The Rock, in a Hard Place

Change in Newfoundland will come from the bottom up.

It has been (half) jokingly said that the perennial misfortune of Newfoundlanders is to be governed by Newfoundland politicians. Sadly, anyone looking at the political climate of the province over the last half decade would be hard pressed to disagree with such sentiment. With a collapse in oil prices accentuated by poor fiscal policy, the people of the province affectionately known as the Rock are having to contend with one of the worst economic climates since Ottawa imposed a cod moratorium in 1992.

A have-not province for most of its 68 years within the Canadian federation, Newfoundland is now seeing what appears to be the end of the most lucrative years in both its pre- and post–Confederation history. Thanks in part to a hard-fought struggle with Ottawa for offshore resource rights in the 1980s, Newfoundlanders waited in long anticipation for the oil royalties to flow into government coffers and see, what former premier Brian Peckford so eloquently termed, that “have not will be no more.”

In 1998 Newfoundlanders’ wish came true. The first oil field, Hibernia, became commercially viable and production commenced. By 2008, two more oil fields—Terra Nova and White Rose—had entered into production. During that decade, global oil prices skyrocketed, from roughly $26 a barrel in 2000 to $147 in 2008. The gush of oil royalties literally changed the province’s economic fortunes overnight. In 2004, the then newly elected Progressive Conservative government of premier Danny Williams was rocked by the largest labour strike in Newfoundland’s history as he attempted to implement an austere budget and come to grips with a nearly $1 billion deficit.

Four years later, in 2008, the influx of oil dollars had not only erased the deficit but seduced the Williams administration into nearly doubling government spending, from roughly $4 billion to $8 billion. Cash was awash: $1,000 baby bonuses, 20 percent pay increases for public servants, tax cuts and, perhaps most crucially, the building of a multi-billion–dollar hydroelectric dam in Labrador. Still under construction today, the Muskrat Falls project is expected to cost $9 billion by the time it is completed in 2018.

With oil royalties soon accounting for a third of all government revenue, flags were raised as early as 2008 that the province’s fiscal trajectory was unsustainable. The global financial crisis that year highlighted the pitfalls of the commodities’ market when oil suddenly dropped from $147 to $44 a barrel. Likewise, Newfoundland’s three major oil fields had well established production horizons of just 10 to 25 years. Such factors should have induced caution on spending and taxation policy, but prudence was ignored and not one cent of the nearly $15 billion in oil royalties was saved. Public spending and vote getting proved too enticing a potion to discard and little of substance was done.

Consequently, when leadership was needed, none was forthcoming. None of the province’s three major political parties—the Progressive Conservatives, Liberals and NDP—was willing to vocally counteract the dangerous path the province was on, even after the resignation of the popular nationalist premier Danny Williams in 2010 gave an opening for new ideas and bold proposals. Instead of telling voters what they needed to hear, Newfoundland’s political class preferred to tell Newfoundlanders what they wanted to hear and continue moving toward the precipice of economic disaster.

With the advent of the new Liberal government’s 2016 budget, Newfoundlanders are having to contend with some $860 million in tax hikes (including Canada’s first tax on books and a new income tax), a $1.8 billion deficit, school closures, teacher layoffs and the removal of funding for 54 of the province’s 95 public libraries. Many are asking how it came to this.

While James McLeod did not set out to write an academic treatise on the province’s ills, his book Turmoil as Usual: Politics in Newfoundland and Labrador and the Road to the 2015 Election captures the machinations and small-mindedness of Newfoundland’s political parties in the run-up to the November 2015 provincial election. McLeod, a veteran political reporter and Ontario transplant with Newfoundland and Labrador’s largest daily, The Telegram, takes the reader on a chronological journey through three years of political intrigue, covering everything from political party leadership contests and conventions to intra-party strife, electioneering and scandal.

McLeod’s book is peppered with sometimes funny anecdotes on the absurdities common to politics throughout the country. For instance, there are his repeated run-ins with Marjorie, a hyper-partisan who routinely threatens McLeod with bodily harm unless he stops his critical coverage of her chosen tribe. Then there are party conventions, where serious policy is never debated and politicians and card-carrying party members become “experts at voting ‘yes’ on whatever [is] put in front of them.”

More damning, though, are those incidents in which Newfoundland’s politicians conflate their self-interest with the public’s interests. Two examples (of many) stand out in this regard. The first involves Frank Coleman, a business magnate and friend of former premier Danny Williams who, at the last minute in 2014, made a move to become leader of the governing PCs and therefore premier. Thanks to Williams’s influence in the party, none of the PC caucus dared contest the leadership, thus giving a total political novice the go-ahead to become premier without ever having to contest “any democratic process.”

Even more egregious was the interference of two PC cabinet ministers in helping Coleman’s construction company avoid paying millions in bonds on a highway project the day before Coleman entered the leadership race. These acts, in addition to Coleman’s refusal to talk about any vision or policy ideas, eventually led to him quitting as leader of the PCs and throwing the party into its second leadership contest in one year. The governing party was in total turmoil and sound public policy went further to the wayside. What amazes McLeod and, indeed, the reader, is how someone like Coleman could even get so close to holding the most powerful position in the province. In the end, McLeod rightly reminds us not to “feel bad” for Coleman as “Newfoundland and Labrador should expect better than a guy who wasn’t even clever enough to think that politics would be hard. He was a loser right from the beginning, and he got what he deserved.”

The second incident involves Bill 29, a legislative attempt in 2012 by the government to “keep basically anything they want secret.” If implemented, Bill 29 would have allowed any file used to develop a cabinet paper, including emails, to be deemed secret. The Centre for Law and Democracy remarked that the bill would have made Newfoundland’s access-to-information laws weaker than those of Mexico, Ethiopia, Uganda and Bulgaria. A public outcry eventually forced an inquiry and a reversal of the bill. But the issue of transparency hardly went away. With the opposition Liberals ascending, McLeod caught their leader, wealthy businessman Dwight Ball, refusing to divulge who some of his campaign donors were even while Ball was simultaneously blasting the government for its secrecy. The only conclusion one can make about the whole affair is that “the principles of transparency and accountability are only really useful when you’re demanding that they should be applied to somebody else.”

Upon reading Turmoil as Usual, one might be left with the feeling that leadership is permanently void in the province. After all, if there is a fault with the book it is that it leaves the reader looking for answers on how to fix the status quo.

Hence, it is no surprise that today Newfound-landers are circulating memes of Winston Churchill quotes or signing a petition calling for the reinstatement of the Commission of Government, the unelected technocratic administration imposed by Great Britain on the country between 1934 and 1949 following another economic collapse.

But although there is hope that things can change, reform will not be elite-driven. When Bill 29 was announced, it was public protest—not the initiative of the political parties—that saw the retrograde proposal thrown out and replaced with the most open access-to-information rules in the country. As the province confronts its most challenging situation in a generation, it will again fall on Newfoundlanders as a whole to demand higher standards, with an expectation that their leaders will listen and govern wisely.