Newfoundland Premier Danny Billions

Do you think Danny Williams will be in power in Newfoundland for just about as long as he wants? Hugo Chavez is constitutionally bound to serve only two terms. No such prohibition for Danny. He’ll stay until he gets bored.

Danny got his Hebron deal today. He said in the press release the province will get at least $20 billion over the 25 year life of the project.

But this is important to understanding the overall scope of the economic challenge facing New Brunswick. To get a new revenue stream of $800 million per year from traditional sources like income or sales tax would require an unachievable level of growth. You would have to double the HST revenue or quadruple corporate income tax revenue. And don’t forget this would have to be done in one shot because if you double the workforce to get double the HST, you add double the costs whereas with Hebron you add very little government ‘cost’ to get the $800 million a year in revenue.

Ultimately New Brunswick must soldier on in the realization that it will not be able to compete with Newfoundland and possibly even Nova Scotia will pull away. In fact, we will get some of that Newfoundland revenue through Equalization.

I’ve been to NL twice recently and I hope that Danny reinvests more of the proceeds of this oil into economic development. Remember my chart on R&D last week? Guess which provincial government spends the most – by far – on R&D out of provincial coffers? Alberta. Guess who spends the most on education? Alberta. Guess which province is investing the most in telecom infrastructure? Alberta. Guess who is leading CAnada and maybe North America for online learning? Alberta. In fact, the Alberta budget has been skyrocketing recently even with PC governments.

Newfoundland should do the same. It should invest in Memorial. It should become a hotbed for alternative energy. It should build infrastructure.

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0 Responses to Newfoundland Premier Danny Billions

  1. mikel says:

    It IS important, but not in the way you suggest. This is NOT a deal that the oil companies wanted, remember when Danny first started playing hardball and all the oil companies started talking about how they were going to leave NFLD ‘high and dry’.

    However, we KNOW that if there is oil then a company will eventually come around. It comes down to how much you value your resources. What a difference ther e is between Danny’s holding out for the best possible deal for Newfies, and Grahams “we’ll give you them in exchange for jobs” approach.

    As we know from the uranium mining experience, the NB government could not care less about New Brunswickers. It took massive protest and work to get them to SAY they were going to ‘buckle down’ to legislate. But who actually believes that?

    There is one thing that every good salesman knows (even poor salesmen know it, but just don’t have the skills to do anything about it), and that’s that if you ACT like your ‘product’ is a piece of crap then people will only pay crap prices for it and treat you like dirt. Of course that doesn’t just come down to confidence, we know that the Premier has a vested interest in uranium mining, so its not like it comes as a surprise that they don’t want to legislate it, let alone ban it.

  2. Rob says:

    Newfoundland should do the same. It should invest in Memorial. It should become a hotbed for alternative energy. It should build infrastructure.

    It should also pay down its debt. Alberta has no public debt. Newfoundland and Labrador has the highest per capita.

  3. Anonymous says:

    Nfld has Danny and we have Lino and company.Your preference?

    MONTREAL, ROME — One of Canada’s wealthiest businessmen, Montreal cheese magnate Lino Saputo, is denying that his company has ties to a Mafia money-laundering scheme.

    Italian police arrested Rome-based entrepreneur Mariano Turrisi last month in connection with an alleged plan to launder $600-million (U.S.) for Vito Rizzuto, the godfather of the Montreal Mafia.

  4. Anonymous says: