting a stern trend

JOHN DeMONT April 1 1991

Budgets by Scrooge


Newfoundland is setting a stern trend

In the rugged fishing village of Port aux Basques, on Newfoundland’s windswept southwestern coast, the news from St. John’s struck like an unwelcome late-winter gale. On March 7, Newfoundland’s cashstrapped Liberal government tabled a budget that authorized sweeping cuts to provincial services in order to stave off a ballooning deficit. Since then, the 1,600 residents of Port aux Basques have been adding up the cost to their community—with mounting bitterness and anger. The most painful loss: $1 million slashed from the budget of the Dr. Charles L. Legrow Health Centre, the only hospital serving the 13,000 people who live within 80 km of Port aux Basques. The cut will force the hospital to lay off up to 40 of its 120 staff and cancel some programs—including medical services that rely on general anesthesia. As a result, some patients will likely face a 250-km journey north to Comer Brook for major surgery and other services. That prospect prompted Donald McNeil, 31, a Port aux Basques fish-plant worker, to predict: “Lives are going to be lost because of this decision.”

The anger evident in Port aux Basques is simmering elsewhere in the country’s poorest province as well. In the past two weeks, angry demonstrations have erupted in several centres as citizens expressed their outrage at a succession of economic blows that they blame on both the federal and provincial governments. In Port aux Basques itself, nearly twothirds of the village’s residents closed their businesses, took their children out of school and marched through the streets to protest the provincial budget. Then, last week, 100 angry people staged a near-riot at a local fish plant to show their fury over the shortage of work.

Newfoundland is not alone among the provinces in attacking budget deficits with austerity measures. Last week, Quebec’s Liberal government announced a wage freeze for its 400,000 unionized employees, and massive layoffs may be in store when the finance ministers of New Brunswick, Manitoba and Saskatchewan present their budgets in the coming weeks. The provinces claim that they have no choice but to attack the spending with bold— and deep—strokes. They say that the reces-

sion has cut deeply into revenues from corporate and personal income taxes—while increasing social welfare costs. As well, they point to a drop in expected transfers of money from Ottawa as the federal government tackles its own deficit. Said Winston Baker, president of Newfoundland’s Treasury Board: “We are getting $180 million less in transfer payments than we had originally expected from the federal government.”

In fact, Newfoundland Finance Minister Hubert Kitchen slashed nearly $171 million in planned spending from his budget earlier this month in order to hold the projected operating deficit for the 1991-1992 fiscal year to $53.8 million, compared with $117.2 million for this year. But the accomplishment came at the cost of 2,500 fulland part-time government ^ jobs—about one-eighth of the g total number of provincial em1 ployees. That will only exacer$ bate the province’s unemployment rate, which, at 18.2 per I cent in February, is the worst in Canada.

Almost half of the jobs cancelled in the budget are in health care. But the budget also froze grants to school boards, cut funds for community colleges and technical schools and reduced provincial grants to some municipalities—among them Conception Bay South, 20 km west of St. John’s. As a result, said town clerk Maureen Harvey, Conception Bay South is one of many municipalities that are contemplating cuts in services. Said Harvey: “We are looking at cutting back in virtually all areas.” Already, she added, the community has been forced to close its local hockey arena for 2Vi months.

But the layoffs have been particularly painful along the province’s economically ravaged southwestern coast. Port aux Basques lost its biggest employer four years ago, when CN Rail closed its Newfoundland subsidiary, resulting in the loss of roughly 1,400 jobs in the vicinity. Since then, a drastic decline in fish stocks—the result of previous overfishing—has left most fishermen and fish-plant workers with only three weeks of work so far in 1991. As a result, few have worked enough in the past 12 months to qualify for unemployment insurance.

On March 12, local fishermen and plant workers demolished a federal fisheries office in the village to protest Ottawa’s decision to close the local fishing season earlier than usual. And last week’s demonstration began when 100 unemployed fish-plant workers blockaded a government wharf to prevent fish from being transported to processing plants elsewhere in the province. Declared Port aux Basques’s mayor, Donald Hann: “I do not condone violence,

but I can understand their frustration.”

Many residents are struggling to make ends meet. Janet Francis, 27, a fish-plant worker who has been laid off, told Maclean ’s that she and her two daughters would have starved during her months of unemployment if she had not shot a moose earlier in the winter. Said Francis: “You get sick of moose after eating it

for five days straight. But at least it is a meal.” Now, with little other work available, the victims of the latest layoffs are vocally bitter. “The government’s mismanagement of the economy has made these huge cutbacks necessary,” charged Eric Woolridge, 46, whose job as assistant administrator at the Port aux

Basques hospital will soon end. “He [Kitchen] is putting the budget before my family.” Added David Johnson, a Port aux Basques representative for the United Food and Commercial Workers International Union, which represents local fish-plant workers: “After that budget, a Liberal would have a hard time getting elected in this part of the province.”

Indeed, economic uncertainty has left some local residents with bleak hopes. Said Gary Hollett, 33, a Port aux Basques nursing assistant with two children, who is unsure of the future of his own job: “If I am laid off, where will I go, what will I do?” For many people, the only hope for prosperity seems to lie in leaving

the area to seek work elsewhere. Declared 52year-old fisherman Ronald Parsons of Rose Blanche, a village 50 km east of Port aux Basques: “Unless the fishery recovers, this place is going to become a ghost town.”

Although no other area of the country may be as badly off as southern Newfoundland, where unemployment is at 24.5 per cent, the plans of several other provincial governments to present cutback budgets over the next few weeks are bound to provoke similar responses. New Brunswick’s Liberal government, for one, has sent a team of MLAS on a tour of the province to listen to taxpayers’ suggestions on where that province can trim enough spending to reduce an operating deficit that is projected to reach $37.3 million by the end of the current fiscal year on March 31. In Manitoba, the Conservative government is widely expected to announce as many as 1,500 layoffs when it tables its budget in April. Saskatchewan’s Tory government has said that it may cut 600 jobs from the public service in that province. At the same time, although Alberta expects to bring down a balanced budget on April 4, the Conservative government’s speech from the throne two weeks ago indicated that more civil-service cutbacks lie ahead.

Among all the provincial administrations, only Ontario’s New Democratic Party government, now operating with a recession-fuelled $2.5-billion deficit in the current fiscal year, and British Columbia’s embattled Social Credit regime appear committed to avoid compounding the recession’s impact with major austerity measures in the months ahead. Elsewhere, at least some of the heavy weather battering the Port aux Basques economy may soon be felt in much of the rest of the country.





It will be the largest cabinet meeting ever held in the Maritimes. Sometime within the next three months, up to 50 Nova Scotia, New Brunswick and Prince Edward Island cabinet ministers will assemble for an unprecedented session in Moncton, N.B. Their task: to find ways of forging stronger economic links among the three provinces as the first step towards creating a regional common market. The idea is not new. In fact, uniting the Maritime provinces was the initial reason for the Charlottetown Conference of 1864, which led to Confederation with Upper and Lower Canada three years later. But the growing threat of Quebec separatism and a chronically impoverished Maritime economy are lending a new sense of urgency to the upcoming talks in Moncton. “This initiative will bring con-

crete results,” said New Brunswick Premier Frank McKenna. “The public is strongly behind it at this time in our history.”

The latest push for regional solidarity began last fall, when McKenna called for a regional common market similar to the European model. McKenna’s plan would initially apply to the three Maritime provinces, but may later expand to include Newfoundland. It calls on the provinces to reduce regional trade barriers and to work together on everything from government purchasing to road construction. And a majority of Atlantic residents appear to favor closer ties among their provinces. A poll released last December by St. John’s, Nfld.-based Omnifacts Research Ltd., for one, showed that 74 per cent of Maritime respondents, as well as 78 per cent of Newfoundlanders, supported regional economic union.

The drive for unity received an important boost last month when Donald Cameron became premier of Nova Scotia after winning the provincial Conservative party leadership. Unlike his predecessor, John Buchanan, Cameron

clearly favors economic union. Declared Cameron: “If we’re going to have barriers between provinces, we’ll be a have-not region for a long, long time.” P.E.I. Premier Joseph Ghiz is also a supporter of economic union. But Newfoundland’s Premier Clyde Wells remains unconvinced. He told Maclean’s that forming an Atlantic economic bloc could only harm national unity. Added Wells: “To do so would invite Ontario and the West to do the same and sow the seeds of destruction of Canada.” Still, McKenna, who will take up the issue with Cameron and Ghiz at a meeting in Woodstock, N.B., this week, said that some form of regional union is inevitable. Said McKenna: “I am hopeful that when Premier Wells sees that we have had success, he will be more receptive.” Many Atlantic Canadians plainly agree that, united, the region is better placed not to fall into tough times.

J. D.