Finance Minister Sheridan causes little buzz as he trims spending on infrastructure projects
© Guardian photo by Heather Taweel
Finance Minister Wes Sheridan
There were no great expectations for the 2014-2015 capital budget released Wednesday and Finance Minister Wes Sheridan didn’t deliver any surprises. The minister is trying desperately to balance the province’s books before the next provincial election and his hands are tied in a fiscal Gordian Knot.
The budget contained almost no new initiatives and was mostly an update of previously announced projects. The province plans to spend $73 million on capital projects this year — a precipitous drop of $18 million from last year — and hopes to continue to shrink spending over the next five years.
The province is cutting spending on roads, bridges, buildings and other essential infrastructure projects while pouring money into websites and software. It does seem like an unusual trade-off for a capital budget — spending millions on new software to improve efficiency and productivity, and revamping its website to allow for more online payments options for a full range of provincial services.
The optics won’t go over well with some Islanders, especially those in rural areas in dire need of better roads and bridges who hear about websites and software and then will dismiss it as a waste of money by Charlottetown bureaucrats.
The province’s five-year plan for capital spending shows a decrease to $51 million by 2018-19, less than half the $133 million spent in 2009-10 as the province engaged in stimulus spending to help the economy recover from the worldwide recession. Mr. Sheridan predicts if he can get to a $55-million mark in capital spending, at least the province’s net debt won’t increase. That’s some consolation.
The Opposition was quick to note the capital budget contained almost no new projects while criticizing sizable cost overruns. Leader Steven Myers was especially disappointed a youth addictions facility was not included in infrastructure plans.
Mr. Sheridan suggested his past stimulus budgets kept Islanders working and the economy moving ahead during the global economic downturn. What happens if he keeps cutting while approaching a provincial election? The temptation will be great in early 2016 to open the purse strings again. Our finance minister faces a very fine balancing act indeed for the next 2 1/2 years.
Long-term ferry deal essential
There are high expectations the federal government and Northumberland Ferries Ltd. can agree on a five-year contract to provide some stability on the essential transportation link between Wood Islands, P.E.I., and Caribou, N.S. The current three-year deal expires next March and the seasonal service will end on schedule Dec. 20 and hopefully resume sailing next May 1.
Like so many times before, there are nagging doubts if the service will survive to sail another year. No one thought the vital link between Yarmouth, N.S., and Maine would ever be in trouble but that service quickly ended when the new provincial NDP government refused to pay an annual $6-million subsidy. The impact on Yarmouth and surrounding areas was devastating and it cost the government seats and support throughout the province.
So there is a lesson there on the importance of a new agreement. The province has been busy lobbying both sides to get a deal done soon and not wait until next April to face another crisis.
Ottawa should be on board after federal ministers were at Caribou earlier this year to announce a $13 million deal for improvements to ferries, berths and breakwaters. More than 150 jobs are at stake in eastern P.E.I. and northern N.S., and the huge benefits for truckers, motorists and tourists make a new deal essential for everyone. There will be a high political price to pay for failure.