Leverage as Currency in Newfoundland Politics

Introduction

In Newfoundland and Labrador, politics runs on a peculiar economy. It is not measured in dollars or policy wins but in subtler, less visible exchanges. Natural resources, silence, and access are the province’s true political currencies. They circulate in ways outsiders rarely perceive, yet they shape decisions from the smallest council chambers to billion-dollar megaprojects.

The pattern is familiar. When capital is scarce and municipalities live under what economists call a three-way squeeze — tiny tax bases, high per-capita service costs, and chronic provincial fiscal stress¹ — bargaining shifts from money to leverage. In this shadow economy, silence buys survival, resources become negotiating chips, and access is doled out like gold.

The Currency of Silence

In Newfoundland politics, silence is rarely free. It is purchased, managed, or extracted. A citizen who speaks out risks exclusion from meetings, projects, or funding opportunities. A citizen who stays quiet may find themselves invited, included, or even rewarded.

This is not the same as the repetition described in Rehearsed Truth: How Repeating the Same Story Keeps Newfoundland Stuck². There, stories are recycled endlessly. Here, silence itself becomes a tradable asset. It can be bought through small grants, co-opted through consultation rituals, or maintained through subtle threats.

The Local Paradox framework describes how grand policy schemes use consultation to “perform” participation while narrowing who can speak³. Silence, then, is not absence — it is leverage in play, a commodity exchanged for access. It is also the opposite of recognition justice, which scholars like Hogan stress as central to fairness in energy projects⁴.

Resources as a Bargaining Chip

The province’s natural resources are vast, but their meaning is not fixed. Resources — whether land, water, or energy — are not merely matters of development; they are positioned as tools in the ongoing barter system.

Jasen Benwah’s sweeping claims over the Port au Port Peninsula, Mildred Lavers’ over the Northern Peninsula, and Peggy White’s stretching from Caudroy to Port aux Basques are not just assertions of territory — they function as negotiating positions. They can block or unlock development, force government consultation, or pressure industry into concessions.

This is a different angle than Green Land, Empty Hands: How Resource Governance Leaves Locals With Symbolic Wins⁵, which argued that locals are left with symbolic victories while real wealth leaves. Here, the point is sharper: resources themselves become the ticket to the table. Their value lies not in what is built or mined, but in their capacity to stall or enable.

Access as Controlled Capital

Access — to meetings, to policymakers, to decision-making rooms — is another key currency. Invitations are not neutral gestures. They are allocated strategically.

In Kingmaker Dynamics in Newfoundland: Local Gatekeepers and the Politics of Silence⁶ and Kingmaker Dynamics in Newfoundland: Recycled Influence, Memory, and Global Parallels⁷, we traced how individuals recycle through political and cultural roles. But what these gatekeepers really control is access. Being “in the room” has value even when the decisions are already made elsewhere. Those who play along keep their seat. Those who dissent are cut out.

Access, in this sense, is capital. It is used to maintain networks, to police silence, and to reward loyalty.

The Fiscal Backdrop: Soft Budgets, Hard Leverage

Why do these currencies matter so much in Newfoundland? Because money itself is unstable. Municipalities are locked into that three-way squeeze — narrow local tax bases, high fixed service costs, and a province burdened by debt¹.

Economists call this the soft budget constraint: once a government has a history of bailouts, local entities rationally expect future rescues and adjust their behavior accordingly⁸. Newfoundland exemplifies this perfectly. With little hard cash or fiscal credibility, the province substitutes leverage for capital. Silence, resources, and access become the commodities of choice.

Leverage as Newfoundland’s Real Political Currency

When viewed through this lens, the seemingly chaotic pattern of Newfoundland politics makes sense. Megaprojects stall not because they lack vision but because the exchange system is clogged with silent bargains. Resource claims resurface not solely from principle but because they hold trade value. Consultation rituals persist not to empower citizens but to ration access like scarce currency.

This barter economy of leverage explains why resets repeatedly fail. Each new cycle — from Churchill Falls to Muskrat Falls to today’s wind-to-hydrogen projects — is layered on top of the same exchange system. Money may flow in and out, but the real currency remains intact.

Conclusion

Newfoundland’s politics do not lack intelligence or effort; they lack hard capital and hard constraints. In its absence, a substitute economy thrives — one where silence is purchased, resources are traded, and access is rationed.

Until these currencies lose their value — until silence is no longer rewarded, resources are treated as more than bargaining chips, and access ceases to be a gatekeeper’s favor — Newfoundland will remain locked in a cycle where leverage, not policy, drives decisions.

References

[1] Guo, X. (2025). Optimal Transfer Mechanism for Municipal Soft-Budget Constraints in Newfoundland. https://arxiv.org/abs/2508.02171v3 (Local Download)

[2] Simon, H. (2025). Rehearsed Truth: How Repeating the Same Story Keeps Newfoundland Stuck. Bayman’s Paradox. https://baymansparadox.com/explore/governance/post.php?id=161

[3] Van Assche, K., Greenwood, R., & Gruezmacher, M. (2022). The local paradox in grand policy schemes: Lessons from Newfoundland and Labrador. Scandinavian Journal of Management, 38(3), 101212. https://doi.org/10.1016/j.scaman.2022.101212 (Local Download)

[4] Hogan, J. (2025). The Legacy of the Cod Fishery Collapse: Understanding Wind Energy Acceptance in Newfoundland through Energy Justice and Place. Energy Research & Social Science, 127, 104274. https://doi.org/10.1016/j.erss.2025.104274 (Local Download)

[5] Simon, H. (2025). Green Resources, Empty Hands: How Resource Governance Leaves Locals With Symbolic Wins. Bayman’s Paradox. https://baymansparadox.com/explore/local-paradox/post.php?id=160

[6] Simon, H. (2025). Kingmaker Dynamics in Newfoundland: Local Gatekeepers and the Politics of Silence. Bayman’s Paradox. https://baymansparadox.com/explore/governance/post.php?id=162

[7] Simon, H. (2025). Kingmaker Dynamics in Newfoundland: Recycled Influence, Memory, and Global Parallels. Bayman’s Paradox. https://baymansparadox.com/explore/governance/post.php?id=163

[8] Kornai, J. (1986). The Soft Budget Constraint. Kyklos, 39(1), 3–30. https://onlinelibrary.wiley.com/doi/10.1111/j.1467-6435.1986.tb01252.x

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