Families in Newfoundland and Labrador are already struggling to make ends meet. Layoffs, wage freezes, cuts to public services and attacks on unions are only making things worse. During a time of economic downturn, lower and middle income families need public services more than ever.
Both Alberta and Newfoundland and Labrador became dependent on resource royalties. Then the price of oil plunged and resource royalties plummeted in both provinces. In 2015, both provinces elected new governments. Both tabled their 2016 budgets on the same day: April 14.
What a difference a year can make.
The Alberta NDP’s 2016 budget contained progressive tax measures, including a corporate income tax increase of two per cent. They increased the income tax rate for top earners from 10 per cent to 15 per cent. Additional revenues raised from the exploitation of natural resources now go into the province’s Heritage Fund.
In health care, Alberta is ending costly experiments in privatization, redirecting the funds to public services. Investments in hospitals and health care facilities amount to $3.5 billion over five years. In education, they are phasing in all-day kindergarten, investing in child care, and putting a freeze on tuition for post-secondary education. They added $37 million to public libraries.
Meanwhile, the Newfoundland and Labrador 2016 budget was all about the cuts. The Liberal government cut $260 million to public services, $100 million to much needed capital and repair projects, there was an 18 per cent cut to student financial assistance, $7.9 million cut to home support, $50 million to health care, and hundreds of jobs lost. We’re still facing the closure of 54 community libraries including 61 jobs, mostly held by women.
It seems the only thing they’re not cutting is gas tax, which they increased by 16.5 cents per litre!
The results, you ask?
Alberta is expected to have the strongest growing economy is Canada over the next two years, while Newfoundland’s is expected to be the weakest. Alberta’s real gross domestic product is forecast to grow by 2.8 per cent in 2017, the fastest among the provinces, according to the Conference Board of Canada. The Newfoundland and Labrador economy will “continue to struggle.”
Newfoundland and Labrador’s unemployment rate is expected to increase from 13 per cent to 17 per cent by 2020, while Alberta’s is expected to decline from eight per cent to six per cent.
Public sector job cuts will lead to less public services. Risky privatization schemes for our public services means paying more to get less.
The success of the Alberta NDP’s budget shows there is a better way. There are steps the Newfoundland and Labrador government can set in the budget that put people first, protect the public services we need, create good jobs and a stronger economy.
The Ball government should recognize the public sector as a driver of economic growth. Top quality health care and education are important industries, not a drain on society. They should also conduct a natural resources royalty review and set a 60/40 target for a split oil revenue between the province and private investors.
Some specific measures that can help workers and families should include creating new income tax rates, so top earners and corporations pay their fair share; scheduling minimum wage increases to be indexed to economic growth and/or inflation; and strengthening collective bargaining legislation.
We hope the Ball government’s next budget looks nothing like the last one — for all our sakes.
Wayne Lucas, president
CUPE Newfoundland Labrador