A Stronger Economy is Possible.
The Province’s Auditor General recently delivered her report on the province’s financial statements for the year ending March 31st, 2019. Quick off the mark, one can hear the beating of the “austerity” drum as we are reminded that we are spending beyond our means, and that means, as the December 19th Telegram editorial states, “Really tough decisions have to be made.”
It’s easy in tough times to feed the argument of excessive government spending and make austerity the optimal solution. There is no doubt that our province faces significant economic and social challenges. We keep hearing the narrative of Newfoundland & Labrador’s (NL’s) “spending” problem. Is that really accurate?
Are we ignoring the fact that NL has the lowest public expenditure per GDP in all of Atlantic Canada?
Does anyone take notice of the other fact that NL has seen its oil revenues decline significantly over the past 7 years, the same period of time that coincides with the 7 consecutive deficits that we have incurred?
Oil has gone from being over 30% of total government revenues to 13.8% of total revenues for the fiscal year 2018/19, mainly due to the volatility of oil markets. That’s a revenue problem. We also produce a lot more oil currently than we did ten years ago.
Our over-dependence and reliance on this sector for revenue has really hurt our economy. Relying on oil to solve our fiscal issues has not worked in the past, so expecting a different result now is not likely.
What about other options?
On October 1st, Newfoundland and Labrador became the province with the second lowest minimum wage in the country. In a province that has over 13,000 minimum wage workers (the majority of which are women), we need to commit to doing better for minimum wage workers and work towards a $15 minimum wage now.
A minimum wage worker in our province working a 40-hour week earns $23,712 annually, which guarantees them remaining as part of the working poor. Our government’s answer to addressing a low minimum wage is to increase the wage based on the previous annual rate of inflation for Canada. Based on last year’s rate of inflation, that would increase the wage to around $11.65, an increase of $10 a week. A recent report by the Canadian Centre for Policy Alternatives (CCPA) found that a minimum wage worker in St. John’s would need to work 55 hours a week, every week, just to afford the rent for a one-bedroom apartment.
The NLFL recognizes International Day of Older Persons and celebrates the hard work and dedication of those who came before us — and are still working with us today!