Speaking Notes - Honourable Paul Davis, Premier of Newfoundland and Labrador, St. John’s Board of Trade, November 12, 2014
Good afternoon, everyone.
I want to thank you for the invitation and the opportunity to join you this afternoon.
I want to thank Lisa Walsh for the kind introduction. Lisa is an example of the kind of entrepreneur that is driving economic diversification in Newfoundland and Labrador today.
Her company, Indigina, is located in the historic district of Topsail which I am proud to represent. She uses local materials to create cosmetic products that are in demand all over the world. We should be very proud of the great work she’s doing. It reflects well on us as business people and innovators. Thanks for all you do, Lisa.
And before I begin, I would be remiss if I didn’t comment on the remarkable ceremony yesterday at the National War Memorial in downtown St. John’s.
I joined thousands who gathered to remember those who gave their all for our freedom. That kind of ceremony was repeated in almost every community across our province.
It’s heartwarming to see how we as a society embrace Remembrance Day.
I’d like to commend and congratulate the Legion and all others who organized and co-ordinated those many events. Thank you.
Today, I intend to give you a clear indication of where I stand, where I’ll lead and why I firmly believe that the PC Party is the right choice for our province into the future.
But first, I want to draw your attention to the screens for a short video presentation that clearly illustrates how this province is experiencing positive change, economically and socially.
As you can see, we have made great progress in this province.
The task ahead of the PC Government is to reconnect with the reality of our accomplishments, to grow the understanding of our goals as a government and to outline the vision we have and the positive future change we are committed to delivering to the people of the province.
I am first and foremost a listener.
I believe it’s a sign of strength to lead by listening, to plan collaboratively and to act collectively.
In the 21st century, that’s the kind of accountable leadership people demand. They expect to be active participants in governing.
Different choices at the ballot box will take Newfoundland and Labrador in widely different directions.
Before the next election, there should be many opportunities to contrast and compare platforms, ideas, policies and details. I want to outline some my policies and plans today.
Governing should never be a short-term consideration.
While we budget on an annual basis, fiscal policy requires more of a focus on the future.
That’s especially true if you live with an economy like ours that is blessed and, yes, challenged by the uncertainty of commodity pricing.
Petroleum and mineral prices go up and they go down. Exchange rates fluctuate. Production schedules are never fixed. Those are the variables we can’t control.
And, yes, we are in a period of budget deficits. A few short years ago, we were in a period of budget surpluses. In a few short years, we will be back to surplus.
Balanced over the past decade, the fiscal performance of this province has been steady. We have used the surpluses wisely and managed the deficits prudently. It’s not easy to do. You can’t be everything to everybody.
We have taken the billions of dollars in oil revenues that have accrued to the province in the past decade and invested it in debt reduction, infrastructure renewal, educational opportunity, business development, economic diversification and the health and wellness of our people.
Our PC Government has made a conscious choice to put resource revenues to work for Newfoundlanders and Labradorians in several different ways.
First, we chose to pay down a massive chunk of the net provincial debt. That freed up millions of dollars each year that otherwise would have been exiting this province as interest payments.
Tackling the debt was a sound choice that was widely endorsed in the province, particularly by this Board of Trade. And, I want to ensure you that debt reduction will remain an essential part of our fiscal policy.
Secondly, we invested in infrastructure.
Since 2006, our government has invested more than $6 billion in infrastructure renewal, benefitting communities throughout Newfoundland and Labrador.
We upgraded highways from Western Labrador to the Eastern Avalon – this year alone we spent more than $150 million on road work.
We’re replacing schools and hospitals, building new clinics, building ferries, upgrading water and sewage treatment, installing waste management infrastructure.
Some of those expenditures are absolutely essential, because critical infrastructure needs had been neglected under previous governments. They had their own fiscal challenges. But when we gained additional fiscal capacity, the PC Government, as good stewards, had a responsibility to address that significant infrastructure deficit. And we met that responsibility head on.
Ongoing infrastructure projects also represent tangible investments in opportunities for regions of the province that need to grow and diversify. Infrastructure upgrades create jobs and spinoffs in rural regions and make those regions more attractive to investors. Our approach is among the principal reasons that investor confidence in this province has remained strong while elsewhere it has waned.
Your PC Government maintained these infrastructure investments even when the economic downturn hit. That approach won the praise of Mark Carney, then Governor of the Bank of Canada and now governor of the Bank of England. That approach enabled many businesses to weather the downturn, and positioned our economy to rise in its aftermath more quickly than others could.
Last year, while others struggled, Newfoundland and Labrador led the entire country in GDP growth, posting a number surpassing even China’s. Policy choices made that happen – policy choices of your PC Government.
Thirdly, we invest in innovation, technology and R&D. Through our oceans strategy, through investments in broadband, and through investments in the Research & Development Corporation, we open doors for companies and regions to modernize and compete with the best in the world, drawing benefits back home.
We complement these with investments in Memorial University and College of the North Atlantic, investments to freeze tuition fees, reform student aid, grow the med school, build new residences and core science facilities – investments that make our post-secondary sector the most attractive in the country.
Our approach has drawn people here from around the world and laid a solid foundation for immigration and future growth. And the work they are doing is world leading.
Just last week two Memorial University researchers, Beverly Diamond and Kirk Luther won two of only five major national research awards from the Social Sciences and Humanities Research Council of Canada.
Dr. Diamond’s award was the highest honour a researcher can receive. She came to MUN from away and has carved out a great career and a leading international reputation in her field which involves the study of traditional music (ethno-musicology). Her work shines a positive spotlight on our university and our province. Our government’s ongoing support for MUN helps that happen.
The money we spend at MUN and CNA and in supporting private sector R&D is bringing those future Newfoundlanders and Labradorians to our shores and making them want to stay.
In terms of immigration – and this will be “news” to the business community – last week we concluded discussions with the federal government that will increase our Provincial Nominee Program quota from 300 to 500 nominations annually. These are individuals that the province nominates to meet labour market needs in Newfoundland and Labrador.
The federal government's new Express Entry system that is set to launch in 2015 will provide our province with an additional 550 nominations over and above that program.
In total, this will give the province influence over bringing 1,050 new immigrants to Newfoundland and Labrador every year.
The St. John's Board of Trade has been vocal in the need to increase immigration to our province as one of the foundations for increasing our population. We look forward to working with the business community to increase immigration to our province through these new tools.
Immigration will also play an important role in the new Provincial Population Growth Strategy. The Strategy is in the final stages of development and I look forward to launching it in the near term.
Under the Strategy, our government will take action to find the skilled talent businesses need to thrive. Immigration is a key tool in this.
We also invest in aquaculture. Scores of people all over the south coast and across the province are earning a good living working close to home harvesting and processing, transporting, marketing and selling farmed salmon and other aquaculture products.
Fourthly, we invest in business incentives, tax cuts and, just last week, venture capital.
The venture capital initiative was applauded by people in this room and business leaders across the province and the country – people who understand the critical role investment capital plays in new business development and economic diversification.
We believe that investments in business growth benefit all of us. They drive our economy forward.
We’ve made Newfoundland and Labrador one of the most attractive locations in the Atlantic region to operate a business, and your Board of Trade has applauded us for doing it.
Fifthly, we do our work with a social conscience.
We’ve allocated more than a billion dollars in poverty reduction to give people a step up from poverty to self-reliance.
We’ve invested in social housing. We’ve put money into incentives to help people transition to the work place, including extending coverage for their medications to ease that transition. This benefits thousands of people. And in so doing we have decreased dependency on the system. Today, there are fewer people relying on social assistance than when we took office. Employment numbers are higher than they have ever been, and businesses are thriving.
A sixth thing we’re doing is to make the necessary investments to provide essential services to the public.
We’re improving education, addressing long term care, crime and public safety concerns.
As just one example, since 2004 we have spent more than $160 million to address health care wait times in the province.
Our province is first in the country in managing priority wait times for radiation, cardiac bypass surgery, cataracts, hip fracture repair and hip and knee replacements.
A seventh thing we’re doing is investing our revenue from natural resources to grow, diversify and extend the life of both our renewable and non-renewable energy industries.
We’re doing this through the province’s publicly-owned energy corporation, Nalcor.
We all own Nalcor – every person in this room – every Newfoundlander and Labradorian. It’s our company. Its success ultimately benefits us all.
Through Nalcor we demanded equity stakes in our offshore oil projects – equity stakes that required up-front investment, but ramp up the returns. That’s prudent governing.
Equity partnership works. You need look no further than Hibernia and the Government of Canada’s equity stake that delivers enormous returns on their initial investment.
Similarly, we purchased equity ownership shares in other offshore projects – 4.9 per cent in Hebron, 5 per cent in the White Rose Expansion and 10 per cent in Hibernia Southern Extension.
And, to make it clear to our potential partners, we made it government policy that any future oil developments will include a 10 per cent equity participation by your government.
Industry welcomes the clarity. Newfoundland and Labrador benefits from our enhanced role as we become partners in the projects, gain seats at the decision-making tables and increase the financial returns that accrue to the province.
That is yet another clear example of different electoral choices leading to different governments, different policies and different outcomes.
We used some of those offshore revenues to invest in Nalcor so it could fund exploration initiatives of its own.
Nalcor undertook a massive seismic survey in our offshore that covered an area larger than the Gulf of Mexico. The result: 24 solid leads that spurred interest by major international players in the oil industry.
The potential payoff is apparent to anyone who understands the sector. Interest in our offshore has ramped up. There are new discoveries that will ensure a healthy return from oil revenues for decades and decades to come.
Through Nalcor, we also invested in the development of Muskrat Falls.
Before the Liberals left office in 2003, they were on the verge of giving the entirety of the Lower Churchill to Quebec, with a pittance of returns to this province. It was a deal that then Quebec premier, Bernard Landry, called “a gift from heaven” for his province.
I need not remind the supporters of Muskrat Falls, including the St. John’s Board of Trade, that this bold project opens up a new route to market for power, a new opportunity to be leaders in green energy growth in this country, a new opportunity to turn our power to our economic advantage and use it to drive economic diversification here at home for a hundred years and beyond.
The PC Government made all these choices to invest your money for now and the future.
The business sector is keenly aware of this.
This city is booming because of the choices we made.
This province is booming because of the choices we made.
So in answer to the question: Where are the benefits from the billions of dollars we have earned from our natural resources?
They are all around you. They are all around this province.
We are the envy of the country. We are stronger than we have ever been in our history – stronger in employment, stronger in personal income, stronger in retails sales, stronger in capital investment, stronger in business confidence.
This is happening because of all the hard work you and your colleagues in the business community are doing. And we, in the PC government, are working hard for you and with you to continue the momentum.
The Conference Board of Canada, the leading economic think tank in our country, heralded Newfoundland and Labrador as Canada’s “economic juggernaut”. Imagine hearing that a decade ago – and what message do we want to hear from the Conference Board and others a decade from now?
That will depend on our vision.
The vision of your PC Government is firmly focused on the hopes and aspirations of the people of Newfoundland and Labrador. It is driven by three basic principles:
The PC Government I lead has only just started. We’ve laid a solid foundation. Now what about that future potential?
That potential includes the major oil developments by Statoil off our coast. Their Bay de Nord discovery was the largest conventional oil discovery in the entire world in 2013. There are hundreds of millions of barrels in estimated recoverable reserves. These and other discoveries confirm that we will have an oil industry for decades to come.
The future includes clean, green, hydro energy powering this province for generations to come. Yes, for generations to come.
In 100 years and beyond, decisions we are making today will still be supplying low cost energy to our homes and businesses.
Stable rates, stable supply and 98 per cent clean generation happened on our watch.
And, with foresight and a solid plan, we remain focused on the lead-up to Upper Churchill reclamation.
We will be ready to take advantage of the many opportunities that Churchill and other hydro developments present to us in future.
The future includes more diverse businesses and business opportunities.
It includes an expanded high tech sector that builds on our strengths in ocean and resource engineering, marine technology and aerospace.
It includes an ever-expanding tourism industry.
It includes, small enterprises spread throughout the province that create small numbers of jobs individually, but which add up to large numbers of jobs collectively throughout rural Newfoundland and Labrador.
Our recent investment in venture capital, as one example, creates a total pool of close to $85 million and mentoring expertise that entrepreneurs can tap into to create opportunities all over the province.
The deliberate choices that the PC Government has taken have gotten us to where we are today. The prosperity in this proovince is evidence that our approach is sound.
The vision we put forth, and the plan we execute based on that vision is what will lead us into the future – a future where meeting the needs of our children, our families, our seniors will be our priority.
The people of Newfoundland and Labrador can separate the facts of our record and our plan from the fiction being peddled by those with few ideas and fewer details – those who advocate change for the sake of change and for their own political benefit.
Jeff Bezos, the CEO of online mega-company, Amazon, recently said: “If you never want to be criticized, don’t do anything.”
I will risk criticism because, as Premier I must act.
But the actions taken will always be informed by listening to the advice, guidance and counsel of the people of our great province.
Newfoundland and Labrador continues on an upward trajectory and it’s because of the steady hand the PC Government has had on the economic and social tiller over the past decade and the positive future change that we present.
I look forward to working with the Board of Trade and the business sector in the months and, yes, years ahead as together we continue to build this great province of Newfoundland and Labrador.