That, in the opinion of this House, a special committee should be established to study the severe unemployment problem in Newfoundland and Labrador.
Madam Speaker, it is no with a great sense of pleasure that I arise today to present my private member's motion that the House establish a committee to study the chronic unemployment problem in Newfoundland and Labrador.
The unemployment rate in Newfoundland is one of the most glaring failures of Canadian Confederation. I am under no illusions today that by simply introducing this resolution we will solve the unemployment problem in Newfoundland and Labrador, but I have to start somewhere. I promised the good people of St. John's east, many of whom are unemployed, that I would bring their concerns to the floor of the House of Commons.
Every poll that has ever been done in the province of Newfoundland and Labrador indicates the one pressing problem that has always been on the top of the agenda is unemployment. As we talk about the unemployment problem in Newfoundland and Labrador today the Canadian economy is rebounding, but in Newfoundland the situation seems to be worse than ever.
Right now in Newfoundland we are losing people at the rate of approximately 7,500 per year. That may not seem to be all that serious in the Canadian context, but when we consider a small province like Newfoundland and Labrador with a population of only a half million people losing 7,500 people per year is very serious indeed. It has a devastating effect upon the collective well-being of the people.
Only a few weeks ago I had a meeting on a little island off the coast in my riding. It is not too far from St. John's. It is a small place called Bell Island. It used to be a great mining town from the late 1800s up to 1966 when I believe the mining operation closed down.
Until recently it had a population of about 10,000 or 12,000 people. Now the population has gone down to about 3,500 people. I had a meeting with the mayor of that island, Gary Gosine, who indicated that he could drive around his town almost on a daily basis and point to houses that are empty because people are leaving to go elsewhere. They do not have any jobs there and the population of that little area has gone down from 5,200 or 5,300 people down to 3,500 people in a very short period of time.
We are losing people at the rate of 7,500 per year. For a population of a half million that is devastating.
The Newfoundland unemployment problem has been studied many times. When I served in the Newfoundland House of Assembly we set up a royal commission to look at the problem. There were no obvious or quick solutions at that time. Our economy is largely a resource based economy. We depend upon fish, minerals and paper products. It is a resource based and export based economy.
The new global economy is a knowledge based economy. While we do have somewhat of a high tech industry in Newfoundland it is a very small one. In spite of that we are to a small extent in the business of exporting some of our engineering skills in the marine area and in the offshore oil and gas sector. The growth we are experiencing in these sectors is not enough to even remotely offset the bleeding that is occurring in Newfoundland and Labrador.
Two areas of our economy that have been hit very hard over the last number of years is the fishery and the public sector. The northern cod fishery is in a very bad way. About 30,000 fishermen and plant workers are on TAGS in Newfoundland, the Atlantic groundfish strategy as it is known. Most TAGS money has been used directly by people to keep bread on the table.
As the auditor general pointed out only recently in his report, the millions of dollars spent on training through TAGS was really a waste of time, a waste of energy and worst of all a waste of money. Most people were in a holding pattern. They were waiting for cod to come and therefore were not all that interested in moving on.
Many fisher people, especially the older generation of fishermen, got involved in the fishery back 25, 30 or 35 years ago. They had limited formal education. When TAGS came out they found themselves in the position of probably having to get a high school education before they could move on to the various technical schools they were expected to become involved in and enrolled in.
I have always said it is bureaucratic insanity to expect people with limited education who have been on fishing boats for 25 or 30 years to suddenly upgrade to a high school education, get into a technical institute and sit down in front of a computer. For what purpose? I do not know. A lot of the money spent on various training programs, we have to agree with the auditor general, fishermen and other people, was a waste of money.
A lot of these people have been waiting for the fishery to rebound but it has not rebounded. The reality today is that the federal TAGS program is about expire. The vast majority of the people on TAGS are at a loss what to do next. They have hung on but it seems now that they will be hung out to dry.
Politicians in the House have shouted across the floor that TAGS was a mistake and should have ended sooner than later. I agree the TAGS could have been a much better program. It could have encouraged people to leave the industry through licence buyout and early retirement programs. Training money should have been directed to people who were either young enough or enthusiastic enough to want to go ahead with a career change. It could have encouraged people to leave the industry.
Most of all I keep saying the federal government could have been brutally honest with people and not given them an indication that their future prospects in the fishery were good. Instead, we are faced with thousands and thousands of people whose incomes will soon be cut off, who have not returned to the fishery, who have not retrained for this new economy that we are into, who cannot afford to move away to find work and whose immediate prospects happen to be welfare.
I get hundreds of people coming through my constituency office in St. John's on a weekly basis. My mind goes back to the Prime Minister at his town hall meeting where he was talking to an unemployed woman looking for a job. The Prime Minister, in a cavalier way, said “Well, maybe you can move on to another part of our country”. At the same time, while the Prime Minister was making that kind of a submission to that woman, he had terminated the mobility assistance program. These people, already facing unemployment, are now also faced with having to stay where they are because they do not have the money to move on.
The public sector plays a very important role in the Newfoundland economy, a much bigger role than it should play probably. Federal transfers for equalization in health and education make up about half of our provincial budgets. We do have our share of equalization payments. The unemployment insurance system provides income to large numbers of seasonal workers.
When the federal government decided a while ago to get its fiscal house in order, it was devastating for the Newfoundland economy because the federal transfers to the provincial government went down hill drastically and, of course, the provincial government started to make its cuts to make up for the federal government's transfers going down.
The provincial government then passed the cuts on to the various municipalities as well who in turn made all kinds of cuts which again had a devastating effect on the economy. The lay-offs at all levels of the public sector not only reduced the services, they also flooded the job market with some of the best and most well-educated people we had. That is why the Liberal Party is doing so poorly in Atlantic Canada. It has not really got into showing the people of Atlantic Canada that it cares about the unemployment problems that we have.
We cannot impose the kinds of dynamics of a central Canadian economy or a western Canadian economy on the people in the Atlantic region because it makes no sense at all.
We can talk about the problem all day but what are we going to do about it? I want to make a few suggestions, although I stand the chance of running afoul of some of the more right wing attitudes that are displayed in the House every now and then. First, the TAGS program cannot be cut off cold turkey. That cannot be done without a transitional program. Thirty thousand people cannot be thrown on to the streets with nothing to do and nowhere to go.
We need licence buy-outs. We need training programs that will address the real jobs that are out there. We need a generous retirement program. If these initiatives happen to go beyond what might be considered to be normal, well so be it. Just as Quebec is a distinct society in its own way, then Newfoundland, when it comes to the kinds of economic circumstances that we have to live with, is distinct as well. The alternative is to do nothing and to run the risk of an awful lot of social unrest.
Newfoundland, like the other provinces, needs a better deal in the equalization program. We need a better deal in Confederation, in particular in equalization. It keeps us from starving but it also keeps us permanently poor as well.
Much has been said about the Voisey's Bay nickel mine in Newfoundland. I have a great deal of confidence that it will be a great mining industry when it is fully developed. It is worth billions of dollars.
We must never forget, however, that every dollar Newfoundland gets in taxes and royalties is subtracted dollar for dollar from our equalization entitlements. To be one dollar better off, we must first raise a billion dollars a year in extra revenues just to overcome the loss of the equalization.
In the case of Hibernia, we had a special management deal whereby we would only loose 70¢ in equalization dollars. This is a good start. We need a better formula than that if we are ever going to catch up and go out on our own. The formula needs to be extended to all major resource developments. On paper we have a lot of resources in Newfoundland and Labrador. Under the current arrangement, we will never break free and close the poverty gap.
I realize I am running out of time. Maybe later on I will have a chance to say a few more words. I appreciate the opportunity to say a few words on this.