Economic development: Deeper truths

Sunday morning sermons can be a little bit frustrating for people who actually pay attention.   You will hear a steady stream of counter-intuitive axioms such as “the first shall be last”, “to live you first have to die”, “to be rich you need to be poor”, “to save your life you first have to lose it”, etc.    When confronting my man (or woman) of the cloth these get defined to me as “deeper truths”.  Concepts that require more thinking beyond the superficial.  It’s fairly easy to see how a millionaire is rich.  It’s harder to see how mother Theresa was rich.  But if you grasp the second you are closer, as they say, to real riches.

Sorry to pivot from the sacred to the secular, and relatively pedestrian, but there are similar truths that apply when looking at economic development.  One deeper truth is that the economies that have the workforce to fill ‘lower paying’ jobs tend to be stronger in the longer run.  Particularly since the Boomers started to retire and the national economy started to completely rely on immigration for labour market growth.

Take a look at three examples: tourism, administrative and support and transportation.  All three sectors are not particularly high wage or high skilled but are growing strongly in Ontario, British Columbia and to a lesser extent Manitoba.  Now it is important to point out this is a short sample – three years – and from the Job Vacancy survey which would not be as robust as, say, the Census.  But it is important for illustrative purposes.

Payroll employment growth in the accommodation and food services sector has been robust in Ontario and BC and that has pushed up the national growth rate to seven percent over the three year period – seven times faster than New Brunswick.  This is not all tourism-related, of course, but a good proxy.

Then look at administrative and support services employment which includes contact centres, travel agencies, and a variety of other fairly low wage administrative-related employment.  Booming in Ontario.  Down in New Brunswick.

Then look at transportation and warehousing.  Fairly straight forward – truckers, warehouse workers, dispatchers, etc.  Employment is up strongly across Canada and barely budged in New Brunswick.

The typical response is: “why do we care”?  Let Ontario have the ‘low end’ jobs but this is where the deeper truth comes in.  If you aren’t filling those jobs, in the longer run you dampen economic activity and risk holding back growth in higher wage sectors like health care, education, finance, etc. that rely on a growing economy and population.

Now, the good news from the Job Vacancy survey is that finance and insurance jobs in New Brunswick are actually up strongly in the past three years (discussed in a previous blog) but that is heavily related to export-based activity and not local market activity.  Health care and public administration jobs are up 12% and 13% respectively over three years but, again, those sectors at least in the longer run are tied to overall economic and population growth so can’t sustain out-sized growth indefinitely without broader economic growth.

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Want a strong economy? Don’t mess with the Serengeti Plain

There has been a few stories in the media recently about business closures in New Brunswick.  Does it portend doom?  Is the economy about to collapse?

Relax.  Within two years of starting, 11.4% of all businesses across Canada go out of business.  This is known as the business exit rate.  Across Canada, almost 130,000 businesses will go out of business within two years of starting.  The better metric is business starts.  If the entry rate is higher than the exit rate for a prolonged period of time that is one sign of a strong economy.  If the exit rate is higher, it could be a warning sign.

The private sector economy is best viewed as a kind of Serengeti Plain – a wild place where the strong survive and the weak die off quickly.  This Schumpeterian dynamism is important.  We want to be a place where people can quickly test new business ideas – get in the market quick – fail fast – get out, start over.   It can be painful to see an entrepreneur go out of business but that is the nature of a dynamic economy.  We would never get innovation without the Serengeti Plain.  We would never see a focus on productivity and prices would be bloated without the Serengeti Plain.  Many economists suggests that wealth consolidates in even fewer hands if there is no competition to beat down excessive profits (although there may be less wealth to begin with).

I haven’t seen these numbers for New Brunswick.  I have taken a look at other data that suggests the Serengeti Plain is not as alive in New Brunswick as elsewhere. More incumbents, less business churn.  I’m not sure about this and it would take more research but if this is the case it is not a good thing.  From the individual business perspective being in a protected or sheltered industry or being in a geographic location where no competition arises feels good but for the economy and the public interest overall it is not particularly good.  Less innovation, higher prices and – more importantly – firms ill equipped to tackle external competition when it comes.

A few years ago I used the example of business cards.  When I started this business more than a decade ago I paid over $100 to get a box of business cards from a local vendor.  Now I can order that same set of business cards for 84% less from a vendor in the United States – thousands of kilometres away.

Government policy should be structured to encourage the Serengeti Plain.  There should be enough risk capital around to absorb the losses associated with the Serengeti Plain.  National banks should have the same risk tolerance in New Brunswick as they do in Ontario (ooops, can anyone confirm this?).  Governments should certainly not pump in more cash to try and keep a firm alive just because they were an initial contributor and are worried about being associated with a loss.  Let it go under.  Likely the entrepreneur will get back up and get back on the Plain (unless she is blackballed because of one failure).

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Insuring New Brunswick’s economic development

Statistics Canada surveys businesses to assess employment levels.  Guess the fastest growing industry in New Brunswick in the past five years?  No, you cynic, it is not funeral services business.  In fact for some reason employment in the funeral services business in New Brunswick is down over the past five years.  Either that industry is getting more productive or it might have something to do with the consolidation going on in the industry. Yes, I keep my eye on the funeral services business too.  It’s not macabre.  For a purely economic rationale.  Still a bit creeped out by that Molly Parker movie.  Google it.

No, the fastest growing industry in New Brunswick between 2013 and 2017 (2018 data not out yet) is the insurance carrier sector. Between 2013 and 2017 the industry added 2,100 new jobs. This was more than hospitals (1,900) and public administration (2,000).

There are now over 5,000 people working in this sector and most of it is export activity.  A lot of the employment is in Greater Moncton – Wawanesa, Medavie, Cooperators, etc. but also Saint John anchored by TD Insurance.  New Brunswick now has more employment in the insurance carrier business as a share of the labour market than all other provinces except Manitoba.   There are over 5,000 people processing insurance claims and other back office work from across Canada.  I’m not sure how much higher end work is being done (actuarial, etc.) but at least some of that work is done here too.

We should do all we can to nurture this business. I understand CCNB now as a course that graduates folks with skills in the insurance sector.  I would double down on this.  Let’s pump hundreds through insurance-related college programs and stream them right into the insurance carrier sector.  Same with UNB and UdeM.  Let’s teach the business grads more about the insurance business because they can start their careers right here in New Brunswick with some of the best known firms in the business.

How about university research?  We have chairs in cannabis, big data, cyber, etc.  None are even close in terms of employment impact in New Brunswick.  How about putting our researchers to work thinking about the future of insurance and customer interaction?  How about global warming and the impact on P&C insurance?

How about startups?  There must be dozens of good ideas that could align with the insurance sector.   Instead of waiting for the insurance industry to knock on our door, why not barge in and ask?

This is a good thing.  Let’s wrap around the insurance carrier industry a value proposition so strong that even more will want to invest and grow here.

 

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Out of gas: Sable R.I.P.

A little over 20 years ago I was asked to a meeting at Moncton City Hall where Bud Bird and the gang at Gas NB were going to present on the exciting new opportunity that natural gas would present for New Brunswick.   I asked Bud directly would having local access to natural gas lead to more industry setting up in the province and his response was an unequivocal “yes”.

This week the tap was finally shut off and Sable gas will no longer pump into the Maritimes.

I have said before that this was likely one of the biggest lost opportunities for New Brunswick in generations.  There were no new manufacturing plants attracted as a result of cheap gas.   Lower cost natural gas did bolster the competitiveness of many of our largest industrial players but the system overall never achieved what was hoped for and in fact was mostly a huge disappointment.  The blame can be spread around – government, regulator, Enbridge, etc. all played a role in the dysfunction.

Now the problem is much more straightforward. Depending on the price of gas we will need to import $300 – $400 million or more in gas each year to satisfy the demand here and our gas users will mostly have to pay a significant premium over most other regions of North America.  Some may switch back to heavy fuel oil – a few have already done this.

Enbridge turned out to be a wily player.   They were facing the potential write down of several hundred million dollars and ended up selling to another company for what was likely a small premium.  The executive that pulled this off likely got himself a juicy Christmas bonus this year.

The new natural gas distributor has a 25+25 year license to distribute natural gas (50 years if you are math challenged) and no local source.  Gas is already being purchased in Alberta and the southern U.S. and being pumped all the way here (although some of this is virtual – the transportation costs are very real).

It is possible that more local gas will be found and start to supply local markets at some point in the future but there are lots of hurdles.

Many of the same folks that argue for self-sufficiency in agriculture and other products – that argued vehemently against selling NB Power to Quebec as we would lose control over our energy systems are perfectly content to import natural gas – which is now likely a more important source of energy for our big industries than electricity – at a long term premium.

How much?  Impossible to say but will likely be in the billions of dollars over the term of the franchise agreement.

There is a false and intellectually lazy narrative out there that natural gas is going to fade away as an energy source anyway as renewables take its place.  This is not true.  In fact, it is likely transportation fuels will decline before natural gas – industrial and residential – does so.  In fact, if we had a little bit of ambition we could have used natural gas to convert Colson Cove and Belledune – having a profound impact on our carbon emissions.

If natural gas use declines in New Brunswick in the short term it will be because industry has a) declined and moved elsewhere; or b) firms have shifted back to other more carbon intensive fuels.

Sable R.I.P.  Your demise is going to cost New Brunswick’s economy dearly.

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End of year miscellany: The Big Apple, incentives and the role of government grudge match

The big apple
On relatively short notice I decided to take the family to the Big Apple between Christmas and New Years.  I knew it would be busy but in fact it was downright crazy.  Everything was teeming with mostly frustrated tourists.  Doesn’t matter where – Battery Park/WTC, Times Square, Rockefeller, 5th Ave. – even Central Park – throngs of tourists.  Finding a restaurant, washroom, getting into stores – the simple things – were challenging.  Without any data to back me up its seems to me that Airbnb might be distorting the tourism market there.  The number of hotel rooms traditionally acted at least somewhat like a brake on any tourist surge in New York City but with Airbnb -maybe that natural ceiling is broken.  Bottom line?  There were many places we went to that were easily well beyond the maximum number of people allowed by City Hall.

There are few lessons for New Brunswick’s tourism sector to be gleaned from NYC but after hearing families screaming at each other as they elbowed their way through the cattle cars that were the streets of Manhattan, I realized that part of our tourism pitch should be opposite of the large urban pitch.  Less waiting, reasonable costs, open spaces, avoid the madness – come to New Brunswick.

That won’t dissuade most of us from visiting the centre of the universe but it it might make some folks think twice.


Me lecturing my kids on the PATH train from Newark to Manhattan.  Photo credit: Alice Campbell

Government incentives in the background?
I was surprised to read a job advertisement in Fredericton that openly discussed the Youth Employment Fund.  It states on three separate occasions that the firm is using the YEF to push up wages from slightly above minimum wage to $15/hour.  It looks to be some kind of warehouse/processing operation – retail fulfillment playing on the Amazon brand to reel in workers.

The YEF was set up to help firms hire young people and give them work experience to help advance their careers.  It wasn’t meant to be a structural and ongoing wage subsidy.  When I read this job ad – that is what I sense.  A firm that is looking to use government funds to push its hourly wage costs below minimum.  I hope not.   Using government support to provide internships, coop work and other experiential learning for young people to get experience learning a skill is a good thing.  Using it a kind of structural subsidy is not.

The ‘role of government’ grudge match
One of my favourite podcasts going back more than a decade has been EconTalk hosted by Russ Roberts.  Roberts is one of the leading voices among economists that believe government needs to be restrained and he has weekly guests across the spectrum leading to lively and thought provoking discussions.  He recently interviewed Mariana Mazzucato who is gaining traction in her call for a more robust role for government in shaping markets and fostering innovation.   It was a civil conversation although she claimed after she had to restrain herself.

My problem is that I find myself liking both points of view.  I think Mazzucato is winning many converts. Many people see the public interest in economic development and want government to play an active role.  On the Chinese end of the spectrum you have government declaring the country will the “world leader” in industry x or y within 20 years and putting massive resources against that goal.  That has a certain appeal particularly in areas that are falling behind.

Unlike most of my colleagues, I spend several years in university studying under professors pushing public choice theory and Austrian economics.  The prof that I worked for during my MBA program didn’t think governments needed to own roads and that private banks should issue money.  While these two specific examples seemed a bit strange to me I do remain a believer in free markets.   But at the same time I understand Mazzucato’s point of view.

What I find particularly interesting is that in everything I have read and heard she isn’t a virulent basher of capitalism and free markets.  She just wants government to play a more direct role when needed to drive innovation and the public good.

I never understood why many people wanting robust public health care systems, expansive social safety nets and excellent public infrastructure are also those quickest to bash markets and the profit motive.  If the goal is to have a robust enough economy to generate the tax revenue to pay for all this public largess you would think these folks would be staunch supporters of capitalism and celebrating innovation, the resulting surpluses and the tax revenue gleaned from them.  For some reason it is more likely for the advocates of strong publicly funded services to be bashers of capitalism and private industry.  This seems to me self-defeating.

This is not to say, as I have stated many times before, that all business is good, all entrepreneurs are noble, etc.   We have to be able to walk and chew gum at the same time.

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New Brunswick is (mostly) lit*, folks. Pass it on.

*Editor’s Note: The writer’s kids tell him that that the word ‘lit’ was previously used to define the state of a person who is mildly intoxicated. Now, it has evolved to generally mean something that is cool or amazing.

The other night my wife and I were out enjoying a nice meal at Gusto restaurant in Moncton when she casually mentioned that an ESL student of hers was surprised at how far behind the New Brunswick school system was compared to her home country in Latin America. I won’t mention the country in question because I don’t want to make this personal – I have a broader point to make. Apparently her eight-year-old son was doing advanced calculus in his home country while the New Brunswick eight-year-old kids were fashioning play dough during class time*.

*Editor’s Note: The writer is exaggerating here for effect. The eight-year-old student in question was actually performing three-digit multiplication back in his home country while the New Brunswick kids were supposedly still working on basic multiplication tables (e.g. five times five).

I proceeded to lash out at my wife with a tirade such as “if things are so great in that country…..” why is it’s GDP per capita 80% less than New Brunswick? If the education system is so great in that country, why are its PISA scores so much lower than New Brunswick?*

*Editor’s Note: The agitated defender of New Brunswick didn’t know at the time the country in question’s PISA scores. He is not Cliff Clavin from the old TV show Cheers. He just assumed. A quick check later confirmed that indeed this Latin American country’s PISA scores (while improving) are dramatically lower than New Brunswick for both reading and math. For those that know the PISA, an 80 or 100 point spread is substantial.

My wife made what was likely a series of sensible responses, but I was too busy angrily defending New Brunswick and expressing moral outrage.

Later, of course, I apologized to her and we had a rational conversation about my spontaneous outburst of rage.

The truth is that because of what I do for a living every day I hear constantly about New Brunswick’s challenges. We pay too much tax. New Brunswickers are lazy, entitled and hooked on EI. Young NBers have lost the work ethic of previous generations. We are resistant to immigration, technology and any kind of change in general. Governments are slow, lethargic and lack ambition. Our education system is in the toilet. We have terrible health care and health outcomes. People are fleeing the province in droves. On, and on, and on.  I guess it finally got to me and I took it out on my poor wife.

Give your head a shake*. I did. It helps put things back in perspective.

*Editor’s Note: Do not shake too hard. With the apparently outrageous wait times at the ER you might end up with a permanently addled brain.

We must be able to talk honestly and openly about our challenges in New Brunswick without throwing the baby out with the bathwater. Having folks from other countries move here and question things is a good thing. It is reasonably obvious that this lady’s young eight-year-old Einstein was likely attending a private school back in her home country*. When you compare apples to apples the outcomes from the NB education system are much higher than this unnamed Latin American country (not Brazil, by the way, for my outsized number of Brazilian readers).

*Editor’s Note: With my relatively limited exposure to international education systems it does seem certain countries still place a much higher focus on rote learning than in New Brunswick.  I’m not sure a majority of Grade 12 students here could rhyme off their multiplication table through 12 x 12 = 144.  

This doesn’t mean we don’t have work to do. We have lots of work to do in our education system. The risk in public education systems is towards a ‘leveling down’ to ensure everyone gets the same chance but the system – even a public system – should allow those with more drive to be far more challenged in school – pushed harder. There are ways to do this without compromising the vision of good quality public education. As I have said before, I think we could use a little more private K-12 education to keep the public system on its toes.

We have real issues facing us in the health care area but the gross domestic product (GDP) in New Brunswick generated by the health care is higher than the entire GDP from all sectors in the aforementioned but anonymous Latin American country. We spend a lot of money – private and public – on health care. We have eight health care workers for every 100 people living New Brunswick. There are certainly ways to improve and we need to do so but to equate New Brunswick’s health care system with 3rd world or emerging world countries is crazy.

The bottom line is that New Brunswick is a great place to live. Is it the best place in the world to live? I would be skeptical about any place that made such a claim*.

*Editor’s Note: Except La Jolla, California – that place seems to be just about perfect – if, and this is a big if, you can afford it. If you haven’t visited there, you should.

I have visited every U.S. state except Hawaii. I have visited every Canadian province multiple times. I have made over 30 international trips to nearly 20 countries and I would say that IMO (and, by the way, it is always IMO) New Brunswick is a pretty great place to live. The cost of living here is comparatively good. The commute times to work are hard to beat.  Crime rates are low (at least for violent crime). There is little corruption in government*.

*Editor’s Note: Yes, for you cynics, this is true. In a lot of places in the world, people go into politics poor and come out rich. In New Brunswick, people go into politics poor and mostly come out poor. After politics a few have gone on to become wealthy but for the most part politicians in New Brunswick don’t get rich because of their political connections.

So, let us continue to work on this place. It is a definitely a work-in-progress. We need stronger and larger urban centres. We need to flow in tens of thousands of immigrants and, yes, be able to take a little criticism from folks that have a different perspective. We need to rejuvenate our rural economy with more focus on agriculture, tourism and natural resources development. We need to reform EI – at least for the next generation.  We need to be more innovative and realize we are competing now on a global scale for people, investment, export markets and entrepreneurs.

But when it comes right down to it, fellow New Brunswicker, you are living in a place that affords most people a comparatively good quality of life.

Your situation might even be ‘lit’.

Ask a teenager to be sure.

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It’s time for economic development 201 or even 301

As you might expect, when I talk with people these days the main question I get is “how do we get the economy back on the rails?”  Usually this is in response to my presentation where I show New Brunswick is in the longest period of economic stagnation at least in the last 80 years as measured by GDP growth, business investment and labour market growth (decline).

For example, I had coffee with someone (a reader of this blog) who is adamant the solution is productivity.  New Brunswick’s economy is less productive (various measures) than other jurisdictions and therefore only a productivity revolution will ensure long term economic growth.  Other folks talk about the need to boost export revenue – flowing more money into our economy from outside.  Others fret about the lack of new entrepreneurs.

These are all good points, but I always bring people back to the question ‘why?’.

We need a deeper understanding of the fundamental value proposition that drives business investment, attracts and retains talented people and creates the conditions for new entrepreneurs to step up.

Right now the overarching issue is people.  I know I am a broken record on this but it is now the #1 reason why New Brunswick’s economy is not growing, IMO.  The Canadian labour market has added nearly 1.5 million workers since 2010 while New Brunswick’s has shed 11,200.

Growth/decline in the size of the labour market
November 2010 to November 2018
(seasonally adjusted)

000s % Change
Canada 1,462.0 +8%
New Brunswick -11.2 -3%

Source: Statistics Canada Table: 14-10-0287-01

But the bigger long-term issue is value proposition – specifically the rationale for businesses to invest in our province or people to stay and build their careers here.  We can’t buy this with government subsidies, we can’t just make a wish and hope nor can we rely on the munificence of local business people to keep investing even if it makes more sense for them to deploy capital elsewhere.   Sure, local people are more reluctant to move their capital – they feel a greater attachment to New Brunswick but in the longer run there needs to be a reason – a value proposition – for investing here.  I would say the same thing for the workforce.

The value proposition varies from industry to industry, but it comes down to things like cost environment, talent pool, infrastructure, tax and regulatory environment, natural resources and other geographically-based assets and other factors.

We can’t just pitch ourselves as a great location for business.  We have to see strengths and target industries and firms that would benefit from being located here.

Role of government

Whether we like it or not, many of our top export industries are significantly influenced by government policies. Here are the top 25 international merchandise exports from last year grouped by similar industries and the role of government.  These industries generated $12.2 billion worth of export revenue for NB:

Industry: Role of government:
Petroleum Refineries
Limited.  Environmental oversight, tax issues.
Seafood Product Preparation and Packaging, Fishing, Aquaculture ($1.7B international exports)
High.  Government sets quotas, regulates activities, decides who gets licenses, etc.
Paperboard Mills, Veneer, Plywood and Engineered Wood Product Manufacturing, Pulp Mills, Sawmills and Wood Preservation, Paper Mills, Other Converted Paper Product Manufacturing, Millwork, Paperboard Container Manufacturing, All Other Wood Product Manufacturing ($1.9B intl. exports)
High.  50% of land mass is owned by GNB.  Government decides who gets the wood – what, when, where and how.  Also, government owned utility sets price of electricity.  Governments sets environmental policies, etc.
Snack Food Manufacturing, Frozen Food Manufacturing, Vegetable and Melon Farming ($275M intl. exports)
Moderately high.  Government sets agricultural policy, determines quotas, subsidizes, etc.
Non-Ferrous Metal Rolling, Drawing, Extruding and Alloying
Moderately high.  Government sets environmental policies. Also, government owned utility sets price of electricity for this energy intensive industry.
Oil and Gas Extraction
Limited for LNG imports.  High for every other part of the industry.
Recyclable Metal Wholesaler-Distributors
Moderately high.  Government sets environmental policies.  If the big bangs at the SJ Port don’t get solved we could lose $135M in international export revenue.
Electric Power Generation
High.
Other Non-Metallic Mineral Mining and Quarrying
High.  Government sets environmental policies, crown licenses, First Nations issues, etc.
Other Plastic Product Manufacturing
Low.
Gypsum Product Manufacturing
Higher than you might think. Natural gas policies impact competitiveness and the source of the gypsum is heavily influenced by government.
Ventilation, Heating, Air-Conditioning and Commercial Refrigeration Equipment Manufacturing
Relatively low but a lack of assembly line workers has pushed investment out of NB.

So to pretend the government doesn’t have a role is to be naïve.  Government should be focused on ensuring that its policies related to each of these industries are competitive with other North American jurisdictions.   Benchmarking should be routine.

The overriding focus of economic development should be value proposition.  What are we selling?

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Is there no social acceptability for oil in Quebec?

There must have been something lost in translation.  The Premier of Quebec is quoted in the English media as saying “there is no social acceptability for oil in Quebec.”  Hmmm.  Let’s see:

-There are more than six million light vehicles registered in Quebec in 2017 (Source: Autoconnex). This excludes every other kind of vehicle.

-There are nearly 3,000 gas stations across the province (Source: Statistics Canada).

-Motor gasoline use (final demand) in Quebec was higher in 2016 than it was back in 2008.  (Source: Statistics Canada).

-Diesel fuel oil (final demand) in Quebec was higher in 2016 than it was back in 2007.   (Source: Statistics Canada).

-Total use of refined petroleum products was higher in 2016 than it was back in 2010.  (Source: Statistics Canada).

-Quebec generates twice as much GDP from petroleum refining as does New Brunswick (Source: Statistics Canada).

-Refined petroleum products are Quebec’s 7th largest international export industry (5 digit NAICS) with over $2 billion worth in 2017 (Source: Trade Data Online).

-Crude oil is the province’s second largest international import ($5.2 billion in 2017).(Source: Trade Data Online).

-There are over 12,000 km of provincial natural gas and oil transmission and distribution pipelines (Source: NR Canada).

 

I think it is fair to say there is lots of “social acceptability” for oil in Quebec.  There just isn’t social acceptability for a pipeline bringing Alberta and Saskatchewan oil to the Maritimes.

Those are not the same.

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New Brunswick’s new 60/20 rule

You are familiar with the 80/20 rule which can be applied in many circumstances such as 20% of customers account for 80% of revenue or 20% of volunteers do 80% of the volunteer work, etc.

In New Brunswick, I would posit another rule is starting to take shape – the 60/20 rule.  No, I haven’t lost my ability to sum basic numbers nor is there a missing 20 percentage points.  My 60/20 rule is not a percentage.  It is a raw but hard numbers game.

In 1971 there were 351 people living in New Brunswick under the age of 20 for every 100 aged 60 and older.  In 2017 there were 70 under the age of 20 for every 100 aged 60 and older.  Of all the demographic and socio-economic changes in New Brunswick over the past 40ish years, this one is arguably the most profound.   By the way the breakeven point – was only in 2007 – the year there were the same under 20 as over 60.  Now the trend lines are diverging in a significant way.

What does that mean?  Well, it means the median age of a voter in New Brunswick is now around 56-57 based on my estimates.  To define it – half the voting population (assuming voting shares by age remain similar) is over the age of 56.  To suggest age does impact how people vote would be quite naive.

I’m not suggesting there is all out war between the grannies and the Beliebers (Google it, grannies).  In fact, I would say that anyone over the age of 60 would be highly offended if it was suggested they put their own interests ahead of the kids.

But there is something called human nature.  I would suggest the 60/20 rule is impacting views on immigration, on any kind of government reform – health care, education, municipal government, and particularly on economic development.

I still remember that CBC reporter who went out to Stanley a few years ago and asked folks in a coffee shop/restaurant what they thought about the Sisson Mine.  Most of the responses (at least then) were quite ambivalent – one lady said something to the effect that there was no one out there now that needs a job in the mine but maybe it would bring young families into the area.

Imagine in 1971 if a firm was proposing a new $600 million mine and hundreds of jobs paying 70% above average.  I would suggest at least among most there would be jubilation.  Now, at a minimum a collective shrug- the more recent public engagement out there has been sharper with people who have moved into the area to retire suggesting the reason they moved here was to be left alone to retire in peace (paraphrased).

How do we break the 60/20 rule?  It’s a challenge but I hope that older NBers (I just passed the 50 year mark this year) keep an open mind as young people and families flow into their communities from elsewhere in the world, or someone proposes a new economic development opportunity, or someone wants to undertake some potentially risky but innovative approach to public service delivery (Sackville 2020 for example), or politicians use dog whistle politics to rile them up to muster votes.

The long term risks are equally damaging to the over 60 population as the under 20s.   A weak economy not generating enough tax revenue to pay for high quality public services and infrastructure will hurt us all.

 

 

 

 

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Living in a Hallmark world – a competitive advantage?

I have a bit of a confession to make.   I like cheesy Hallmark Channel movies (shown on the W channel here).

I know, I know.  You will mock me. Your opinion has tanked.  I get it.

But I still like them.

A couple of years ago I found out that my wife and youngest daughter were watching these movies as a pastime and they never asked me because they just assumed I would say no.

Like most dads, I worry that I am not spending enough time with my kids so I acted indignant and started watching.  And started to like it.

Quite frankly the world is complicated.  I am pummeled in my social media with anger, resentment, frustration, apocalyptic warnings, and it turns out a little pulp on the TV is just what the doctor ordered.

The stories are fun and unapologetically formulaic.  Almost always featuring adults aged late 20s to late 30s (mostly child or teenaged stars that are looking to get back on the rails), usually one of them has kids, there is always – always a bucolic small town involved.  There is a little tension, then resolution – and always 98% of the time the first kiss occurs with no more than 5-10 minutes to go in the movie.

The movies are almost always set in the U.S. but shot in Canada as evidenced by the supporting actors/actresses and by the occasional slip up such as showing a .ca domain name advertised on a display window.

The other day my wife recognized a scene as being set in a North Bay cafe and, sure enough, with a little Google search we confirmed the location.

That set me thinking.  Could emulating the Hallmark world be a competitive advantage?

Think about it.  The mayors are always nice to everyone.  Everyone volunteers in these movies.  Everyone is nice on the streets.  The city folk almost always throw away the high flying professional careers to move to the small town.

Imagine if this was true.

Now, I’m not talking fake or forced such as the hilarious 1988 Chevy Chase movie Funny Farm in which a city couple move to a small town only to find they have been duped.  In frustration they decide to sell and move back to the city and offer $50 to everyone in the town who helps them sell the place.   There is a great scene where the “cue the deer” and a family of deer walk through the backyard just as Chase is promoting the house to a prospective buyer.

No, I’m talking about a community – large or small – deliberately being a nice place to live.  Neighbours introducing themselves to the new immigrant family that just moved in next door.   People offering to help newcomers solve problems.  Inviting newcomers over for dinner.  Shockingly friendly.

Don Mills has been saying Maritimers are friendly but not open (or something that effect).   It’s hard to generalize but I think he has a point.  In communities with large outward migration but limited inward migration lifelong friendships are mostly made in middle and high school.  It’s hard to ‘break in’ if you are a come-from-away.

But in 2018 the competition for strong and vibrant economies is more based on the ability to attract and retain talent than it is attract investment and entrepreneurship.  With the talent, investment and entrepreneurship withers on the vine.

So instead of investing in all the traditional things, why not invest in offering a course on how to be friendly?   Or being a mentor to a newcomer living in your city or town?  How about fostering block parties, neighbourhood picnics, guess who is coming to dinner events?

Sure, this is a little softer than my usual schpeel but economic development now comes down to people and people are far more influenced by relationships than anything else.

 

 

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