Board of Trade Outlook 2021, Day 1: Trudeau Keynote

Prime Minister Justin Trudeau was long on the pre-election optimism—and short on details about Muskrat Falls negotiations with the province.

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With light finally appearing at the end of the Covid-19 tunnel, the mood at the St. John’s Board of Trade Outlook 2021: The Road to Recovery conference was positively buoyant. Between optimistic economic projections for a post-pandemic recovery and warm tidings for industrial interests from federal and provincial politicians, the message was clear: the best is yet to come. (After a little more pain, of course.)

“The Road to Recovery” was held via Zoom for about six hours from June 7 to 9. Monday featured remarks from Premier Andrew Furey and federal Natural Resources Minister Seamus O’Regan, as well as a keynote address and brief question and answer session with Prime Minister Justin Trudeau. Tuesday saw provincial Finance Minister Siobhan Coady discuss the province’s financial situation following the May 31 budget, as well as a presentation on national (and international) economic trends with Doug Porter, Chief Economist and Managing Director for BMO Financial Group. Finally, on Wednesday, a panel of representatives from the Fisheries Council of Canada, the Newfoundland and Labrador Oil and Gas Industry Association, Mining Industry NL, the Newfoundland and Labrador Environmental Industries Association, and TechNL shared perspectives on trends, challenges, and opportunities in their respective sectors.

The 2021 conference was an illuminating glimpse into the mood and mindset of the province’s industrial and business interests as Newfoundland and Labrador prepares for a post-pandemic reopening. The Independent was in attendance for all three days of this event. What follows is the first of three reports on the week’s discussions.

“The feeling of optimism is real”: Premier Furey

On Monday, June 7—while MPs in Ottawa were debating a NDP motion calling on the government to end “its belligerent and litigious approach to justice for Indigenous children”—Prime Minister Justin Trudeau delivered a keynote address to the St. John’s Board of Trade. The discussion was hosted by Board of Trade Chair Justin Ladha, CEO of Killick Capital. (The full proceedings can be viewed here.)

Before Trudeau joined the conference virtually, he was welcomed with a glowing introduction from Newfoundland and Labrador Premier Andrew Furey.

Furey opened by describing a “palpable sense of optimism” gripping the province, attributable to good weather, an accelerating pace of vaccinations, and the province’s recently announced reopening plan.

“The feeling of optimism is real,” Furey declared. “Our relationship with Canada has never been stronger. There is no louder voice in Ottawa [for the province] than [federal Natural Resources Minister] Seamus O’Regan. And the Prime Minister is listening because he is a Newfoundlander at heart.”

The premier then offered an important caveat: “We all know [the province’s] difficult [fiscal] situation. … There is a fight ahead, and it will be long and hard.” But he closed his remarks on an optimistic note, announcing that “like every new day, it starts in the east.”

Following a brief introduction by Minister O’Regan, Prime Minister Trudeau began his address. He spoke broadly about how the federal government had supported Canadians through the pandemic through programs like the Canada Emergency Response Benefit and the Canada Emergency Wage Subsidy. But he also noted several Newfoundland and Labrador-specific initiatives championed by the Liberal government.

Canada will support Newfoundland and Labrador: Prime Minister Trudeau

Trudeau emphasized the province’s energy sector in particular. “[We] will continue to support the [offshore oil and gas] industry as it evolves,” he told the conference. He also noted that Newfoundland and Labrador’s hydroelectricity potential is “huge,” and that the debt deferral announced in December 2020 demonstrates that his government is committed to “keep[ing] Muskrat Falls on stable financial footing.”

He also acknowledged the province’s difficult fiscal situation, referencing that he was watching both the release of the Greene Report and last week’s provincial budget with interest. Trudeau stated that Canada would be there to support Newfoundland and Labrador through its present financial difficulties “like when [NL] sent a medical team to Ontario during the third wave of Covid.”

Following his speech, there was a brief question and answer session between Ladha and Trudeau that probed the prime minister on a number of concerns from the provincial business community.

Asked whether he could give any reassurance to Newfoundland and Labrador’s business community in light of the province’s fiscal situation, Trudeau said a major reason for optimism was how it weathered the pandemic. He noted that Canadians are going to be really keen on tourism around Canada as the country reopens, and “among my friends, a lot of people are looking to travel to Newfoundland.” He also suggested the province was “better prepared mentally” to deal with the pandemic, and that global investors will be looking for places with a competitive edge “off the beaten path.” (Trudeau also joked that he would personally like to see the ACOA-funded pizza oven at the Bonavista Social Club.)

When asked about federal government support for the offshore oil and gas industry, Trudeau said that Newfoundland and Labrador has a competitive advantage against other Canadian oil products given lower upstream emissions in offshore extraction. But he also noted that global investors are moving away from oil and gas, and that diversifying the economy is important as the world heads to net-zero carbon emissions by 2050.

Trudeau then deferred the question to Seamus O’Regan, who noted the federal government had dedicated $320 million to the offshore oil industry last September. O’Regan also argued Newfoundland and Labrador was well positioned to pivot to hydrogen production, and that the province’s proximity to Europe, “a market hungry for green hydrogen,” would be a great advantage. He also noted the new US Energy Secretary, Jennifer Granholm, had a mother who grew up on Newtown Road in St. John’s, and that the president of ExxonMobil had personally told him that “there is no harsher environment [they operate in] than the Newfoundland offshore.”

“No big announcements today” on rate mitigation

Trudeau also addressed questions around Muskrat Falls and future development on the Grand (Churchill) River in Labrador. He noted that the US will need Canada’s “green” hydro energy, and that although the Muskrat Falls project faced significant challenges, “it is a step in the right direction.” He said there is a discussion about the project scheduled with Premier Furey “soon.” Talks are also ongoing with other Atlantic Premiers about the prospects of the Atlantic Loop development, which would see both the Upper and Lower Churchill projects—Muskrat Falls and an anticipated hydro development at Gull Island—linked together as part of a regional power grid.

Trudeau did not answer any direct questions about federal support for rate mitigation policies in Newfoundland and Labrador. Instead he said that there would be “no big announcements today” and reiterated that “the federal government will be there to support Newfoundland and Labrador through the challenges the [Muskrat Falls] project has led to” and promised no less than three times that Canada “will have your backs.”

Finally, pressed about the debt load Canada incurred over the course of the pandemic, Trudeau defended the federal government’s emergency response programs. The prime minister told the conference that “Canada realized early in the pandemic that protecting public health was the best way to help the economy,” and that this was accomplished through a combination of “smart shutdowns” and “generous social programs.”

Trudeau argued that economic recovery would have been slower had the federal government not rolled out its social programs, as the state can borrow money more cheaply than private consumers. Lower private debt would in turn mean the economy could recover faster, and so the federal government would not have to take significant action on taxes to address its increased deficits and debt load. He said that international credit rating agencies had maintained Canada’s AAA rating, and that “our choices to invest and lean in” to emergency social programming was “actually a way of preventing economic costs in the medium and long run.”

“I’m excited about the coming years,” Trudeau concluded. “Newfoundlanders and Labradorians have reasons for this too.”

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