The Grimes Government, 2001-2003
Roger Grimes served as premier from 13 February, 2001 until 6 November, 2003. It was a difficult period for the provincial Liberals, marked by internal strife, declining popularity, and strong opposition from a revitalized Progressive Conservative Party. Nonetheless, the Grimes administration made some important decisions. It negotiated a deal to develop Labrador's potentially lucrative nickel deposits and secured the White Rose offshore oil project. It also took steps to make government more transparent by televising sessions of the House of Assembly and reappointing a provincial ombudsman.
There were also setbacks. Talks concerning the development of the Lower Churchill River's hydroelectric potential ended in failure, as did efforts to gain greater control over the fisheries. Moreover, the Liberals were bitterly divided internally after the 2001 leadership campaign and convention. Grimes lost six cabinet ministers during his premiership. A general election on 21 October, 2003, returned a strong Tory majority, ending 15 years of Liberal government.
Brian Tobin's abrupt departure from provincial politics on 16 October, 2000, left the Liberal party in disarray. The loss of a popular leader only 20 months into his second term damaged the party's standing. There was widespread suspicion that Tobin had used the premiership as a stepping stone to the prime minister's office, seemingly confirmed when he was appointed to the federal cabinet one day after his resignation, and one month before a federal election in November. His failure to negotiate successfully the Voisey's Bay and Lower Churchill River projects, both of which were central to his 1999 election campaign, had also disappointed many of his supporters.
Deputy Premier Beaton Tulk replaced Tobin on an interim basis, and a Liberal leadership convention was scheduled for 3 February, 2001. Three provincial cabinet ministers entered the race - Roger Grimes, John Efford, and Paul Dicks. The frontrunners were Grimes and Efford. Both men were in their 50s, had been in provincial politics since the 1980s, and came from small communities (Efford from Port de Grave and Grimes from Grand Falls-Windsor), but their political styles were strikingly different. Grimes had handled some difficult portfolios during his 11 years in politics without attracting controversy. It was also widely believed that he would be able to conclude negotiations on Voisey's Bay with Inco. Low-key and with a proven track record, he was backed by the party establishment.
Efford was a charismatic and populist politician, but also more unpredictable and outspoken. A strong supporter of the seal hunt, Efford sparked controversy in May, 1998, when he told the House of Assembly that he "would like to see the six million seals, or whatever number is out there, killed and sold, or destroyed or burned. ... The more they kill, the better I will love it." In 2000, he announced that he would "lead riots in the streets" unless federal Fisheries Minister Herb Dhaliwal reversed a decision granting Prince Edward Islanders licences to fish for shrimp off Newfoundland (the decision remained in place). Efford's passionate defence of fishers and sealers gave him tremendous grassroots support, but his volatility and confrontational rhetoric alienated some members of the Liberal establishment.
In the end, Grimes won the leadership by 14 votes and assumed the leadership of a fractured party. Dicks refused to serve under Grimes and retired from politics to resume his law practice. Similarly, Efford turned down a cabinet position, and resigned his seat in May 2001 to enter federal politics.
Liberal infighting and Tobin's departure created a public backlash. On 30 January, 2001, the Progressive Conservatives won two by-elections in traditional Liberal districts. Tobin's provincial riding, The Straits and White Bay North, had been Liberal since Confederation, but fell to Tory candidate Trevor Taylor. The Liberal stronghold of St. Barbe also became Conservative when Wallace Young defeated Joseph Kennedy by 23 votes. By-elections were held on 19 June 2001 to fill Dicks's and Efford's vacated seats. The Conservative party's popular new leader Danny Williams easily won Humber West, while the Liberals held on to Port de Grave by 98 votes. By then, the Conservatives had surged ahead of the Liberals in opinion polls.
New Style of Leadership
When Grimes assumed office in February, 2001, the Liberals had been in power for 12 years. Some critics thought that they had grown increasingly arrogant and secretive during their long tenure. Grimes tried to reinvigorate the party by differentiating himself from previous administrations, and from Tobin in particular. He promised to make government more transparent by overhauling its 20-year-old Freedom of Information Act. In addition, he undertook to renegotiate the province's equalization formula with Ottawa, regulate gasoline prices, and lower university tuition fees.
Highest on his list of priorities, however, was Voisey's Bay. Minutes after being sworn in as premier on 13 February, 2001, Grimes pledged to re-open talks with the mining giant Inco Ltd. about the development of northern Labrador's massive nickel deposits. Talks had stalled in 2000, when Brian Tobin insisted that the ore had to be refined in the province. Grimes made it clear that he would let Inco ship out some nickel ore, so long as it reimbursed the province in other ways.
Before he could settle Voisey's Bay, however, another challenge appeared. Contract talks with two of the province's largest public sector unions, the Newfoundland Association of Public Employees (NAPE) and the Canadian Union of Public Employees (CUPE), reached deadlock on March 31, 2001. After years of wage freezes and layoffs, the unions demanded that their members receive a 15 per cent raise over three years. The province held firm at 13 per cent.
The next day, the public sector ground to a near halt after about 19,000 workers went on strike. Roughly half were in the health-care sector, while the remainder included road maintenance crews, ferry operators, and clerical workers. Some coastal communities experienced food and fuel shortages when a severe blizzard hit most parts of the island. With no one to clear snow-choked roads, inhabitants were cut off from medical care and other services.
Radio call-in shows were flooded with angry callers demanding government action. Grimes considered back-to-work legislation and the declaration of a state of emergency, but in the end his government agreed to the unions' demands. The deal cost the province $36 million in the first year alone, raising its projected deficit to $66 million.
The government enjoyed greater success in other areas. Grimes fulfilled his promise to make government more transparent and accountable by televising proceedings of the legislature, and by reinstating the office of citizen's representative (formerly known as the ombudsman), abolished by the Wells administration. His government also appointed a child and youth advocate and introduced the regulation of fuel prices.
Important advances were made in the mining and energy sector. On 19 December 2001, the province approved Husky Oil's $2.3-billion plan to develop the White Rose offshore oil project. The company gave the project the green light on 28 March, 2002, and soon began awarding construction contracts to local firms. The development was expected to create more than 1,000 jobs during its 10- to 15- year life and pay the province $500 million in royalties.
Negotiations between the province and Inco ended in a deal announced on 11 June, 2002 - six years after talks began. It was predicted that the project would contribute $11 billion to the provincial economy over a 30-year lifespan. The construction phase was expected to create about 3,000 jobs and the operation phase between 400 and 800.
The project encompassed a mine and concentrator at Voisey's Bay, and a demonstration plant at Argentia to test hydrometallurgy - a new technology that was more affordable and environmentally friendly than traditional smelting because it used water, oxygen, and other materials to dissolve precious metals from raw ore. Until the Argentia plant was operational, Grimes agreed that Inco could ship ore elsewhere for processing, on the condition that it later return an equivalent amount of nickel concentrate to the province.
In August 2002, Grimes and the Quebec Premier, Bernard Landry, announced an agreement in principle to develop the Lower Churchill River's hydroelectric potential. The deal disintegrated as a result of sharp criticism from the Conservative Opposition and high-ranking officials in Newfoundland and Labrador Hydro. Conservative Leader Danny Williams raised the spectre of the notorious 1969 Upper Churchill deal, predicting that the province would receive a paltry $1 billion from the proposed arrangement compared with Quebec's $56 billion. Hydro Chairman Dean MacDonald resigned, as did another board member, Mark Dobbin. The mayor of Happy Valley-Goose Bay, John Hickey, also voiced opposition. In December the talks were suspended.
On 24 April 2003, the federal government imposed a moratorium on the cod fishery in the Gulf of St. Lawrence. Grimes opposed the decision and unsuccessfully demanded the island's west-coast fishery be opened at half the 2001 quota. He fought for greater control over fisheries management through the establishment of a federal-provincial fishery board, but could not generate enough support from other premiers to bring about the change and the fisheries remained under federal jurisdiction.
Newfoundland and Labrador was by then topping the country in economic growth, due in large part to its oil and nickel developments, but was also one of the most indebted provinces in Canada. Successive deficits had pushed the debt up to $10.2 billion by March 2003 and the Progressive Conservatives attacked the Grimes administration for weak fiscal management.
Under the strong new leadership of millionaire lawyer and businessman Danny Williams, the Conservatives' popularity had steadily increased. In contrast, Grimes failed to mend rifts created in the 2001 leadership convention and had to deal with sagging public support and internal strife. Since 1999, the Liberals had lost five of seven by-elections, and the Tories gained a sixth seat in 2001 when Liberal MHA Ross Wiseman crossed the floor. On 14 February 2003, cabinet ministers Kevin Aylward, Lloyd Matthews, Sandra Kelly, and Ernest McLean jointly announced that they would not run in the next election. By then, the Liberals held 27 seats in the legislature, the Conservatives 19, and the New Democrats two.
Grimes called an election for 21 October, 2003, but failed to generate much voter support in what many criticized as a lackluster campaign. After 15 years in power the Liberals were demoted to Opposition status with only 12 seats, including Grimes's Exploits riding. The Conservatives received a sound majority, winning 34 of 48 seats; two seats went to the New Democrats. Grimes remained Liberal leader until his retirement on 30 May 2005.