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.