Twenty-five years after the signing of the Atlantic Accord, oil revenues are gushing into the province's coffers.
How much cash?
Enough to wipe out this year’s deficit, predicts Dr. Wade Locke.
You read that right — no deficit.
What a turnaround.
Budget 2009 originally forecast a $750-million deficit, but the figure fell to $443 million in December when the province updated its financial numbers.
Locke says we may be closer to no deficit by late March or early April when Finance Minister Tom Marshall unveils his budget.
All because of the rising price of oil. (And the Atlantic Accord, of course. Hallelujah.)
Marshall was in the audience Thursday night at a Memorial University forum (The Atlantic Accord: A New Found Vision) to celebrate the 25th anniversary of the signing of the Atlantic Accord. Which most people loved — except the construction guy who wants more work here. (He made a good point.)
Marshall didn’t say whether Locke is on the mark with his budget projection. But then nobody asked him.
Let’s say Locke is right.
Let’s say Budget 2010 is handed down in a “timely fashion” — in the middle of the soon-to-be announced Topsail byelection.
Like you would.
Do you think news that the Danny Williams administration has slayed the deficit dragon will improve the chances of the Tory candidate?
Is that fair?
Fair enough, but should the deficit projections have been lower from the get-go?
Only then the Williams administration couldn’t take advantage of looking good as it kicks the deficit dragon's arse.
Feel like you’re being played?
And keep in mind the Williams administration doesn't control the price of oil. It's not responsible for all this good news.
Back to the vanishing deficit — imagine how well we’d do this year if the federal Conservatives hadn’t stuck it to us in the last budget with the changes to the 1985 Atlantic Accord.
As for the Accord, the document clearly states that Newfoundland and Labrador is to be the primary beneficiary of oil revenues.
In his opinion, Locke says it is.
Wow. That’s not what I thought. That’s not what John Crosbie (who was also in the audience) said for years.
Locke says when you ad up the benefits from the offshore oil industry — not just straight-up fiscal benefits like royalties and taxes (which is what I would do) — the province comes out ahead of the Government of Canada.
I spoke with Locke after the session and he was careful to say he was giving his opinion. There are others.
I still don’t understand why we needed an Atlantic Accord in the first place.
The Canadian Constitution was changed in 1930 so that provinces (like Alberta) own the resources beneath their soil.
Why wasn’t the Constitution changed later to give provinces like Newfoundland and Labrador ownership of resources beneath the sea?
I’m still waiting for an answer on that one.
Here’s another question: why can’t we get a Fishery Accord with the feds so we can co-manage that resource?
The feds have proven — beyond the shadow of a doubt — they can’t manage the fish.
We shouldn’t have given up control of the fishery in the Terms of Union.
But that’s a whole other kettle of fish.