Economic turmoil lies ahead for N.L. Here's some advice for planning our way out of it

·9 min read

Gerry Russell knows a thing or two about dark times in Newfoundland and Labrador.

He can still recall the turmoil of 1992, when the cod moratorium forced the Bonavista fish plant where he worked to close its doors. In a moment, Russell and his wife became two of the tens of thousands of people without a way of life, or a way to put food on the table.

"It was devastating," Russell told CBC Radio's St. John's Morning Show on Thursday.

He'd been at the plant for close to 20 years, with no other skill or trade to his name. "I didn't have much to look forward to, at the time," he said.

Despite the shock, anger and sorrow that reverberated throughout the province, Russell did something small, and extraordinary — he changed. At the age of 39, he took up an offer for retraining aid and completed an oil burner technician course in Corner Brook. Certificate in hand, he moved back to Bonavista, started his own company and has been fixing and servicing furnaces ever since.

"If you give up, well, you ain't got much to look forward to. You got to move on with your life, I guess. You're never too old to learn," he said.

2021 has a few echoes of 1992, and appears to hold another reckoning for the province. The winds of change have ramped up to near gale force, and there are still weeks ahead — and not coincidentally, a provincial election to wrap up — before the province's economic task force releases its vision of the road ahead.

What that may hold is the subject of much speculation but little substance, with its members and their work shrouded in secrecy until the interim report, due on Feb 28, is published.

That uncertainty and lack of information can be problematic, says Lynn Gambin, an economist and professor at Memorial University. A clouded sense of what's to come, she said, often makes people risk-averse, rein in their spending and even re-evaluate their place in the province, with emotions ruling in the absence of information.

Eddy Kennedy/CBC
Eddy Kennedy/CBC

One thing is certain: cuts

While limbo may be the reality for the next little while, there's no denying the circumstances that have brought Newfoundland and Labrador to this point. It's a many-layered fiscal mess, some of it self-inflicted — the Muskrat Falls hydroelectric project, large public sector spending — and other factors well beyond our control, like the one-two punch of the pandemic and a sputtering oil and gas sector.

Out of all of this, Gambin sees some certainty ahead.

"I think cuts are inevitable. This position we're in is unsustainable," she said.

"We've been getting by from year to year, but I think there's a need to take a long-term perspective, and really make sure any cuts that are being made aren't going to stifle our growth and our ability to recover."

People of this province have to accept that we can't push the ball down the road anymore. - Peter Woodward

What doesn't work, she said, are broad slashes across the board, such as picking a number like a two per cent spending cut to all government's departments. That style of arbitrary belt-tightening doesn't account for areas that may need continued money, or even a boost of it, to support people facing hardship ahead. Ditto for trying to winnow spending by not filling civil service jobs as people retire.

"What we lose, if we go down that kind of route, is we lose valuable skills and experience that might not have been the intended thing to cut," Gambin said.

But savings have to come from somewhere.

And while the majority of Newfoundlanders and Labradorians will not be the decision-makers in the tougher times ahead, Gambin said everyone needs to understand we can't have it all: a dollar spent fixing up a highway means a dollar less for something else.

"I think there's a responsibility for all of us to think about our own priorities, about what it is we want our province to look like," she said.

"In terms of what services we feel we can't live without, but also to realize that there are some things that might have to give —that will certainly have to give — and we all need to take stock of that ourselves, and realize that there is this trade-off."

Play the long game

Echoing Gambin's call for a long-term vision is a major player in the province's private sector: the CEO of the Woodward Group of Companies, which has its hands in everything from ferry contracts to car dealerships.

"We gotta stop looking at four-year election terms and look at a long-term plan, and people of this province have to accept that we can't push the ball down the road anymore. We can't leave the next generation to pay for what we've done," said Peter Woodward.

Jacob Barker/CBC
Jacob Barker/CBC

Woodward would like to see the task force sketch out objectives spanning the next two decades, and preparing for the possibilities of 2041, when the Churchill Falls hydroelectric dam reverts to provincial ownership.

"We're going to have massive availability of cheap hydro power, carbon-free, that the rest of the world wants. And they want goods that are being produced from them, and 20 years is going to go in a blink," he said.

If attracting global interest for low-carbon goods made in a remote Canadian province seems far-fetched to some, it's already a reality elsewhere. Woodward cited Northvolt, a massive EV battery factory, promising to be Europe's largest, being built in northern Sweden.

A battery factory may not be the province's exact way forward, but Woodward said there should be an increased focus on overall innovation, from adding value to seafood products or mined ore with additional processing, to emphasizing the IT sector that has been a sparkling bright spot in Newfoundland and Labrador's outlook of late.

But fostering business requires more workers, and Woodward hopes there's a better plan for attracting people to the province. His evaluation of immigration so far? "We're doing terrible," he said.

The province did usher in a Department of Immigration last year, but labour shortages are real and acute.

"Here in Labrador and in other parts of the province, we're already having trouble finding people to go to work. That's a fundamental when it comes to your economy; you have to have the workforce," he said.

Woodward sees role models to emulate: Halifax is booming, with Nova Scotia breaking its immigration targets for 2020. To copy them, Woodward said helping create communities for newcomers is key, and everybody in this province has their role to play in that.

"It's not always just 'the government has to do it' — our society has to open up our arms and accept immigrants," he said.

Moving away from crisis management

Woodward doesn't just see the worker shortage affecting the private sector. He cited reports of nurses working overtime and other resource issues in health care making him wonder about effective spending.

"We spend more on health care than we spend on anything, and yet people are very unhappy about it. And that tells me that perhaps we're always in a crisis management," he said.

Woodward isn't the only one who sees a cycle of Band-Aid solutions.

"I think one of the reasons why we could be in this position is because we do tend to focus on crisis response," said Lisa Browne, the CEO of Stella's Circle, a non-profit organization that knows about crisis, as it works with vulnerable people in St. John's.

Putting out fires is costly. Browne cited cases of people living at the Waterford Hospital because of a lack of other options, and the resulting $100,000 annual price tag, instead of housing someone in the community with supports for about $30,000 a year.

Browne requested a meeting with Moya Greene, the chair of the economic task force, to talk about that crisis response. She hopes her message to Greene — that any economic response has to involve social solutions and community groups like hers — is heeded.

"We are so able to be nimble and flexible and responsible to individual needs," she said.

"And that's some of the challenges that say, Crown agencies, or public health authorities have, is generally there is like a one-size-fits-all response. And for the people who are the most vulnerable in our society, that does not work," she said.

Browne sees hope amid the hardship of the pandemic. COVID-19 has strained some supports to breaking points — food banks, themselves a form of crisis management, have noted increased use — but also revealed the ability of our entire province to move swiftly toward change.

"Things that we thought could never happen, happened, in a matter of days. So it showed the importance of political will and what we can do when we absolutely must do it. And we absolutely must do some things right now," she said.

Ted Dillon/CBC
Ted Dillon/CBC

That includes involving social programs and groups like hers, she said, to address root issues of persistent issues, like food insecurity and poverty.

"I'm not saying we close food banks tomorrow, but they are a crisis response instead of a justice response," she said.

"A just response would be, how do we encourage people to get to work? How do we give them the skills to go to work? How do we help them cook?"

Browne's words echo the nugget of wisdom of teaching a man to fish. It's worked to some degree to the past, minus the fish part — just ask fish plant worker turned furnace specialist Gerry Russell.

"You got to have more and more retraining … and get jobs out there," Russell said.

While it may have felt like the cod moratorium spurred the province into a crisis the day it went into effect on July 2, 1992, then, as now, there had been signs of trouble ahead. "We knew sooner or later that something was going to happen," Russell said.

What may make the difference in the 21st century troubles is planning. The task force report's final report is due April 30.

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