The Tobin Government, 1996-2000
Brian Tobin replaced Clyde Wells as premier and leader of the Newfoundland Liberals on 26 January, 1996. He inherited an economy that was still struggling, but positioned to grow from emerging oil and mining industries. Tobin strove to attract new investors to the province by cutting payroll taxes and simplifying royalty regimes for future oil developments. Tourism also expanded, while the shellfishery helped offset losses from the cod moratorium. However, negotiations to develop hydroelectricity on the Lower Churchill River and lucrative nickel deposits in Voisey's Bay - both in Labrador - failed to produce immediate results.
Social reform and funding for the arts were also on the agenda. After holding two referendums and amending the constitution, the province replaced the denominational school system with a secular one in 1998. It again sought constitutional change in 1999 to formally change the province's name to Newfoundland and Labrador, which took effect in 2001. Plans to build The Rooms, a $40-million complex to house the provincial art gallery, archives, and museum, were also supported by the Tobin administration.
From Federal to Provincial Politics
Tobin was a successful federal politician when he resigned as fisheries minister in Jean Chrétien's Liberal cabinet in January 1996 in order to become the premier of Newfoundland. In 1995, he had earned widespread praise and the nickname "Captain Canada" for ordering the seizure of the Estai, a Spanish trawler that was illegally catching undersized turbot on the Grand Banks. His popularity was strengthened later that year, when he campaigned against Quebec's separatist movement. He conceived of and helped organize an influential unity rally in downtown Montreal on 27 October, 1995 - three days before a provincial referendum on whether to leave Canada. Attended by more than 100,000 people, the rally is credited with contributing to a slim victory for the federalist side.
Tobin decided to enter provincial politics on 8 January,1996, about a week after Liberal Premier Clyde Wells announced his retirement. The national press speculated that the premiership would boost Tobin's future chances of becoming prime minister. Tobin himself stated he was more interested in developing Newfoundland's emerging oil and mining industries. His popularity paved the way to the premier's office. He was acclaimed as Liberal leader on 17 January, 1996, and was sworn in as premier nine days later. In a general election on 22 February, 1996, the Liberals won 37 of the House of Assembly's 48 seats, up from 35 in the previous election on 3 May, 1993.
After years of harsh budgets and fiscal restraint, the governing Liberals assumed a more optimistic tone under Tobin's leadership. Pragmatic, bold, and charismatic, he campaigned under the slogan 'A Better Tomorrow' and pointed to industrial developments that promised future wealth. Yet he reminded voters that their better tomorrow was still two years away.
Work had almost ended on building the Hibernia oil-production platform, which reduced the number of construction jobs from a peak of 5,800 in 1995 to about 1,000 in 1996. First oil was still a year away from being pumped and deals had not yet been reached to develop other offshore oil deposits or the massive nickel deposit at Voisey's Bay. Unemployment remained high in the wake of the cod moratorium and compensation packages for out-of-work fishers were beginning to run out.
Federal funding for education, health care, and other social services traditionally accounted for almost half of the provincial budget, but Ottawa had entered a period of fiscal restraint and reduced the amount of money it gave to the provinces. Newfoundland forecasted it would receive $45 million less form the federal government in 1996-97 than it did in 1995-96. By the time Tobin took power, the province had an $8-billion debt and was projecting a $290-million deficit for the 1996-97 fiscal year.
The first two years of Tobin's premiership were largely devoted to cutting costs and stimulating offshore oil development. The 1996 budget eliminated approximately 1,000 public sector jobs , introduced a surtax on personal incomes over $60,000, and increased fees for a variety of government services, including marriage licences, drivers' permits, and birth certificates. The budget was criticized by union leaders, but it reduced the projected deficit to $44.8 million.
The following year brought more cuts. In its 1997 budget, the province dismantled 20 government agencies and increased fees by another $17 million. It announced that approximately 1,100 government workers would be laid off over a three-year period, but added that almost all affected civil servants were eligible for retirement. Tobin promised this was the last round of layoffs and predicted a surplus by the year 2000.
Economic Bright Spots
The government tried to lessen its dependence on federal funds by stimulating local industry and business. Offshore oil topped the agenda. On 5 August, 1996, the province reached an agreement with Petro-Canada to develop the Terra Nova field. Tobin predicted the project would produce oil in 2001 and contribute approximately $1.5 billion in royalties and corporate taxes to the provincial economy during its 15- to 18-year lifespan.
The province tried to attract other oil developers by unveiling a generic royalty regime in 1996. The arrangement was attractive to investors because it simplified negotiations between industry and government, and made it easier to calculate production costs. In December, 1996, a consortium of petroleum companies led by Husky Oil announced plans to develop a third field, known as White Rose.
Tourism also flourished. In 1997, the province celebrated the 500th anniversary of John Cabot's arrival in North America. Festivities included plays, concerts, conferences, and a visit from Queen Elizabeth, but its centerpiece was the voyage from Bristol, England, to Bonavista, Newfoundland, by a replica of Cabot's ship, the Matthew. First Nations leaders criticized the celebrations for ignoring the European impact on indigenous peoples, but the year was a financial success for the tourism sector. The province estimated that 69,000 visitors came to the province and injected $51 million into the local economy. It also touted the event as providing a springboard for future tourism initiatives, including the 50th anniversary of Confederation in 1999 and the Viking Millennium in 2000.
Education reform was an important issue during Tobin's first term in office. Efforts to replace the province's denominational education system with a single unified public system had been set in motion by the Wells administration. Under the denominational system, Christian churches had the right to own and operate schools using public money. Critics argued that the system was needlessly expensive, and discriminated against residents who did not belong to one of the recognized denominations.
A majority of voters (54.4 per cent) had supported the change in a provincial referendum on 5 September, 1995, but in 1997 the Roman Catholic Church, the Pentecostal Assemblies and a group of parents successfully challenged the re-designation process in the Supreme Court of Newfoundland. Justice Leo Barry ruled on 8 July, 1997, that the province did not have the right to close denominational schools without consent from the denominations.
Tobin strongly supported a non-denominational system which, it was estimated, would save the province approximately $30 million a year. The government therefore held a second referendum on 2 September, 1997, in which 73 per cent of all voters supported the change. The federal government then amended Term 17 of the Terms of Union, giving the provincial legislature exclusive authority over education. The Roman Catholic Church lost its court challenges to the new system, and the non-denominational system came into effect at the start of the 1998-99 school year.
On 18 January, 1999, Tobin announced that a general election would be held on 9 February, just three years into his term as premier. It was widely believed at the time that Prime Minister Jean Chrétien was nearing retirement and critics suggested Tobin had called an early election to strengthen his chances of becoming the next leader of the federal Liberals. Tobin countered that he needed a renewed mandate to reinforce his bargaining position with the nickel giant Inco Ltd., which now owned the Voisey's Bay deposit. The election gave the Liberals a second but reduced majority. The Progressive Conservatives won 14 seats, and the New Democrats, two.
Despite Tobin's renewed mandate, he failed to secure a deal on Voisey's Bay. After nickel prices unexpectedly collapsed in 1998, Inco decided it would no longer be profitable to build the $1.5-billion smelter and refinery in Newfoundland it had proposed in 1997. Tobin, however, was unbending in his demand that all ore mined from Labrador should be processed in the province. Talks broke off in January 2000 and did not resume during his premiership. Later that year, negotiations with Quebec to develop the Lower Churchill River's hydroelectric potential ended in failure, after a deregulation of American energy markets made the project much less profitable than initial forecasts predicted.
By then, however, the provincial economy was emerging from the recession of the 1990s, due in large part to rising revenues from oil production and a burgeoning shellfishery. The 1998-99 fiscal year saw Newfoundland lead the country in economic growth and declare its second surplus ($136.9 million) since Confederation (the first was in 1995).
A sign of the economic good times was the government's announcement in February 2000 that it would build a $40-million complex to house the provincial museum, art gallery, and archives. The existing gallery was so dilapidated that the National Gallery of Canada would not display its works there. The buildings that housed the archives and museum were in similar states of disrepair. The new complex, known as The Rooms, was scheduled to open in 2003.
A Return to Federal Politics
But by then Tobin was no longer premier. On 16 October 2000, and just 20 months into his second term, Tobin announced he was returning to federal politics. Deputy Premier Beaton Tulk replaced him on an interim basis until a leadership convention in February, 2001. Chrétien appointed Tobin industry minister on 17 October, 2000, and six days later announced a snap election for 27 November, 2000.
The prime minister had asked Tobin to return to Ottawa to boost the federal Liberals' poor standing in Atlantic Canada, and Tobin's popularity assured him a victory in the riding of Bonavista-Trinity-Conception. The press suggested that Tobin was positioning himself to become Chrétien's successor, but he told reporters he hoped to restructure the equalization formula so that more money stayed in Atlantic Canada.
Tobin's abrupt resignation as premier caused problems for the provincial Liberals. In the coming years, the party's popularity steadily dropped as that of the Progressive Conservatives rose. A 2003 general election returned a strong Tory majority to the legislature, ending 15 years of Liberal government.
On 14 January 2002, Tobin unexpectedly announced he was leaving politics altogether. By then, it was widely believed that Finance Minister Paul Martin would succeed Chrétien and the press speculated this was the reason behind Tobin's announcement. Tobin, however, insisted he was resigning for personal reasons. First elected to Parliament in 1980, the 47 year old had spent 22 consecutive years in politics. "I wanted to spend more time with my family," he later wrote in his autobiography. "I had spent much of my adult life in politics and I needed a new perspective" (255). Since 2002, Tobin has worked with the Vancouver-based think tank the Fraser Institute and as a senior business advisor with the law firm Fraser Milner Casgrain.