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The Big Reset - Reimagining Government and Governance

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The Big Reset - Reimagining Government and Governance Table of Contents 1. Foreword ............................................................................................................................ 1 1.1 Acknowledgements ....................................................................................................................... 4 2. Introduction ....................................................................................................................... 5 3. Economic, Demographic and Social Overview ............................................................... 7 3.1 Economic Overview ....................................................................................................................... 8 3.2 Demographics Overview ............................................................................................................. 19 3.3 Social Overview ........................................................................................................................... 26 4. State of Financial Affairs ................................................................................................. 34 4.1 Debt and Deficits ......................................................................................................................... 36 4.2 Provincial Indebtedness: The True Debt ..................................................................................... 38 4.3 Pensions and Post-retirement Benefits ....................................................................................... 42 4.4 Credit Ratings .............................................................................................................................. 43 4.5 Revenues and Expenditures ....................................................................................................... 44 5. The Need for Four Strategic Resets ............................................................................... 55 6. The Big Reset - Reimagining Government and Governance ........................................ 58 6.1 The Nature of the Political Process ............................................................................................. 59 6.2 Balanced Budget Legislation ....................................................................................................... 62 6.3 Strong Public Service and Public Sector Governance ................................................................ 64 6.4 Evaluation of Programs and Services ......................................................................................... 65 6.5 Mandatory Reporting ................................................................................................................... 66 6.6 Agencies, Boards and Commissions .......................................................................................... 69 6.7 Focus on Core Services .............................................................................................................. 71 6.8 The Cost of Service ..................................................................................................................... 72 6.9 Government Relationships with Public Sector Unions ................................................................ 73 6.10 Muskrat Falls ............................................................................................................................... 75 7. Big Reset –Industrial Revolution 5.0 and Transition to the Green Economy .............. 79 7.1 The Climate Change Challenge .................................................................................................. 79 7.2 Industrial Revolution 5.0 .............................................................................................................. 81 7.3 Renewable Electricity .................................................................................................................. 85 7.4 Low Carbon Oil and Gas Development ....................................................................................... 86 7.5 Low Carbon Transportation ......................................................................................................... 95 7.6 Hydrogen ..................................................................................................................................... 96 7.7 Provincial Climate Change Action Plan ..................................................................................... 100 7.8 Supporting and Expanding Existing Industries .......................................................................... 101 8. Big Reset –The Social Compact Refocused ................................................................ 136 8.1 Labour Market Development ..................................................................................................... 138 8.2 The K-12 Education System ...................................................................................................... 145 8.3 Post-Secondary Education to Support Technology and the Green Transition ......................... 155 8.4 Seniors Care and Housing Options ........................................................................................... 166 8.5 Health and Health Care ............................................................................................................. 170 8.6 The Current Social Safety Net ................................................................................................... 174 8.7 Immigration ................................................................................................................................ 181 9. The Financial Improvement Plan .................................................................................. 184 9.1 Taxation ..................................................................................................................................... 186 9.2 Fees and Fines .......................................................................................................................... 199 9.3 Tax Leakage .............................................................................................................................. 200 9.4 Expenditure Reduction .............................................................................................................. 201 9.5 Reconfiguration of the Province’s Asset Portfolio ..................................................................... 205 10. Conclusion ..................................................................................................................... 214 11. Summary of Recommendations ................................................................................... 217 12. Agencies, Boards and Commissions, Government of NL .......................................... 247 13. Glossary ......................................................................................................................... 252 14. Bibliography .................................................................................................................. 256 This page is intentionally left blank. 1. Foreword I am honoured by the opportunity Premier Andrew Furey has given me to lead this Review. I have returned to my home province with fresh eyes and a strong belief that this Economic Recovery Plan will benefit my fellow Newfoundlanders and Labradorians. The province is in financial trouble. Over the past decade the Provincial Government has continued to borrow money to fund its annual expenditures. This is unsustainable and has to be urgently addressed. Newfoundlanders and Labradorians are well placed to put the province on more sustainable financial footing. The province has exactly the right assets to lead as the world grapples with the imperative of our generation, namely, the need to transition economies everywhere to net-zero carbon emissions. This is one of the big resets that is proposed in this recovery agenda and in this essential financial improvement plan. The Big Reset is a transformational plan for the province that attempts to tie all aspects of the economy and society together to meet some of the biggest challenges and opportunities ever faced by the province. The technological revolution and the revolution related to climate change require a shift in how the province and the world does business. At the same time, there is a need for greater accountability and a better, leaner government. The Big Reset also requires a change in how government manages it financial affairs. The financial situation must be addressed before the province can realize its potential. This will be difficult to do under existing structures. Government and its operations must be reimagined. The province’s young people need to be positioned better to assume the responsibilities that these changes place upon them and this requires a change in how they are educated. With the aging of the population and the decline in birth rates, young people will have to be more productive and better educated as they build and power the new economy. Page 1 Over the past six years the forces demanding climate change be prioritized have gathered strength. What were once general governmental targets for reducing emissions have become specific plans with timetables and budget allocations. Green energy projects have been lifted off the drawing boards and into reality. Over the coming decades, trillions of dollars in capital are expected to be allocated by corporations and governments toward this effort. PERT’s recommendations seek to put
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