Craig Pardy’s Provincial Tax Review Could Rewrite the Way Newfoundlanders Pay for Everything

When a new finance minister takes over, a certain silence descends upon the Confederation Building in St. John’s. Boxes are unpacked. Outdated briefing books are removed from the shelves. The numbers are run again by someone, usually an unidentified analyst, and the results are worse than anticipated. When Craig Pardy entered the finance portfolio last fall, that appears to be about what transpired. He was explaining to reporters in December that the provincial deficit had skyrocketed to $948 million, more than $300 million more than the August estimate made by the previous Liberal government. “Deeply troubling” was how he described it. Since then, it has persisted.

Although it may become one, the Craig Pardy Provincial Tax Review isn’t being marketed as a tax reform package. In reality, he has declared a line-by-line audit of all 300 fees and levies levied by the provincial government. 2016 saw the introduction of many. Even doubtful voters raise an eyebrow when they learn that some, according to Pardy, are more expensive to collect than they actually bring in. He has given each department a deadline to record all fees, provide an explanation for their existence, demonstrate their administrative costs, and display their earnings. The responses arrive after the budget.

The intricacy of Pardy’s framing of this is intriguing. He’s not saying that all 300 will be scrapped. Compared to what Newfoundland voters typically hear, his promise to look at them is a more sincere political stance. He made it clear to reporters during a press conference in early April that “it’s not simple” to simply list every fee; someone needs to track the origin, the justification, and the return. That is not a campaign statement, but rather that of a finance minister speaking like an auditor. It remains to be seen if he can maintain that tone throughout the budget cycle.

The politics surrounding him are intricate. For the majority of the spring, John Hogan, the leader of the liberal opposition, has accused the PC government of putting off addressing affordability. No reduction in income taxes. No gas break was promised. No complimentary medical travel. Hogan’s stance is simple: make use of the tools that are currently available. Pardy’s stance is also clear-cut and likely more practical: in a province with a deficit, you don’t start pulling fiscal levers without knowing what you’re doing. “This budget is coming very soon,” he informed reporters on April 1. “I would ask him just to be a little more patient.” Every finance minister eventually says something like that.

Everything is complicated by the oil question. Since Newfoundland is an oil-producing province, the largest variable in any given year is offshore earnings. Pardy postponed the budget date in part due to the volatility of world oil prices associated with the U.S.-Iran conflict. He acknowledged this. The math settles, the oil settles. The math breaks again as the oil jumps. Every finance minister in Atlantic Canada has had to deal with this pressure for twenty years, and it doesn’t get any easier with familiarity.

As this develops, it seems that the tax review is more about political narrative than individual fees. The Wakeham government ran on a platform of safer communities, improved healthcare, and reduced taxes. Before facing the more difficult issues of structural spending, Pardy can demonstrate progress by delivering even a small reduction in nuisance fees, the ones that hurt but don’t generate much revenue. To be honest, it’s unclear if that will be sufficient for voters who are already under pressure from their grocery bills. We’ll learn a lot on April 29. A lot, but not everything.