True Patriot Love - August 17, 2026


Can Newfoundland Turn Hydro Wealth Into Prosperity？ ft. Dr. Wade Locke


Episode Stats


Length

39 minutes

Words per minute

177.75

Word count

6,942

Sentence count

326


Transcript

Transcript generated with Whisper (turbo).
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00:00:34.100 Well, the East Coast tour continues, and I'm lucky enough today to have Dr. Wade Locke.
00:00:39.820 And I'm going to call you Wade, I think, if that's okay.
00:00:42.420 Perfect.
00:00:42.960 Okay.
00:00:43.600 So, and, you know, I'm going to toot your horn for a minute, because, you know, I think it's important for the viewers to sort of understand, you know, who you are across the nation.
00:00:54.160 You're a PhD in economics.
00:00:56.280 Yes.
00:00:56.800 Yes.
00:00:57.080 And basically, you received many scholarships along the years, and you ended up teaching
00:01:04.860 at the Memorial University.
00:01:06.960 Yes.
00:01:07.960 Yeah.
00:01:08.960 And you headed up the Department of Economics.
00:01:10.760 I did.
00:01:11.760 Now you started out, help me a little bit, you started out in biology when you started
00:01:15.660 school, so you had a keen interest in biology at some point?
00:01:18.760 I did.
00:01:19.760 I did biology, and then when I finished biology, my biology degree, a lot of young people had
00:01:27.480 come into the biological sector because of the 200-mile limit, and there wasn't a lot
00:01:34.140 of jobs available, even with a master's in science at that point in time.
00:01:39.300 So I said, well, I'm going to see what can combine with biology.
00:01:42.500 Fisher and economics was an obvious one.
00:01:44.780 Environmental engineering was another one.
00:01:47.240 and some kind of business and biology of some type or another.
00:01:53.240 And I did some economics courses, and I did well in them, and I liked them.
00:01:59.520 It was surprisingly that I did like them, but I did like them.
00:02:03.440 And then from there on in, I just finished my BA and my master's and my PhD in economics.
00:02:11.100 Good for you.
00:02:11.880 And you and I have something in common there, right?
00:02:13.480 Because I'm a CPA.
00:02:14.960 Yes.
00:02:15.180 I trade.
00:02:15.720 I started off, I got my BCom, and I minored in econometrics.
00:02:21.520 Oh, did you?
00:02:22.100 Oh, yeah, I love economics, so too, like you.
00:02:25.280 And the only reason I ended up becoming an accountant was my mother.
00:02:29.380 My mother wanted me to be an accountant, and she kept signing up to companies for me to enjoy.
00:02:35.000 So I ended up going that way, but, you know.
00:02:37.460 What happened for me was that the head of the department of economics suggested I meet somebody from McMaster.
00:02:44.360 Oh.
00:02:44.720 who was coming down recruiting people yeah and he said well we pay people to go to school and i
00:02:49.260 thought what a novel idea they pay you to go to school it was a scholarships but uh so i thought
00:02:55.160 well that would be an interesting thing and we went there and uh never looked back since yeah
00:02:59.060 beautiful university for those of you who've never been there you know uh mcmaster yeah so i grew up
00:03:05.180 my dad my dad uh drove a truck and quite frankly he had trucks so uh we used to go back and forth
00:03:11.480 in and out of McMaster
00:03:13.060 on deliveries all the time
00:03:14.380 and we had a yard close by
00:03:16.160 where we stored trucks
00:03:17.120 and it's pretty cool.
00:03:18.820 So, yeah,
00:03:19.360 I know that area really well
00:03:21.120 and a great place
00:03:23.080 to go to university.
00:03:24.380 That was a great experience
00:03:25.100 for me.
00:03:25.400 I learned a lot.
00:03:26.220 Yeah.
00:03:26.660 And where are you
00:03:27.120 originally from?
00:03:28.460 I'm from a mining town
00:03:29.360 in the center of Newfoundland
00:03:30.660 called Buckins.
00:03:31.580 Okay.
00:03:32.640 And, you know,
00:03:34.080 getting a job back here
00:03:34.980 at Memorial,
00:03:35.680 I thought was a great thing.
00:03:36.680 I thought, well,
00:03:37.580 how lucky am I?
00:03:38.520 Yeah, yeah.
00:03:39.620 And a good experience, right?
00:03:40.940 So you left, went away, learned a lot, and then came back, and then you got to apply what you learned here.
00:03:46.940 I did, yeah.
00:03:47.960 And now, you know, now it's looking, you know, your primary focus, you know, at the end of your career now has been kind of petro-economics and public finance, I guess, really.
00:04:00.600 Really, public finance, yeah, and energy economics, yeah.
00:04:04.440 Yeah.
00:04:05.000 Well, and it's all about, I guess, Wade, you know, I was thinking about it coming into today.
00:04:08.760 And to me, it's kind of like a ball of wax where the province is right now.
00:04:13.300 You know, as we started the show, you know, we started talking about debt.
00:04:17.520 And to me, it's kind of trying to figure out the, as Newfoundland and Labrador try to figure out, you know, the go forward path.
00:04:26.880 It's really trying to find how to capitalize on, you know, the oil and gas reserves and the mineral reserves.
00:04:33.000 Because it is rich, right?
00:04:34.420 It's rich.
00:04:35.220 It's isolated, but it is very rich, right?
00:04:37.200 we have quite a few resources in for capital terms and uh yeah yeah we're quite affluent in
00:04:42.980 that respect yeah and it's in you know debt wise you know we were as we started the show you know
00:04:48.100 i think it's last year was like 688 million dollars in debt right and for newfoundland yeah
00:04:54.640 uh last year we uh had uh 20 this past budget yeah it was over 20 point 20.6 or something
00:05:03.880 billion? Oh, in total, yeah, in total net debt. Net debt. Yeah, yeah. It's a lot, right?
00:05:08.940 And for capital terms, we're the highest in the country. We're the highest in the country
00:05:12.960 in terms of debt servicing. We're the highest in the country in terms of cost of debt. So
00:05:19.780 all of those things are negative. And that's been built up over a number of years. Ever
00:05:25.460 since we joined the Confederation, during the war years, Newfoundland did well because
00:05:29.240 the strategic position and basis that we're here.
00:05:32.900 Right.
00:05:33.260 So lots of employment during the war years.
00:05:34.800 And there's a big demand for our goods and services at that point in time as well.
00:05:39.260 But when we joined Confederation, and we're ahead of 71st anniversary recently,
00:05:44.820 there was a deficit for every year except for about 10.
00:05:50.660 And six of those were because of oil came on faster than they could spend it.
00:05:55.560 And four were basically federal government transfers to the province that made the difference.
00:06:02.140 Okay.
00:06:03.340 Well, and so now, you know, with Laura Churchill coming and some really good news, hopefully tomorrow, right?
00:06:10.400 Hopefully you start to see the tide turn, right?
00:06:12.920 Because, you know, every time, I've been coming here for about 18 years.
00:06:16.600 You know, every year I have a couple of good friends here.
00:06:19.180 I come down, I spend time with them, you know, and, you know,
00:06:23.200 we just enjoy they come up to toronto they stay at our house and we go back and forth and i always
00:06:28.800 think to myself when i come here i think the opportunities right you know between the atlantic
00:06:33.680 ocean between the offshore drilling between all the minerals um you know and now you know all of
00:06:40.320 a sudden the hydroelectric deal this hydroelectric deal has kind of been uh uh like it's like been a
00:06:46.720 little bit of a lead weight around the province's neck for a long time because it was signed in
00:06:51.520 1969, and it basically was underwhelming, I guess to say, right?
00:06:56.980 It froze nominal prices at a very, very low level, and after that, the OPEC crisis started,
00:07:04.540 and prices of energy went up significantly, and the province wasn't in a position to take
00:07:09.520 advantage of that because of the contract, and people have a resentment about that somehow
00:07:16.340 they were treated unfairly because of the nature of the contract and in the new
00:07:21.080 contracts that they're trying to negotiate now with Quebec they're hoping
00:07:24.260 to resolve some of those issues in terms of a fairer treatment of resources in
00:07:30.140 terms of crisis right and you know the the MOU came out right we got a little
00:07:36.080 bit of a glimpse tomorrow we're gonna get I guess a full set I think you know
00:07:39.720 you had some comments I read through your bio and things coming into it they
00:07:44.000 They called it Dr. Locke's litmus test, I guess, let's call it, right?
00:07:49.900 And, you know, one of the key issues at that point was cost overruns, right?
00:07:55.640 You basically said, you know, listen, the province can't bear the brunt of the cost overruns.
00:08:01.840 Right.
00:08:02.080 Yeah, and I think the second one really was debt, right?
00:08:08.260 How much debt you'd have to assume as a province, which is about $18 billion.
00:08:12.240 That was on the original, not the original, but the most recent MOU, yes.
00:08:17.800 Yes.
00:08:18.380 So it's a lot of debt to absorb for, you know,
00:08:22.160 considering the net debt to the province right now is about $20 billion.
00:08:26.000 That's correct.
00:08:26.360 And then you'd have to take a capital kind of debt of about $18 more billion.
00:08:31.040 That's a tough nut to crack if you can't figure out how to cover it, right?
00:08:35.560 If the prices are not what you expect them to be,
00:08:37.560 if they're lower than you expect them to be,
00:08:39.260 then carrying that additional debt would be a significant problem for the province.
00:08:44.220 Yeah, which quite frankly, it'll create some jobs, which is great.
00:08:48.980 There'll be some spinoffs, but that much debt would be hard.
00:08:52.300 It'd be almost overwhelming at that point.
00:08:55.180 That's why it's important that they've got the deal correct this time.
00:08:59.120 Yeah.
00:08:59.980 If they have the deal correct, then what'll happen is that the value of the asset
00:09:03.520 and the value of the debt will match each other off,
00:09:06.520 and there will be no real big net debt increase.
00:09:09.340 But if the revenue they're expecting from the projects
00:09:12.380 turns out to be less than what they're expecting,
00:09:16.940 that can create a big problem for you in terms of debt, yes.
00:09:20.200 Well, and it's interesting because they were kind of giving it some valuations,
00:09:23.840 which I thought was really interesting.
00:09:25.720 And I was kind of surprised.
00:09:28.600 Well, not surprised, but I was like, wow, that's a huge number.
00:09:31.020 So they're kind of pushing the number out there that the value is about $225 billion.
00:09:36.520 right so I guess that's over you know I didn't really get where the I think it's over 50 years
00:09:41.580 is that 50 years yeah and so that'd be kind of a 30-fold benefit from what the existing
00:09:47.620 deal is yeah if they roughly that's the numbers are throwing out and they were saying that you
00:09:53.560 know it would it would right now the province produces about 5,000 megawatts of power right
00:10:02.920 Okay. So that's kind of where they're at. So I was trying to get, I was trying to get my head
00:10:06.960 around. Okay. So if they're going to increase that substantially, uh, then that's going to go
00:10:12.920 up, uh, multiple times, you know, it's a 30 fold. That's a, that's a lot of power. Like that's a
00:10:20.340 lot of power considering, and you might, you probably know this better than me. I always
00:10:23.760 kind of use it as a benchmark in my mind between 500 to a thousand megawatts, uh, for roughly a
00:10:32.000 thousand homes so each megawatt is about a thousand homes right okay that's roughly kind of how i
00:10:38.640 and the the power that they'll be producing will we will go through quebec yes it will a lot of
00:10:44.240 it will go to quebec yeah some of it will be used in mining activities in labrador
00:10:49.520 very little bit will come for domestic consumption here in the province because we don't have the
00:10:55.440 in-feed capacity
00:10:57.860 in terms of transmission capacity.
00:11:00.240 Okay.
00:11:00.860 So it is unlikely that much of it will go here.
00:11:04.120 It's likely that some of it
00:11:05.760 will facilitate mining activity in Labrador,
00:11:08.660 new mining activity.
00:11:10.020 Okay.
00:11:11.620 And the province will get a substantial amount of revenue.
00:11:15.640 I think the previous estimate was about $34 billion
00:11:18.320 in net present value terms.
00:11:20.560 So it was a significant number.
00:11:22.700 Yeah.
00:11:22.900 And $2 billion to $3 billion on an average basis over that 30-year period was the kind of numbers you were thinking about at that point in time.
00:11:31.640 Okay.
00:11:32.220 So the good news is potentially this could offset the net debt.
00:11:37.320 This could be a game-changer for the profits for a minute.
00:11:41.020 What we've said in recent publications is that it's potentially transformative.
00:11:45.920 Yes.
00:11:47.060 And what you hope is that when you get the money, you do something more productive with it than simply spend it.
00:11:52.900 whatever is politically feasible at the time so you know it's interesting we're
00:11:57.880 we're you know when we do these East Coast trips we sort of last time we
00:12:03.380 started in Toronto and we came all the way here and we hit Halifax Montreal we
00:12:09.460 hit the whole straight round we stopped in the cities the interviews with from
00:12:13.400 fashion designers to historians it was really a good trip we really enjoyed it
00:12:17.740 and this time we're starting here and going the other way we're picking up our
00:12:21.660 car we can't we couldn't get across on the ferry the ferry is fully booked so we had to kind of
00:12:27.460 leave our car in halifax fly over we wanted to do meet you and a few other people and um you know
00:12:35.340 transportation you know one of the key issues right now is we're you know as we come in we're
00:12:40.540 seeing it like at some point is the province you know and hopefully when uh the hydroelectric issue
00:12:46.560 and uh the lower churchill gets resolved maybe that's something that the province needs to sort
00:12:51.340 focus on is okay how do i get more people to come here how do i get more people you know because
00:12:56.820 it's expensive right like flights transportation getting here is uh is is challenging even booking
00:13:04.080 a rental cars are difficult at times yes so you would think it would be easy to do but it's not
00:13:09.020 not easy at all no that's why you need to book one advance if we didn't have friends here we'd
00:13:13.560 be in trouble right yes because we so so tourism certainly in the summertime is uh makes me not
00:13:21.020 quite popular it's somewhat different than large parts of Canada from a
00:13:25.820 historical perspective as well as from a cultural perspective and people do want
00:13:31.040 to come and see some of the natural and natural environments that are here oh
00:13:35.720 yeah it's beautiful and it is nice the weather can be a little more cooperative
00:13:40.940 at times yeah yeah but but you know it's all part part of the experience yeah
00:13:45.680 yeah we've been well watching you know yeah so the whole thing we came and you
00:13:50.840 know on our trips here because this is our second trip around so okay tomorrow has let's kind of
00:13:56.960 crystal ball for me you and i because i'm kind of curious tomorrow happens my guess is they've
00:14:02.040 worked out some of the kinks from the mou so because the mou was kind of lukewarm i thought
00:14:07.380 it was interesting a little bit because the announcement seems to be coming out of quebec
00:14:11.400 into you know newfoundland labrador um so and then i think we're going to see uh even the prime
00:14:19.220 ministers show up tomorrow yeah to talk about this this deal and the great
00:14:23.960 things and the benefits right well they increase the amount of productive
00:14:28.280 capacity and one of the things and what you hear in the media I haven't seen the
00:14:33.960 agreement so we'll know that tomorrow I guess yeah when you look at the look at
00:14:40.080 the things in the media it looks like they're able to export power through
00:14:45.320 Quebec to New England or wherever they export to Ontario or whatever those places are available
00:14:52.680 to them. That will make a difference in terms of the revenue they get. Right. It'll be tied,
00:14:57.640 that'll be tied to market values and that'll be important for them. Yeah. So, you know, you've,
00:15:04.920 you know, you've been studying the economics of energy. Yes. For a long time. So, I find this
00:15:11.080 interesting because we're we're going to montreal and on the way back we're going to hit um a power
00:15:16.140 hydroelectric power plant um it's the one that 40 minutes outside of uh the downtown montreal
00:15:23.960 the name escapes me but it's it's the second biggest one there's six big uh hydroelectric
00:15:30.340 power plants kind of like i call it do a smile around quebec yeah the ones i can think of um
00:15:36.820 Our next trip, I want to get up to James Bay and actually do the tour of that one.
00:15:41.140 I've never been, so I'd love to see it because I hear it's phenomenal.
00:15:45.680 So the power comes, you know, so the power, help me out a little,
00:15:48.940 because the power is going to, as you mentioned, is going to be transmitted from here.
00:15:52.660 Yes.
00:15:53.020 Right?
00:15:53.260 It's going to go up into Quebec,
00:15:56.480 and then they're going to figure out where they're going to distribute across Canada into the U.S.
00:16:00.460 What's the?
00:16:01.540 Well, we have a certain, we're entitled, Newfoundland is entitled to a certain amount of power.
00:16:06.180 Yes.
00:16:06.820 And I understand that's gone up from the MOU.
00:16:10.500 And the biggest issue in the previous MOU was that if Newfoundland couldn't use the power, Quebec would buy it.
00:16:19.580 Okay.
00:16:19.700 So there wasn't an opportunity to export it through Quebec to New England or New York or Vermont or wherever they go to.
00:16:28.720 So they can sell it independently, like sell it to a third party.
00:16:32.120 Yeah, that's my understanding of one of the positive things that come out of the new agreement.
00:16:36.420 Oh, good.
00:16:37.000 Okay.
00:16:37.260 We'll see that.
00:16:38.220 Yeah, yeah.
00:16:38.620 But that's one of the things they talked about, or they've talked about.
00:16:42.060 Good.
00:16:42.460 I think the price is more or less the same as it was before.
00:16:46.120 Yes.
00:16:46.560 And they're going to get some additional renewable energy as part of this deal.
00:16:52.720 And I think Muscat Falls will be used for additional power as well.
00:16:57.180 I heard that.
00:16:58.380 All those things are good things for the people that are living here and good things for people in Quebec as well.
00:17:03.060 because Quebec's been adversely affected by the drought
00:17:07.600 in terms of their ability to produce their own electricity
00:17:09.420 and meet their commitments to other places like New England
00:17:13.540 or wherever they export to as well.
00:17:16.180 So this is good for Quebec and it's good for Newfoundland as well.
00:17:19.880 Yeah, I really do think it is.
00:17:21.500 You know, it's interesting because I always marvel at, you know,
00:17:26.440 in 1970, and this is in Quebec,
00:17:29.500 how someone had the foresight to actually spend that $1.7 billion
00:17:35.480 to start building those hydroelectric, you know, plants.
00:17:39.640 And I think to myself, wow, back then, you know,
00:17:42.020 the actual foresight to do that is pretty cool if you think about it.
00:17:48.700 There's a lot of very smart strategic thinkers in Hydro-Quebec.
00:17:55.400 Yes.
00:17:55.620 And every decision you see them being made seems to be a very positive decision that they made in terms of their own well-being.
00:18:08.840 Yeah.
00:18:09.460 Yeah, they were like here, right?
00:18:11.280 Like they really thought it through, the foresight with which they did it.
00:18:15.720 Because, you know, the reception at that point couldn't have been good, right?
00:18:18.600 is, you know, to go raise $1.7 billion on the marketplace
00:18:23.280 to tell people you're going to do hydroelectric power.
00:18:27.840 Yes.
00:18:28.940 Must have been a little bit eye-catching, right, in those days.
00:18:32.020 I imagine there was a lot of surprise-making, yes.
00:18:34.760 Yeah.
00:18:35.860 Yes.
00:18:36.820 Yeah, but it's interesting how it's turned out.
00:18:39.440 I'm hoping, quite frankly, the positive results, again, you know, for here.
00:18:45.440 Oh, I think if things are transparent, as people are suggesting now in the media,
00:18:50.700 then yes, it will be very positive for here.
00:18:53.380 It will be another positive component of the province.
00:18:57.140 We have other energies as well in terms of offshore oil and gas.
00:19:00.700 We have plenty of natural gas, but no real market for it at this point in time.
00:19:06.220 Yeah, it's a shame.
00:19:07.160 But that can be developed as well over time.
00:19:11.320 We have mineral resources that are positive.
00:19:14.640 and technology seems to be doing quite well here as well yeah so and and uh norway's here now so
00:19:20.860 equinor is here they're just on the street here yeah yeah so equinor i do quite a few shows on
00:19:25.840 equinor and i and norway and the the 1980 decision to actually leave petro canada and go
00:19:33.440 and the the actual i call it the canadian divide where we made one decision to go left and
00:19:39.920 Norway went right
00:19:41.560 basically and created this
00:19:43.580 magnificent wealth fund
00:19:45.020 that now changes
00:19:47.960 the direction of even the
00:19:49.740 United States from an investment perspective.
00:19:52.120 That's why when we talked about
00:19:53.480 hydro being a potentially
00:19:55.720 transformative, that's what we mean.
00:19:57.400 The issue comes down to that
00:19:59.060 it is easy to spend
00:20:01.920 money when you have new money coming in
00:20:04.020 and
00:20:05.240 what happens is that your
00:20:07.620 expenditure
00:20:08.100 wants
00:20:10.140 tend to
00:20:11.760 increase
00:20:12.200 with your
00:20:12.880 revenue
00:20:13.620 capability
00:20:14.100 and then
00:20:15.380 if the
00:20:15.540 revenue
00:20:15.760 capability
00:20:16.300 doesn't
00:20:16.620 keep up
00:20:17.300 your
00:20:18.360 expenditure
00:20:18.640 wants
00:20:18.940 don't
00:20:19.200 fall
00:20:19.400 there
00:20:19.700 and that's
00:20:21.060 how you
00:20:21.220 get yourself
00:20:21.560 in trouble
00:20:21.980 in terms
00:20:22.460 of debt
00:20:22.860 so
00:20:24.400 this
00:20:26.860 additional
00:20:27.340 revenue
00:20:27.660 from the
00:20:28.280 deal
00:20:29.160 has the
00:20:30.640 potential
00:20:31.000 to allow
00:20:32.500 Newfoundland
00:20:32.940 to become
00:20:33.740 a much
00:20:34.040 more prosperous
00:20:34.660 province
00:20:35.140 than it
00:20:35.360 has been
00:20:35.700 recently
00:20:36.400 and also
00:20:37.960 productivity you know you think about it i was i was talking to a friend of mine last night over
00:20:42.200 dinner and i said you know what this deal gets done quite frankly a lot of people and you've
00:20:48.060 been through you you've seen it you live here i'm not telling you something you don't know but
00:20:51.660 you know back i'd say you know from a decade ago i used to get on a plane and i used to meet
00:20:58.620 lots of people from atlantic canada who are going west yes and i used to young people right and i
00:21:04.000 used to think to myself okay there you know they so and they'd be like no i'm going out to the oil
00:21:08.200 fields yep you know and i'll when i make enough money or come back and buy a house yeah exactly
00:21:13.280 right and they used to go work hard and they used to come back and and i always you know i'm always
00:21:17.860 amazed at the skill sets of people from atlantic canada and i think it has to do with and i i did
00:21:25.500 this show in pei where i said the resilience of the people is the amazing part to me because
00:21:31.220 they know how to kind of they've learned how to live off the land they've learned to work with
00:21:36.100 their hands work with their brains be mechanically inclined and also be technically inclined again i
00:21:42.440 think that's a really uh in this environment in today's environment i think that's really cool
00:21:47.060 right it's always going to be important because no matter how important ai is yes you're still
00:21:51.460 going to need someone to turn your bolts or yeah screw your screws and the intuition to make that
00:21:57.180 decision whether it's a quarter more turn or a half more turn right yeah yeah and so but you know
00:22:02.980 i look at it now and i think to myself the cool part about i think this decision is now those
00:22:06.960 people hopefully don't need to go west they can actually start to come back and you know um now
00:22:13.220 where are they going to live and it's interesting because i was looking at the city on the flight in
00:22:18.140 and i'm saying to myself you know where is the city going to grow because now you know you're
00:22:24.240 You're kind of, you're at that bulging point a little bit, right?
00:22:28.300 Where?
00:22:29.100 You're seeing the housing market as well, right?
00:22:30.780 I mean, regular houses, if you put them on for $500,000, they're not unusual to be, you
00:22:38.640 know, $600,000 by the time it gets settled down.
00:22:41.080 Yeah.
00:22:42.160 It's a very hot housing market here.
00:22:45.200 Yeah.
00:22:45.960 And you're seeing offers like what's put down as the asking price is not the price that
00:22:52.640 prevails at the end of the day.
00:22:54.240 Yeah, yeah, the supply-demand chain, right?
00:22:56.400 So you've got a lot more demand than you have supply.
00:22:59.100 That's correct.
00:22:59.740 Less inventory needed to satisfy the market.
00:23:02.980 So then when this deal gets done, so the deal gets done tomorrow,
00:23:06.740 and they start ramping up to get going, where are people going to live?
00:23:12.260 So I was trying to figure that out.
00:23:13.540 I was trying to do that because, again, these are the economic challenges that you have, right?
00:23:18.940 So now you have to figure out, did I build my city planning?
00:23:23.160 Did I build my infrastructure big enough?
00:23:25.500 Do I have my power and my sewers?
00:23:28.720 So where do people go?
00:23:32.160 So when people are coming back home, so they...
00:23:34.140 What you'd like to see is even more pressure on the housing market in terms of prices and rental markets as well.
00:23:40.740 So that'll have implications for people in a low-income bracket as well,
00:23:45.620 because there won't be the space at an affordable rate.
00:23:49.360 Right.
00:23:49.640 even less of it now
00:23:53.200 but it'll get less
00:23:54.160 as more activity occurs
00:23:57.000 so you've got the oil and gas sector
00:23:59.200 going full steam
00:24:00.940 you've got energy going full steam
00:24:03.540 you've got
00:24:04.820 people who need
00:24:07.160 there are lots of construction
00:24:09.040 activity going on as well
00:24:10.300 and so there'll be lots of people coming back to that
00:24:12.620 the mining activity
00:24:14.320 such that
00:24:15.560 there's going to be a big demand for
00:24:18.560 people as well, both in the development
00:24:20.960 and operation of those mining activities.
00:24:23.400 So there's a number of those kind of things
00:24:24.940 and defense
00:24:26.020 spending
00:24:27.360 will have a big impact on
00:24:30.720 Labrador for sure.
00:24:32.880 It's interesting you say that because
00:24:34.420 that's the other thing.
00:24:36.240 When we travel through Atlantic
00:24:38.740 Canada, when we started our trip, the
00:24:40.700 first one we did, the amount of
00:24:42.740 defense spending we noticed from
00:24:44.840 Halifax all the way to here
00:24:46.620 was jaw-dropping.
00:24:49.440 Quite significant in Halifax, for sure.
00:24:51.420 Yeah, yeah.
00:24:51.840 And New Brunswick as well.
00:24:53.160 Yes.
00:24:54.480 And the airport airbase in Goose Bay
00:24:58.660 is getting a substantial increase
00:25:01.760 in infrastructure furniture
00:25:02.920 by the federal government
00:25:03.720 as part of their initiative
00:25:05.060 for northern defense.
00:25:07.220 So, again, these are more people needed
00:25:09.940 to do the construction,
00:25:12.240 upgrade the infrastructure.
00:25:14.520 Are you feeling so, you know,
00:25:16.060 and this is kind of it's not an economic indicator but it's kind of the do you notice it like you
00:25:22.120 know having you know lived in other places and you're back living here now but do you notice
00:25:29.340 people's attitude changing with what's happening now are you seeing the turn a little bit as
00:25:33.780 people I noticed that the reason I asked that is I went to Halifax when last trip we were in
00:25:39.920 and the premier I sent him a note and I said hey I said whatever you're doing I said
00:25:45.780 I got to tell you, people are happy here.
00:25:48.200 I don't know what's going on here.
00:25:49.580 I said, but, you know, good for you.
00:25:51.320 It's the spending or whatever you've done policy-wise.
00:25:54.020 I can notice it because I remember 15 years ago spending time on a project in Halifax,
00:26:00.320 and they weren't that happy.
00:26:02.020 People weren't smiling, and they weren't kind of, you know, all cheerful.
00:26:07.020 We are there now when we go through on this trip and previous trips.
00:26:10.800 They're pretty happy.
00:26:11.760 I'm like, wow.
00:26:11.960 I think when you go to your restaurants, you'll notice that kind of enthusiasm and that kind
00:26:17.640 of comfort, I guess, comfort, yeah, enthusiasm, and people seem to be happy, yeah.
00:26:24.420 Yeah.
00:26:24.920 And the thing about it now, what's going on now is that if you want a job, there's a job
00:26:30.600 available for you.
00:26:32.240 When you're talking about years ago when people used to go west, they still go west, but used
00:26:35.860 to go west.
00:26:36.780 Both my daughters are in Alberta as well, so I understand how that works.
00:26:41.600 Yeah.
00:26:41.960 but it wasn't an issue whether you'd go,
00:26:47.760 but when you'd go,
00:26:48.960 because the amount of jobs that were here locally
00:26:52.300 were mostly tied to government and fishing industry,
00:26:56.520 but they weren't great jobs,
00:26:58.460 and they weren't always available for the number of people that we had.
00:27:01.400 Yeah, but that's obviously hopefully going to be changing.
00:27:05.500 Yes, I think we can assume that it will change,
00:27:07.720 and you should expect to see an increase in population occurring again.
00:27:13.640 Well, you know, it's interesting, you know, the affordability and economic employment,
00:27:19.160 all those things that are happening across Canada right now.
00:27:21.820 Central Canada is slow.
00:27:23.520 Like, I think, you know, it's slowed down quite a bit.
00:27:25.820 The housing market is a debacle right now.
00:27:28.320 Yeah.
00:27:28.620 It's just a mess.
00:27:29.600 So, you know, the more you talk to people in Central Canada right now,
00:27:34.720 they're actually starting to look for options.
00:27:36.380 and when young people come to me because i have a couple businesses in central canada
00:27:40.740 so at my age i'm not going anywhere right now but uh and they come to me and they say what should we
00:27:46.800 do and i say move yeah move like you gotta you know unfortunate and they say well maybe i don't
00:27:52.500 want to move i like it here but i said but you know you have to you have to migrate to where
00:27:57.660 work you know you have to you have to do that you might want to come back at some point when
00:28:01.880 And things are level out here.
00:28:03.800 But, you know, you really have to look at going somewhere else.
00:28:06.820 And I think this is a great opportunity.
00:28:08.840 I really do.
00:28:10.280 Here he is.
00:28:11.380 Elbert is as well.
00:28:12.360 Elbert has done quite well.
00:28:13.820 Yeah.
00:28:14.200 Oh, yeah.
00:28:15.200 Mike, who's our partner in this company, he's actually just finished the West Coast Tour.
00:28:19.820 And he says the same thing.
00:28:20.880 He says, you know, the funny thing he says, he gets past, he gets out of Manitoba.
00:28:26.140 And he said, everyone's working all the way to BC.
00:28:29.180 He said, everyone's got jobs.
00:28:31.180 Yeah.
00:28:31.300 So he says it's busy, you know, road work, highway work, construction, everything's kind of, you know, you can tell.
00:28:39.100 Well, people's satisfaction is tied to whether they can have a meaningful career or a meaningful job.
00:28:45.580 Yes.
00:28:46.040 And as long as you have that, a lot of things will fall in place for you.
00:28:50.400 Yeah.
00:28:51.020 Yeah.
00:28:51.200 Well, and, you know, I think also, you know, we noticed, you know, immigration.
00:28:56.840 So here, you know, is you're starting to see it.
00:29:00.300 You saw more people come in.
00:29:01.640 So as we're coming in, we see people from different countries as we're moving around.
00:29:05.880 That's been a good sign.
00:29:08.200 And when we were in Halifax, we were having a bunch of conversations with people who are new to Canada.
00:29:15.240 Same thing.
00:29:16.060 They're enjoying it.
00:29:16.960 They're finding employment.
00:29:18.440 They're figuring out their way.
00:29:20.220 It seems to be a positive experience right now.
00:29:23.440 Without a doubt.
00:29:24.200 But again, right now, with the federal restrictions on immigration, it's having an impact on the growth of the population here, for sure.
00:29:33.240 Yeah, yeah.
00:29:34.580 Well, it's, you know, and that was, again, you know, they're trying to figure out, as we're seeing in central Canada,
00:29:41.260 they're trying to figure out what to do with the rapid population growth and where people go.
00:29:45.640 You know, I know Alberta, you know, the premier was saying yesterday or on Friday, you know, hey, when your work permit's up, you got to go, right?
00:29:55.580 So, you know, they're trying to figure out how to balance it.
00:29:58.060 And I'm like, I'm not sure.
00:29:59.960 In my mind, I'm trying to figure out, okay, are we going to just say goodbye to, you know, 100, 200, 300, 400,000 people and then try to bring more people back in?
00:30:10.000 You know, I understand how challenging it is because it's trying to balance that load, that workload, when things are going to happen.
00:30:17.840 And that's when, like, when I see this announcement about the lower church, I'm thinking to myself, well, isn't this good news?
00:30:23.640 You know, is there going to be more?
00:30:25.140 It is potentially good news, yeah.
00:30:26.740 Yeah.
00:30:27.340 The other thing that we have here, and you have it in Ontario as well, is the aging population, right?
00:30:34.000 Yeah.
00:30:34.180 So we have an aging population.
00:30:35.740 There's a number of things.
00:30:36.740 It changes the types of goods and services the government provides.
00:30:40.880 It changes the cost of goods and services the government provides.
00:30:44.180 So more health care.
00:30:45.520 And as you get into the older age groups, health care costs more.
00:30:51.460 And there's not a revenue obtained from people in terms of personal income taxes
00:30:56.960 and those kind of things fall dramatically after you hit 65, right?
00:31:01.200 Yeah.
00:31:01.360 And so we have decreasing revenues, increasing costs, and already in a situation where you have high debt.
00:31:08.880 So when you have a possibility of new resource developments, if you have new resource developments and new jobs, people will come.
00:31:18.660 Yeah.
00:31:19.100 Oh, yeah, you have to hop on them, right?
00:31:20.660 Because, you know, everyone's in the same boat almost across Canada.
00:31:25.160 You see that in terms of doctor's availability and those kinds of things?
00:31:28.840 Yeah.
00:31:29.040 Where things are prosperous, you have more doctors.
00:31:33.080 And where things are not so prosperous, you have less doctors.
00:31:36.000 Yeah.
00:31:36.620 Right?
00:31:37.360 Because when you're less prosperous, oftentimes you raise the taxes higher than people who are comfortable paying.
00:31:45.020 And that creates a reverse incentive for them for staying.
00:31:48.820 Yeah.
00:31:49.240 Right?
00:31:49.820 So they migrate to where it's better.
00:31:51.180 They go to where, yeah.
00:31:52.100 So people are perfectly capable of doing the calculation of what I get after taxes here versus Alberta, for example.
00:31:58.520 or Ontario, for that matter, as well.
00:32:02.300 That's true.
00:32:03.860 Transportation, what do you think?
00:32:05.180 I'm just curious to get your thoughts on it.
00:32:07.880 You know, is the government sort of looking at it, or is there?
00:32:11.540 They are, but it's expensive, right?
00:32:12.900 I mean, so the issue is right now that we're still running big deficits, right?
00:32:17.720 Yeah.
00:32:18.140 So their ability to fund these kind of things runs straight in the face of the debt we have,
00:32:27.320 debt servicing.
00:32:28.520 So, in 2008, 2009, that period of time, we had a lot of money coming in and we were able
00:32:37.180 to lower our debt, net debt.
00:32:40.080 Since that time period, we've had less money coming in and our net debt has gone up quite
00:32:45.020 substantially.
00:32:46.020 The debt servicing costs have gone up quite substantially as well.
00:32:48.960 So it's harder to borrow and the cost of borrowing has gone up.
00:32:53.800 So when you get things like the architectural agreements or other resource developments,
00:33:01.620 mining, oil, or fisheries as well, those are positive things right now.
00:33:07.800 Yes.
00:33:08.460 The problem we got is that people are getting older,
00:33:11.220 and the people with the skill sets that were used for different kinds of resources
00:33:16.640 are not there anymore.
00:33:18.020 and so we had to bring in new people and you bring in new people and you don't have the adequate
00:33:26.840 infrastructure available to them for housing or for other things and that just translates into
00:33:32.240 higher cost yeah it's a vicious a little bit of it's a vicious circle right yes we know you know
00:33:38.360 again yeah we know we need better transportation and better connection yes but where do you find
00:33:45.540 the money to do it and you know you got to get the projects going to make that happen and yes i
00:33:51.400 see it you know the funny thing i think you do too like and everyone i'm talking to we see that
00:33:57.200 it's coming around it's just when and how timing is important yeah yeah who's going to kind of
00:34:02.500 connect the dots and how that that's the key right now where that's where leadership's important
00:34:06.820 yeah yeah so leadership is one thing to manage when you have a lot of money it's another thing
00:34:13.320 imagine you have less and less money yeah yeah and and what you hope is that people have strategic
00:34:18.940 vision about where you want things to go to not simply the next three or four years because
00:34:24.020 their political cycle is three or four years yeah okay that's always the challenge and every you
00:34:29.100 know when they have a four-year election cycle it's always tough to figure all that out it is
00:34:34.600 and uh what you don't hear is a clamoring for people to say let's get the debt under control
00:34:41.200 because they're okay with, you know,
00:34:44.840 they're not going bankrupt, right?
00:34:46.100 You know, the issue is debt services will go up
00:34:49.060 and debt costs will go up,
00:34:50.620 but no one is saying, hey, don't do this.
00:34:53.780 Yeah, well, it's funny because, you know,
00:34:55.580 you always hear the argument, you know,
00:34:57.440 debt to GDP from a country perspective is fine
00:35:00.520 or better than European countries.
00:35:03.000 And I'm like, that's not a good argument.
00:35:06.340 No, it's not a good argument.
00:35:07.660 And the problem, part of the problem is that
00:35:09.720 there's no clear indicator when you have
00:35:12.360 a debt problem.
00:35:14.060 You can look at debt to GDP, you can look at debt
00:35:16.180 servicing costs, you can look at a number of things for capital
00:35:18.180 debt, and
00:35:20.340 if you've got enough of these things together, you can
00:35:22.340 say, okay, I now realize
00:35:24.380 I have a problem, but
00:35:25.960 it's not a matter that you've gone from
00:35:27.920 10%
00:35:29.420 to 11%, and now you've got a problem.
00:35:34.620 It's
00:35:35.020 accumulation of all kinds
00:35:36.420 of things together. They say, hey, we no
00:35:38.380 longer afford this kind of stuff but how do you stop it how do you like your revenue is sort of
00:35:44.740 well determined you have a better sense of what your revenue is going to be and your expenditures
00:35:50.000 we know what happens if they cut expenditures people who are affected by it are the people
00:35:55.720 they know exactly they're being affected by it oh yeah and then there's political ramifications of
00:36:01.480 that yeah so it's hard for any any party to decide this is what we're going to do because
00:36:07.560 it's not hard
00:36:08.700 to balance a budget
00:36:09.460 it's hard to balance
00:36:10.540 a budget
00:36:10.780 without destroying
00:36:11.640 people's lives
00:36:12.440 yes
00:36:13.240 that's the difference
00:36:14.340 I mean
00:36:14.620 you being an accountant
00:36:16.400 you can work
00:36:16.880 with a spreadsheet
00:36:17.320 and say okay
00:36:17.840 well if I need
00:36:18.440 more revenue
00:36:18.940 or I have less revenue
00:36:19.960 I can reduce my cost
00:36:21.340 by this amount
00:36:21.780 but doing that
00:36:23.220 has implications
00:36:24.060 yeah yeah
00:36:24.960 and that's the problem
00:36:26.060 yeah yeah
00:36:26.880 well you know
00:36:27.420 we just did a show
00:36:28.800 it's an interesting show
00:36:31.120 it's on
00:36:31.540 it was basically
00:36:32.420 we took a look
00:36:33.580 at Build 2
00:36:34.220 in Quebec
00:36:34.700 on the healthcare
00:36:35.560 and we kind of
00:36:37.360 same thing we said listen here's a here's a case study of what might have been some good things
00:36:43.380 but quite frankly turned out to be a really bad political ending you know for uh the premier at
00:36:49.100 the premier legault and uh minister dubois today and uh it's a shame you know because i think if
00:36:56.020 you looked at it they went that was the wrong approach but the actual contents of the bill
00:37:00.780 when you dissect it and pull it apart they had some good ideas right and we're like but but just
00:37:06.300 the wrong approach and they were too fast and they didn't have buy-in they didn't have the
00:37:11.380 physicians buy-ins they tried to change compensation schemes so the the economics on it
00:37:16.480 probably worked right probably when when they got to the end of the structure of the new deal
00:37:21.460 probably worked the problem is the approach and the timeline and stuff it wasn't there
00:37:25.720 and therefore they failed at it and that was the the camel that broke uh the straw that broke the
00:37:31.640 Campbell's back. And you need
00:37:33.700 to have planning and appropriate
00:37:35.820 consultation as well.
00:37:38.120 It's one thing to say you can do these things
00:37:39.840 and another thing is to be able
00:37:41.820 to feasibly do them politically as well.
00:37:43.880 We have to be cognizant of that
00:37:45.860 because if we're not,
00:37:48.180 you can propose any
00:37:49.740 plans you want
00:37:50.480 and justify that with your own spreadsheets.
00:37:54.540 But again, if it
00:37:55.680 doesn't make sense from a political perspective,
00:37:57.860 it won't get done.
00:37:58.700 I know
00:37:59.880 Wade
00:38:00.600 are you
00:38:01.200 I've got to ask you
00:38:02.060 are you going to be there
00:38:02.840 tomorrow to watch
00:38:03.680 the Prime Minister
00:38:05.320 I don't even know
00:38:06.040 if we can get invited
00:38:06.680 but listen
00:38:07.900 I think you should be there
00:38:09.180 for sure
00:38:09.720 because you
00:38:10.560 you understand this
00:38:11.700 better than
00:38:12.360 we'll watch it for sure
00:38:13.900 yeah
00:38:14.400 yeah
00:38:15.000 no it's a
00:38:15.740 it's a
00:38:17.520 it tends to
00:38:18.680 it may indeed be a
00:38:20.360 a transformative
00:38:21.900 time period
00:38:23.260 for your problems
00:38:23.880 I hope it will
00:38:24.880 hopefully it is
00:38:25.660 I hope it will
00:38:26.440 well I mean
00:38:27.120 the amount of money involved
00:38:28.600 allows them to do
00:38:30.660 some things that they otherwise couldn't do
00:38:32.780 like your transportation or
00:38:34.660 education
00:38:35.360 or health care
00:38:37.400 to your point
00:38:40.500 these are all things
00:38:41.660 I'm looking forward to it
00:38:43.420 I hope we get an opportunity to go ourselves
00:38:46.400 because I'd like to go listen firsthand
00:38:48.420 very curious to see what the announcement is
00:38:50.940 and I'm very optimistic
00:38:53.080 that it's going to be a good thing
00:38:54.860 so fingers crossed
00:38:56.280 Me too, me too.
00:38:57.540 Well, thank you for taking the time today, and I really appreciate you coming by.
00:39:01.940 Thank you.
00:39:02.380 All the best.
00:39:03.060 Bye.