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How a $6M ferry service highlights Newfoundland and Labrador's overspending crisis

Steve Crocker
Steve Crocker

ST. JOHN'S — A $6-million ferry service to the little island that Ruby Kean has always called home is highlighting Newfoundland and Labrador's overspending crisis.

The year-round service to St. Brendan's cost about $42,000 for each resident last year.

And that price tag has only gone up — the population has slightly shrunk to around 115 since costs were last tallied in 2015-16.

"We assume it's a right,'' said Kean, 49, who has run a convenience store there for 13 years but says business isn't what it used to be. "It's declining.''

Critics say it's just one of many services that must be reviewed in a cash-strapped province where last year's $1.1-billion deficit was higher as a percentage of gross domestic product than any other province.

With a greying population spread thinly over vast geography, Newfoundland and Labrador also spends more per resident than other provinces.

"I think the government has to have some kind of cut-off. When do you stop providing services to a community?'' Richard Alexander of the Newfoundlandand Labrador Employers' Council said in an interview.

His group has consistently pressed the governing Liberals and the previous Progressive Conservative government to bring bloated spending in line with revenues.

"There are five schools in Newfoundland and Labrador with three or less children, and there's 25 schools with less than 25 enrolments.''

The St. Brendan's ferry on Bonavista Bay is just one of the more stark examples of outsize spending.

Transportation Minister Steve Crocker says he needs to ``right-size'' the situation as a review continues of a $73-million ferry system with 15 runs and 42 ports.

"It's at 13 per cent capacity for passengers, 22 per cent for vehicles,'' he said of the MV Grace Sparkes, a $30 million ferry now servicing St. Brendan's. It can carry 16 vehicles and 50 passengers at a time.

Any talk of cutting rural services, however, is touchy. And the dreaded word — "resettlement" — with the prospect of packing up and moving to more populated centres is not raised lightly, Crocker said.

"I'm from rural Newfoundland as well and I have a great sense of pride in my community,'' he said in an interview. "But you know there are conversations we need to have around these services.

``We need to make sure (they) ... fit the size of the population that we're dealing with.''

Alexander said the province can learn from public-private partnerships that have revamped ferry and motor vehicle services in B.C., Ontario and other parts of the world.

Health care and education spending must also be assessed for more efficiency and better outcomes, he added.

Related:

Newfoundland Employers Council releases plan aimed at solving province’s fiscal challenges

Premier Dwight Ball's "way forward'' plan to gradually cut spending and bring the budget back into surplus by 2022-23 relies heavily on offshore oil production, rebounding prices and declining expenses, Auditor General Terry Paddon warned again in a report last week.

Much of the province's fiscal mess can be traced back to over-confidence in oil earnings that plunged when prices tanked in 2014.

"Considerable risk surrounds achieving the targets,'' Paddon said.

Daniel Fields, an economist with the Conference Board of Canada, said Newfoundland and Labrador is now spending about $3,000 more per person than the Atlantic Canada average. Plans to curb expenses are short on detail, he said.

This, as the province's net debt has reached a historic high of $13.6 billion for a population of about 529,000.

"It's a critical time right now,'' Fields said from Ottawa. The 2016 provincial budget already sparked outrage with sweeping tax and fee hikes, he noted. "You can only tax so much.

"It's a ticking time bomb.''

Fields said serious questions must be asked — and soon — about realistic government services.

St. Brendan's has a Kindergarten to Grade 12 school for just nine students. The ferry runs a few times a day back and forth to Burnside at nowhere near full capacity.

You can hear the sadness in Kean's voice when she even thinks of perhaps one day leaving St. Brendan's for good.

She'll relocate if she absolutely has to but would dearly miss her peaceful island life, she said.

"You know the community is there for you. You may not get that in those bigger areas, towns, cities. You may not ever know your neighbour in those places.''

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