Addressing NB’s economic challenges: The right messages to the right audiences

The best of the media tweeters, Jacques Poitras, recently tweeted comments of the new NB LG.  poitras

This is a good time to restate my view about targeting the right messages to the right audiences.  Because some people will read the LG’s comments and say she is absolutely right.  We need to stop talking about our challenges and focus on the positives.

But for me this would be a mistake.  In fact, I believe the vast majority of New Brunswickers including those in power don’t realize the pickle we are in right now with respect to our economy and demographic situation.  They hear it but have become immune.

Because I swim in all the data I guess it is easy for me to put on the prophet of doom cloak but the opposite effect – Pollyanna – doesn’t solve anything either.

So our core message should be one of potential and opportunity just as stated in Poitras’ tweet above (realizing this is true but only up to a point).  But we still have to talk about the uncomfortable subjects too.  Denying them or dismissing folks who talk about them as too negative isn’t the right approach.

We do face variants on two futures: One version of NB’s future is one of population growth, economic vibrancy and fiscal sustainability.  Where creative people and entrepreneurs thrive.  But the other version – stagnant economy, youth out-migration, fiscal weakness is the one we are trending towards right now.


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What do shale gas and blueberries have in common?

The Province of New Brunswick covers a land area of 71,377.18 square kilometres.  That works out to 17.63 million acres.  Each shale gas well takes up between one and three acres.  Using the high number of acres and assuming a high number of wells drilled on the high side that would result in something like 30,000 acres over a 30-year period

This would result in a total land area allocated to oil and gas development of 0.17 percent.  That is less than one fifth of one percent or about the same as is currently used for blueberries.

The legislation forces gas development firms to re-mediate the land back to its pre-well state so even if the industry continued beyond 30 years it is hard to see how it could ever consume more than a fraction of one percent of New Brunswick’s total land mass.

I raise this point only because a friend of mine used a variant of the term “industrial wasteland” again when discussing the shale gas industry.  I’m all for a vigorous debate about shale gas but as the old saying goes “you are entitled to your own opinions but not your own facts”.

If New Brunswick gets around to developing its natural gas reserves it will create more industrial activity.  There will be more trucks on the road, more burly men in the woods and, yes, more people in Emergency Rooms with fractures and other maladies.

But there is no evidence vast swathes of the province will be turned into an industrial wasteland.

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Ten-year NB employment growth by sector. You might be surprised….

It is interesting to look at the employment trend by sector in New Brunswick over the past decade as it does put things into perspective.  On a seasonally adjusted basis, in September 2004 New Brunswick had 352,600 people working.  In September 2014, there were an estimated 354,100 working – or a difference of +0.4 percent (rounded down in the table).  Nationally, the economy added 1.95 million jobs over the 10-year period.

The table below shows the sectors that added and those that lost employment over the period.  This is from the LFS so the aggregation is quite high but it does provide a high level snapshot of what has been going on.  NB’s agriculture sector is quite small relative to the country as a whole – still it has shed 46% of total employment over a decade – or about 3,200 workers. Manufacturing has dropped about 30% of its workforce.

I have been warning about transportation and distribution for years but I can’t seem to get any kind of good answer as to why this sector has shed nearly 5,000 jobs over the decade. The big jump in public administration employment is strange.  Maybe some kind of anomaly in the data as it is showing 3,500 more workers in Sept 2014 than just one year ago back in Sept 2013.  September 2009 was actually the high watermark for Septembers – there were an estimated 27,200 workers in public admin in that month – just slightly below the 27,000 in Sept. 2014.

Look at health care and education employment.  Those two sectors combined across Canada have accounted for 776,000 new jobs.  In New Brunswick, 4,300 net new jobs (0.55% of the national total).  Now, these sectors tend to track overall population growth (which is virtually zero in NB and robust across Canada) but it is a reminder that so much of the service sector (and construction) is reactive to overall population growth.

Other than public admin, NB saw employment growth in the utilities sector rise faster than the country as a whole as well as the info, culture and recreation sector.

Percentage change in employment (September 2004-September 2014)
Seasonally adjustedemp

Source: Statistics Canada CANSIM Table 282-0088.

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NB and NS: We’re all in this together (employment stagnation)

The teeny bopper movie that was so popular a few years ago called High School Musical featured a catchy song called “We’re all in this together”.  This could be the theme song for New Brunswick and Nova Scotia.  The chart below shows employment growth in the two provinces from September 2005 to September 2014 (on a seasonally adjusted basis).  I show it as an index but it really means Alberta’s employment has grown by 25% and Nova Scotia by 2%.  An index allows me to display my economic bona fides.

The two provinces have witnessed virtually no employment growth over the nine year period. Note that PEI has started to pull away from NS and NB.  The Island is by no means booming but a strong focus on immigration and the growth of a few key sectors such as biosciences is showing up in the numbers.



The interesting thing to me is that this doesn’t seem to bother a lot of folks and, in fact, I get emails suggested we should “get used to it” and it is the “new normal” and even “it’s a good thing”.

Maybe.  I don’t claim to have all the answers but I see a long, difficult period ahead for this province if we don’t get population and employment growth back to at least a moderate growth position.


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What the Mactaquac Dam says (or doesn’t say) about our view of the future

If you read the history of New Brunswick’s big electricity generation projects you will find they were meant to facilitate economic growth.  Going back to the 1920s, the main rationale given for big public investment in power projects was to facilitate economic development – heavily related to forestry but also mining and urban growth.

The same applies to the Mactaquac dam.  It was a key reason why the Nackawic Pulp Mill was built in 1970.

That was then.  This is now.

Most of the discussion now is about how we won`t have any need for Mactaquac power in the future.

Whereas throughout the 1900s the rise in power generation was a driver of economic growth in the 2000s the closure of generation plants and the decline in power will come as  a reaction to decline.

Now of course no narrative is ever so neat and tidy.  We now focus more on energy efficiency.  We want to reduce our energy footprint per dollar of GDP.  We want the energy we produce to be cleaner and less hard on the environment.  Maybe we will move more towards distributed generation.  Who knows?

For some the Mactaquac dam is an ideal source of power because of no carbon emission and the huge disruption that comes from the initial development of hydro power is done.  A new ecosystem has developed that would be disrupted again if we tried to remediate the Mactaquac dam back to 1960.

But I still can`t avoid that nagging feeling that this is just part of the NB decline narrative.  Like the folks in the Department of Finance warning universities and colleges they will need to downsize their expectations.  Or the whole narrative about austerity.  It`s a culture of decline.

Yet few have thought through how continuing decline will fully impact our province.

Those who like the idea of a slow paced, retirement-focused New Brunswick where Sunday afternoon drives through the rolling hills are the week`s highlight haven`t thought through the sustainability of that vision.

I have never argued for massive growth but if we get to the point where decline is acceptable then we have to think about the implications and what we are prepared to sacrifice to support that decline.


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Want to guess the fastest growing & biggest declining U.S. states & CDN provinces?

It may be a coincidence but it is an interesting one.  Statistics Canada has a chart showing the six fastest growing U.S. states and Canadian provinces and the six slowest growing (actually declining) by population.

Other than Nunavut, the five fastest are all oil and gas production jurisdictions (Alberta, Saskatchewan, North Dakota, Utah and Colorado) and the ones with the biggest decline in population are Maine, Nova Scotia, West Virginia, New Brunswick and Newfoundland and Labrador – all notably absent from oil and gas development with the huge exception of Newfoundland and Labrador.

The issue in NL is that the offshore fields require significant employment while they are being developed but little during production.  The Newfoundland and Labrador economy is still facing a lot of upheaval in other sectors and in many areas outside a few communities.

The issue in NB, NS and Maine? – well see blogs 1-3,200 written on these pages.



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New Brunswick: A brain for the world? Pearls of Wisdom from Dr. Dhirendra Shukla

From a recent TJ column:

If someone asked me to name the most entrepreneurial university in Canada (the one most supportive of business startups), my first thought would be the University of Waterloo. However, at the 2014 Startup Canada Awards this year our own University of New Brunswick was named Post-Secondary Institution of the Year.

I recently sat down with Dr. Dhirendra Shukla, chair of the J. Herbert Smith Centre for Technology Management and Entrepreneurship, to find out how UNB earned this impressive title.

He told me UNB has made entrepreneurship a priority by combining technical education with entrepreneurial projects and support for business skills development.

In a press release announcing the accolade, UNB president Eddy Campbell says the university “has earned its spot as the most entrepreneurial university in Canada because we’ve established infrastructure on our campuses that empowers our faculty, staff and students to transform ideas into industry-leading technologies and business solutions.”

The university has several entities that support entrepreneurs including the International Business & Entrepreneurship Centre, Pond-Deshpande Centre and Wallace McCain Institute.

But in the end these things always come down to the quality and ambition of the people involved and I am particularly impressed by Dr. Shukla.

He has a PhD in entrepreneurial finance from King’s College in London and was in a senior role at Nortel back in 2009 when UNB came calling. He was recruited to Fredericton to fill the Dr. J. Herbert Smith Chair for Technology Management and Entrepreneurship and hasn’t looked back.

The number of students has swelled since he joined UNB and the school is now churning out on average 10-12 new startup companies per year.

Shukla has given a lot of thought to how the University of New Brunswick can advance its position. He would like the university to be a magnet for young entrepreneurs from around the world. These bright young entrepreneurs would be the feedstock for the province’s business incubation and acceleration centres such as PropelICT and PlanetHatch. In fact, already upwards of 30 per cent of his students are from outside of Canada.

He aspires for UNB to be Canada’s version of the Center for Entrepreneurial Studies at the Stanford Graduate School of Business in California. That is a bold vision as Stanford has graduated more technology company founders than any other university in North America.

Dr. Shukla also has big dreams for New Brunswick.

When he moved here he was impressed by how much space and time this place gives for deep thinking. He told me there is “is no better place to think”. His ambition for New Brunswick is to be a “brain for the world”.

This aligns nicely with my recent musings on the uncomplicated life afforded to New Brunswickers. Will we squander this lifestyle totally on fun and recreation or will be use it to be Shukla’s brain for the world?

He has little patience for naysayers. He has lived on four continents and thinks that anything can be accomplished in New Brunswick.

As he builds his vision for New Brunswick, the new Premier could use a dose of Shukla’s infectious optimism.

In recent months he has been contemplating a new framework for leadership. His has an interesting new take on ‘contextual’ leadership. Different times and contexts call for different leadership styles.

To pursue this line of thought, Shukla is teaching a new course “Leadership in an era of deep change” with former UNB President Dr. John McLaughlin. He told me there is a broad mix of students young and old from a variety of walks of life in the course.

This is a timely subject for New Brunswick. I think most of us are beginning to understand that things are changing in this province. There is no doubt the many demographic, economic and social forces buffeting the province will be transformative in the coming 10-20 years.

But transform into what? Will we be a brain for the planet or one giant retirement village?
I hope Dr. Dhirendra Shukla’s vision wins out in the end.

David Campbell
An economic development consultant based in Moncton

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New Brunswick played crucial role in the founding of Confederation!

Ged Martin, the chair of Canadian studies at Edinburgh University in Scotland, was in New Brunswick this week to stir the pot. He told a packed house (maybe not that packed) that New Brunswick was the main reason why the Confederation occurred and survived. As stated in the TJ “Despite Prince Edward Island touting itself as the birthplace of Confederation – New Brunswick actually played a greater role in ensuring the formation and early success of a united Canada”.


“I have always felt that New Brunswick has a bit of a collective historical inferiority complex about the standard story that the province really didn’t do very much about confederation and had to be dragged kicking and screaming in. “I regard that as a travesty – New Brunswick’s role was in fact crucial.” Martin goes as far to say that the province largely “steered the formation and survival of the Dominion of Canada.”

Professor Martin, however, doesn’t seem to realize that more than a few folks down this way think that Confederation wasn’t a particularly good outcome for New Brunswick.  I’m not suggesting there is an appetite to split away now – a la Scotland or Quebec ambitions – but more than a few historians, scholars and other thinkers have suggested that if the Nova Scotia had got its way and we ended up with the more limited “Maritime Union” this region would have prospered more than otherwise.  It would have controlled its own immigration, trade, investment and other policies.

Professor Martin continues:

“It was New Brunswick politicians who ensured that the September 1864 Charlottetown Conference endorsed the wider union of British North America, not the smaller scheme of Maritime Union pushed by the Nova Scotians,” Martin said. “New Brunswickers ensured that the Nova Scotia push to get Maritime Union didn’t go ahead – they didn’t want that.” Martin said the province’s politicians felt that New Brunswick would essentially be relegated to “greater Nova Scotia” under a Maritime Union.

Again, in hindsight some would suggest Nova Scotia was on the right track.

I’m not a historian and I think this debate could play out endlessly with no real resolution.  There are too many unknowns.  Those that argue in favour of Confederation say New Brunswick would have ended up like Northern Maine.  Those that argue against say Halifax would have been Boston.  I have read a fair amount about the period and suspect that either the Yanks would have taken the area over or Upper Canada would have kept trying until they won.

It’s fun to discuss and interesting that one cloistered academic across the Pond is actually thinking about the land of maple syrup, fiddleheads and rolling hills.  There are few of his ilk these days.


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We need to talk about population

From a recent TJ column:

Among folks who have time to debate these things, the legacy of former Premier Bernard Lord is highly contested. His supporters point to balanced budgets as well as moderate GDP and employment growth. They characterize his time in office as a golden age for New Brunswick.

His detractors point to a series of what they call strategic policy blunders ranging from the scrapping of the Moncton-Fredericton toll highway, runaway automobile insurance premium growth, the Venezuelan Orimulsion scandal, his dithering over the Point Lepreau Generating Station refurbishment and an overall lack of any real movement on the big issues facing the province.

They also refer to his national battle with the federal government over equalization as a black mark on the province’s reputation. The subsequent “self-sufficiency” agenda of Shawn Graham (the concept of eliminating the province’s need for equalization) emerged as a response to Lord’s demand for more cash from Ottawa.

As usual there is some truth to be had in both camps but there is at least one aspect of Bernard Lord’s legacy that is unambiguous. He has the dubious distinction of being the only elected Premier in the province’s history to preside over a declining population.

According to the annual population estimates published by Statistics Canada, former Premier Richard Hatfield presided over a 85,000 person increase in the population during his 17 years in office. Under Frank McKenna, the population grew by a modest 25,000 people.

The total population during the Bernard Lord administration dropped by 5,000 (between 1999 and 2006). Meanwhile, across the country the population boomed.  It increased by a robust 2.2 million people.

Shawn Graham’s Liberals returned the population to slow growth as the province saw an increase of 7,400 people between 2006 and 2010. The jury is still out on David Alward but it looks like he will eke out a tiny increase in the population between 2010 and 2014.

The bottom line is simple. The total population of New Brunswick has barely budged since Bernard Lord took over in Fredericton in 1999.  At the same time, Canada as a whole has been in the midst of the biggest population boom in history.  Between 1999 and 2013, the national population swelled by 4.8 million people.  New Brunswick completely missed it.

Why does it matter? There are several reasons why at least moderate population growth should be a main objective of government.

First, we are about to hit a demographic wall. New Brunswick’s population aged 55+ has ballooned since 1999 – rising nearly 50 per cent. Without an infusion of younger workers in the near future, the province’s economic potential will be stymied.

Second, we need population growth to build up our tax base. The majority of economic activity in New Brunswick comes from consumer spending.  If we have no growth in consumers it is hard to see how we can expect even a moderate increase in the tax revenues we need to pay for public services.

Third, New Brunswick needs more population to make better use of its infrastructure. People that visit New Brunswick are amazed at the amount of four lane highways, airports, universities and hospitals.  For a population of 750,000 we have more than our share of infrastructure.  We can either plan to scale it back through a long period of decline or we can make better use of it by boosting the population around the province.

I’d like to see community level plans for population renewal from one corner of this province to another.

It is strange that population growth has hardly been mentioned during this election campaign.

Our population challenge is barely on the politicians’ radar because a) folks that might live here in the future don’t vote now and b) a lot of New Brunswickers are perfectly satisfied with the status quo and the politicians instinctively know this even if the pollsters do not. Rolling into town telling people that you are going to bring hundreds of immigrants into their community will cost you votes.

The 2011 movie We Need to Talk About Kevin was a story about how people struggle to talk about a uncomfortable issues.

In New Brunswick, uncomfortable or not, we need to talk about population growth.


David Campbell
An economic development consultant based in Moncton


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Selling the uncomplicated life

From a recent TJ column:

I wrote last week about what my father-in-law calls the “uncomplicated life” New Brunswickers enjoy by choosing to live in this province.  Many of the little things we do every day without complication can pose a big challenge in a large urban area.

I got a firsthand refresher on this fact recently while dropping my daughter off at York University in Toronto.   On a Sunday afternoon we spent 90 minutes in a massive traffic jam and then waited in a long queue to find an available parking spot at a local mall.    Later than evening, friends of ours who moved to Toronto a few years ago regaled us with stories of how hard it is to live and get around in Canada’s largest city.

Traffic, crime, regulations, managing the cost of life and even something as simple as going for a walk can be more complicated compared to a place like Saint John or Fredericton.

For many people the hustle and bustle of Toronto or Vancouver is just part of the package. They are willing to put up with the complications of living in a very large urban centre in order to reap the benefits.  However, there is evidence some those living in Canada’s largest urban centres would consider living and working in smaller cities such as Saint John, Fredericton and Moncton.

After writing the column last week, I received several emails from readers who concluded we should use the uncomplicated life to our advantage and try and convince folks living in large urban centres across Canada they should move to New Brunswick.

One lady suggested we should encourage Torontonian and Calgarian Boomers and recent retirees to leave their high cost, high stress environment behind and move to the bucolic Fredericton region.

Another told me we should convince professional and small business owners who could base their business anywhere in Canada to move to New Brunswick.

According to Statistics Canada, there are nearly 400,000 people who worked from home and live in the Toronto, Montreal and Vancouver metro areas.   For many of them, because they work at home, that could just as easily be Saint John, Moncton or Edmundston.

In fact this is already happening. According to Statistics Canada, between 2006 and 2012 every single year more people moved from Toronto to Moncton than vice versa.  While the numbers are not large it clearly shows a reversal of the historical out-migration at least for the Moncton metropolitan area.

We can also look to Saskatchewan as an example. After running an aggressive advertising campaign meant to convince people from Ontario to move to the prairie province, the number moving there jumped from around 1,500 per year in the early 2000s to over 5,000 in 2013.

Whether they come from Toronto, Vancouver or Bucharest, if New Brunswick could grow its population by a few thousand people per year it would provide a sizeable boost to the province’s gross domestic product (GDP) and tax base.

Not surprisingly there hasn’t been much talk of ‘attracting’ anything to New Brunswick during this election campaign. Stumping from town to town around the province promoting a platform of attracting people, entrepreneurs, investors and big national or international businesses would be a sure fire way to lose votes.

There is a longstanding unease in this province about anything “from away” and many politicians find ways to exploit unease for political gain.

But whether we like it or not we now live in an open society where people and investment flow freely. New Brunswick is already runs a huge trade deficit in people, investment as well as trade in goods and services.

We need to get over our fear of “from away” and be open to attracting businesses, investment and people and not worried these inflows will erode the uncomplicated lifestyle we value here in New Brunswick.


David Campbell
An economic development consultant based in Moncton

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