NL Budget 2022: “This Province Will be Stranded”

The federal greenlight for Bay du Nord and the province’s 2022 budget come amid growing concerns around declining transparency and accountability under Premier Andrew Furey and the Liberals.

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The dovetailing of April’s Bay du Nord announcement and 2022 provincial budget suggest the Liberals are advancing a policy agenda that favours industry and corporate interests over its residents and Newfoundland and Labrador’s long-term well-being, some observers say.

On April 6 the federal government approved Canada’s first deep water oil well, just 48 hours after United Nations Secretary General Antonio Gueterres called investments in new fossil fuel projects “moral and economic madness” following a new report from the Intergovernmental Panel on Climate Change that says limiting warming to 1.5 degrees Celsius requires “immediate and deep emissions reductions across all sectors.” Bay du Nord is expected to produce at least 300 million barrels of oil, although some industry insiders estimate the reserves are closer to 1 billion.

Premier Andrew Furey called the federal government’s decision a “giant step forward in our economic recovery,” saying it will help in the province’s “progress towards a greener future.”

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Gueterres took aim at those promoting the industries most responsible for levels of carbon dioxide unprecedented since humans have inhabited the Earth. “Some government and business leaders are saying one thing, but doing another,” he said. “Simply put, they are lying. And the results will be catastrophic. This is a climate emergency.”

In her budget speech the following day, provincial Finance Minister Siobhan Coady said the Liberals’ expansion of the province’s offshore oil is part of its plan to “transition the province to a low-carbon economy,” adding the government is “fighting hard to position our oil and gas industry as being integral in the transition to renewable energy.”

It’s a contradiction that has many in Newfoundland and Labrador and across Canada frustrated—including one member of the province’s Net-Zero Advisory Committee.

Echoing Gueterres, Angela Carter, a political science professor at the University of Waterloo and author of the book Fossilized: Environmental Policy in Canada’s Petro-Provinces, says pursuing Bay du Nord comes at an enormous risk for the province.

“If the global community responds effectively to the climate crisis—and the future of our kids depends on that happening—then vast reserves of oil and gas will be stranded,”  she said. “This province will be stranded.”

Just a Transition, not a Just Transition

Carter helped coordinate last year’s People’s Recovery NL coalition to present an alternative pathway for the province’s economy.

The coalition—which included groups organizing around worker’s rights, anti-racism, climate justice, Indigenous rights, among others—formed in response to Furey’s hand-picked Premier’s Economic Recovery Team (PERT), led by Moya Greene. It laid out a collective vision for a just transition.

“Developing a just transition plan and putting in place the institutions to make it happen are vitally important right now,” Carter told The Independent last week—adding budget 2022 “missed the opportunity to begin that work.”

Released last May, the PERT’s “Big Reset” report called for cuts to post-secondary education, the merging of health care authorities, the privatization of public assets, deregulation in various sectors to attract investment, and expansion of the province’s fossil fuel resources as a pathway to a lower-carbon economy.

For its part, the People’s Recovery report cautioned against privatizing public assets and subsidizing extractive industries to expand fossil fuel development. It argued government should increase revenues through policies that would reduce inequality, like creating a wealth tax and raising corporate tax rates to invest in stronger social supports. Any policy development, it said, should be collaborative, transparent, and address the multiple and intersecting crises of racism, colonialism, income and wealth inequality, gender inequities, unemployment, and the environment and climate change.

In an early sign that the PERT was on track to favour corporate interests over the immediate well-being of residents, Newfoundland and Labrador Federation of Labour President Mary Shortall resigned from the team in January 2021. At the time, she cited a “lack of transparency, top-down approach, rushed timeline, lack of real collaboration and an overall feeling that not all perspectives were being considered, or appreciated.”

While Budget 2022 announced the coming amalgamation of health authorities and reiterated the Liberals’ plan to introduce balanced budget legislation, it holds back from many of the neoliberal policies championed in the PERT report—like privatization, deregulation and further austerity. 

But critics say the budget’s most notable feature is what it doesn’t contain. Shortall says the budget’s “biggest disappointment” is its failure to outline plans for a just transition. “If there’s no justice to the transition, then it’s just an industry-led transition and not a transition that looks after the people who are impacted.”

Jessica McCormick, a labour organizer and member of the People’s Recovery coalition, says if the Liberals are committed to a transition rooted in justice, rather than in the systems and institutions that produce inequality, “it would be really helpful for our government to define what just transition looks like to them, because if we’re only thinking about it in the context of which big corporations we give our money to, then that isn’t justice for workers, that’s not justice for working people.

“A just transition has to be much more complex than moving from oil and gas to mining,” McCormick says. “That really doesn’t give us a plan for how the working class in the province will actually be able to survive and thrive here.”

Patricia Johnson-Castle, co-chair of the Social Justice Co-operative NL, says the budget shows that the government either doesn’t understand the intersections and underlying causes of social problems, or it doesn’t care.

The Inuk activist and former provincial NDP candidate from Nunatsiavut says one look at the budget’s section devoted to Indigenous issues is case in point, calling it “truly pitiful.”

“There’s always things that the province could do but they choose not to do,” she says—adding the government often deflects responsibility for Indigenous-related policy matters to the federal government.

While Budget 2022 didn’t produce the same levels of austerity and public outrage as the Liberals’ 2016 budget, “what will be detrimental is what’s not in there, what’s to come,” McCormick says—citing the Liberals’ promise of balanced budget legislation, which she calls a “poisoned pill.”

“When we’re tied to having to pay down that debt, what’s sacrificed is jobs, wages, public services.”

Opposition and labour leaders have also criticized the government’s secrecy around the review of public assets it commissioned from financial advisory giant Rothschild and Co. Delivered earlier this month, the report holds key information that will influence any future decisions around privatization. But Coady said she can’t share it with the people of the province—who paid $5 million for it—due to the “commercial sensitivities” it contains. 

A pattern of anti-democratic behaviour 

Government’s limited public input into the PERT and its decision to keep the Rothschild report to itself are part of a growing pattern of secrecy and anti-democratic decisions at a time when the Liberals are considering major policy changes that could have detrimental long-term impacts on the province.

The province’s Information and Privacy Commissioner, Michael Harvey, recently lambasted the Liberals over their request for a court ruling on whether the commissioner can review access to information appeals where government has cited solicitor-client privilege to withhold records.

“At a time when the province is facing increasing financial and economic difficulties, it is ever more important that transparency be at the forefront,” Harvey’s office wrote in an April 5 statement.

“[I]t would appear this government is in the process of doing through the courts what would be politically unpalatable to do through the legislature, i.e., to shield itself from accountability.”

Data provided to The Independent by the Department of Finance also shows a decline in public engagement numbers for the province’s pre-budget consultation process since 2017, when the Liberals tabled their second budget since coming to power in fall 2015.

In 2017 the government received 460 online submissions and saw 99 people turn out for the in-person consultations. The following year, in 2018, 112 people attended in-person while 285 online submissions were received and 80 submissions were made by email. In 2019, those numbers dropped to 54, 299, and 31 respectively. In 2020, no public consultations were held due to the pandemic, and just 107 online submissions were received, along with 46 email submissions. The department says it received 103 emails for 2021 and “hundreds” of submissions in total.

Asked what the government was doing to try and improve public participation in the budget process, Coady said in a June 2021 statement that “consultation and engagement with the people of the province is vitally important and we will certainly examine methods to increase such engagement in the future.”

The Independent requested information from the department on what new measures, if any, it took to bolster public engagement as part of the 2022 pre-budget process but did not receive a response.

Scott Matthews, an associate professor in Memorial University’s Department of Political Science, says while initiatives like the Newfoundland and Labrador government’s Engage NL website—a platform for public input on budgets and other policy issues—may appear democratically progressive, they don’t necessarily lead to more democratic decision-making.

“It’s not really meaningful consultation when everyone in the province is invited to make a submission through the government’s website,” he says, noting that’s “asking a lot of individual citizens [and] of the non-profit sector, of advocacy groups.”

Matthews says business interests are “well-represented everywhere,” like in lobby groups, and therefore “have economic advantages and clear interests to protect.”

This is “troubling,” he adds, “because the other voices are so much less well resourced and are in a really inferior position to advance their claims.” Meanwhile, “other segments of society need support for them to be properly represented,” he says.

“It’s certainly not enough to have a website where everyone is invited to add their opinion when you have, on the other side of these issues, well-endowed, well-resourced organizations that can, on an ongoing basis, pay for political communication, have consultants, have people dedicated to advancing their interests in the public domain and directly with government.”

Kicking the can down the road

The province has parroted industry’s talking points on Bay du Nord providing significant employment and revenues for the province. But Carter says the absence of concrete plans for a just transition is a sign that history will repeat itself.

“We have been developing oil since 1997 and after all of that—and four projects—we are still facing massive debt, high unemployment, high poverty, massive food insecurity, intolerable inequality in our society,” she says. 

“How is Bay du Nord going to solve this problem? How is it going to be handled somehow differently, so that we’ll finally get some of this oil prosperity that’s been promised to us?”

Shortall says public support for Bay du Nord is rooted in a fear of unemployment and poverty—a fear she says could be curtailed by a progressive policy agenda that confronts the reality of the oil industry’s decline and immediately develops a just transition plan to ensure workers can move into other industries.

“As long as workers feel threatened by changing jobs without a plan, then there’s always going to be resistance [to change], and we’re always going to have trouble doing it,” she says. “So government would be better served to be able to embrace that and bring the players to the table and start the process.”

Johnson-Castle says policy-makers need to be “courageous and brave” now more than ever. If they can’t or won’t, she says, Newfoundanders and Labradorians will have to drive the change themselves.

“We’ve had generations of merchants setting the prices on our fish, of wealthy people telling the others what is and isn’t possible for them. And I think that we need to keep the feet of our politicians to the flame and make sure they are working for us, and that they’re working to build a better, more just Newfoundland and Labrador,” she says.

“We have more power than they want us to believe we have.”

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