An economist at Memorial University in St. John’s, N.L., says staggering debt, struggling industry and barely side-stepping bankruptcy is nothing new for Newfoundland and Labrador as the province stares down the barrel of an election.
In a recent interview, Doug May says the province faced towering financial challenges after the 1992 cod moratorium similar to the problems it faces today.
He says overcoming today’s problems – which include the highest per capita net debt in the country – will come down to leadership’s willingness to make unpopular decisions and say no.
May says after former premier Dwight Ball wrote to the federal government last spring and said the province couldn’t make payroll, Ottawa is acutely aware of exactly what state the province is in.
But in Saskatchewan, a province that also flirted with bankruptcy in the 1990s, University of Regina economist Jason Childs says there may not be much appetite for an outright bailout from Ottawa these days, especially with other provinces struggling in a pandemic.
With a provincial election set for Feb. 13 and a slew of scheduled debates ahead, the leaders of Newfoundland and Labrador’s political parties will likely face tough questions this week about just what they’ll do to dig the province out of debt and get its struggling, oil-focused economy humming.
This report by The Canadian Press was first published Feb. 1, 2021.