Albert County: The spark that started a 170 year global economic renaissance?

There is a fascinating story in the Times & Transcript this weekend about Albert County and its role as the “birthplace of the petroleum industry”.  He is making his pitch and getting traction.  The Petroleum History Institute is “making a pilgrimage to what they consider the birth place of the industry” next week.   In 1846 an Albert County entrepreneur and innovator developed a method that turned Albertite into kerosene for lamp oil with a byproduct that was gasoline.  It replaced whale oil – the use of which had led to the near-extinction of whales.

Not mentioned in the article was the Albert County gas which powered the Moncton economy for a generation more than a 100 years ago.  In fact, I read one of the guys behind the oil and gas industry in Albert County packed up and went down to be part of the original U.S. oil and gas industry in Pennsylvania.

So it all tracks back to Albert County.  The spark that ushered in the petroleum age.  Cars, air travel, cheap electricity to drive global economic growth and prosperity.

Of course, the folks from the Petroleum History Institute may want to keep their heads down when they visit the place these days.  Oil and gas are not particularly appreciated words these days in the birthplace of petroleum.

I don’t know what I like most about this story.  Certainly, reading a positive story about petroleum these days is a miracle in itself.  My Twitter feed was filled with advertisements for the oil pipeline expansion announced last week but the word ‘oil’ was never mentioned.  The pipeline, you see, is going to get “our resources to market”.   I guess we will pump 2x4s or soybeans through that new pipe.

Of course it’s hard to be too critical of politicians.  Words these days can be both very cheap or very expensive.  Anyone that disagrees with someone else is a Nazi or a racist or a bigot – words that get tossed around with ease.

I guess the PMs marketing gurus think that people with read the word ‘resources’ and think happy thoughts.

I guess my real point is a recurring theme on these pages.  The loss of civilized debate.  There was a time when people advocating for rigorous plans to address climate change would focus on trying to convince those on the fence of the merits of the effort.  Now, anyone raising a question is an idiot.

Look at the offshore oil and gas industry in Newfoundland and Labrador.  I was over there last week and I asked people in the hotel, in the coffee shop and the taxi  what they thought of the industry – overwhelming support, even excitement about the possibility of a big expansion of the industry. Try that here. Now before you retort that fracking has received a frosty reception in Newfoundland as well, I will preempt you by saying this is exactly my point.

When it comes to the biggest policy issues of our time: climate change, immigration, mining, oil and gas development, globalization, economic fairness, the fiscal sustainability of public services, whatever – we need to get Don Draper, et. al. in the room.  We need to get back to civilized debate, the back and forth that is needed in democracies.

People that are opposed to you are not the enemy.  This is not the grand arena (note the reference Serenity geeks), this isn’t a struggle of good versus evil.

If you ever meet a real Nazi, you will know and you will regret having called lesser people by that name.

I’m up for the debate.  I think we will need oil and gas until at least mid-Century and I think Canada should supply its share of global markets.  I think if you have your own minerals and oil/gas resources, and you can develop them safely – relative to global best practices, you should.  Importing them doesn’t help the planet.

I also think we need a robust response to climate change.  We should use some of the economic dividend from ‘resource’ development to significantly reduce our carbon footprint, and, despite the maligning of Sheer last week, we should join with other countries to link the global effort to reduce carbon emissions to international trade and investment flows.  Why not?   I realize it will be tricky but I wouldn’t rule it out.  Just boycotting oil and gas to feel good is not the solution.  A coordinated plan is.

I think we need a whole lot more immigrants.  I realize there are those that are uncomfortable.  They, at least mostly, are not the enemy.  They need to be part of a healthy debate with facts.

I could be wrong.  Maybe in the world today the best way to get things done is by alienating everyone that doesn’t think like you do.  Maybe making enemies and drawing the line “you are either with me or against me” is the new norm.

It’s not good in a democracy.  That attitude is better aligned with fascism.

 

Posted in Uncategorized | Leave a comment

Will Atlantic Canada finally become a hotbed for IT?

I still remember a speech given by former PM Jean Chrétien in the mid 1990s talking about the promise of the information technology (IT) sector.  He said that unlike manufacturing or transportation or even other services that are based on population density, the IT industry could be done ‘anywhere’.  It would help level the playing field for economic development across Canada.  The smallest urban centres could now compete with the largest.  It was a brave new world (I am paraphrasing).

After the PM’s speech, as I have written multiple times before, total IT employment in Canada actually concentrated more in the largest urban centres. Between 2001 and 2016, the Toronto CMA increased its share of IT workers from 28% to 29%, Montreal from 14% to 15% and Vancouver from 8% to 9%.   Ottawa, interestingly, saw its share decline sharply from 100 out of every 1,000 IT workers across Canada in 2011 to 73 per 1,000 in 2016, a relative decline of 27%.

The point, made by many IT experts then and now, is that while IT work can be done anywhere, like so many industries, it tends to concentrate – or cluster – in certain areas that have a strong value proposition: talent pipeline, access to risk capital, access to large potential clients (not requiring a flight and long cab ride), etc.

So when I read this week that Atlantic Canada was ranked by Startup Genome as one of the top locations in North America for startups, I get excited.  Do we now have the value proposition to fulfill the promise of the IT industry?

The data suggests that for the most part the IT industry has not lived up to the promise for smaller regions, particularly in New Brunswick where, real ICT GDP growth from 1997 to 2018 was the slowest among the 10 provinces in Canada.

Look at the number of IT firms* by province, adjusted for population size.  NB has 34 IT firms per 100,000 population compared to 100 per 100,000 across Canada. If you look at firms by employment size, NB has fewer across each employment range, although interestingly the closest gap is in the 100+ range.  New Brunswick has 11 IT firms with at least 100 workers. But it is clear New Brunswick is not churning out nearly as many small IT firms and there are not enough scaling into the 10, 20, 50+ range of employment.

Now, I always get push back when I focus on GDP, firms or employment.  The real measure, I am told, is export revenue.  Is the region’s IT sector generating solid export revenue (as opposed to serving local markets).  Well, the export data shows a fairly good picture for NB, NS and PEI compared to Manitoba and Saskatchewan but overall the picture is not as strong.  Over the 2013-2015 timeframe (the most recent we have), NB IT firms generated an average of $317 in export revenue on a per capita basis which was less than half that in Quebec, Ontario and BC and lower than Alberta.

International and interprovincial export revenue, IT commodities**

So, if we are indeed an excellent place for start-ups and scale-ups, let’s fulfill the promise.   Let’s sell this value proposition to the world.  Let’s bring in world class entrepreneurs to build their businesses here.  Let’s use this important sector as a driver of economic growth.

If the IT industry (startups) is really poised for growth, we should start to see an increase in small IT firms relative to other provinces and right now, we aren’t.

*Firms in NAICS 511211 – Software publishers (except video game publishers) 511212 – Video game publishers 518210 – Data processing, hosting, and related services 541514 – Computer systems design and related services (except video game design and development) 541515 – Video game design and development services.  Source: 2018 Business Counts. Statistics Canada.
**Includes: General purpose software [MPS511200], Fixed Internet access services [MPS517004], Data processing, hosting, and related services [MPS518000], Subscriptions for online content [MPS519001], Internet advertising [MPS519002], Custom software design and development services [MPS541501], Computer systems design and related services (except software development) [MPS541503].  Source: interprovincial and international exports by commodity, 2015, Statistics Canada.
Posted in Uncategorized | 1 Comment

You want to retain population? Restrict immigration. Warning, this will come with a cost.

There is a lot of focus these days on immigrant retention.  We have a new source of data, Medicare cards, to help us track the flow of new immigrant populations within Canada.

In fact, population retention – not just immigrants – is the real goal.  If you retained all new immigrants but saw a big spike in those born-in-Canada leaving your province or city it would kind of defeat the purpose of attracting newcomers in the first place.

And we have a good data source, and timely, on interprovincial migration.  It comes out every year and estimates how the population changed based on net interprovincial migration (the difference between those moving in and out).  This, I would argue, is a key statistic on retention even though we don’t know for sure the breakdown of immigrants and non-immigrants in the flow.

What we do know for sure is that most areas that have witnessed a large increase in immigration have also seen an increase in their outward migration rates.  Please note the data below is based on interprovincial migration, not intraprovincial migration which is also an important statistic but for this analysis we are worried about people leaving the province, not the city.

Look at Charlottetown and Fredericton.   Two urban areas with significant increases in immigration in recent years (Charlottetown the highest rate in Canada, Fredericton the highest rate in New Brunswick).  However, at the same time they both witnessed large increases in outward flows through net interprovincial migration. Charlottetown lost an average of 317 per year (net) over three years and 424 per year (net) over five years. Fredericton lost 498 per year over three years and 608 per year over five years. The chart shows the rate per 10,000 to allow for comparison.

So, the wrong takeaway from this would be that we need to restrict immigration to curb outflow.  The right takeaway is that when newcomers come there will always be some that leave for a wide variety of reasons and we can’t use that as an excuse to curb immigration.  We need to have a robust retention strategy for immigrants (which starts with better targeting those with the best potential for retention in the first place) but we can’t retain them all.

Both Charlottetown and Fredericton have strong population growth in recent years in large part as a result of immigration so they are retaining a lot (see below).

And for those that are worried about the impact on outward migrants on the rest of Canada, don’t fret.  All of the outward migration from Atlantic Canada is basically a rounding error when it comes to the three large urban centres (presumably the destination of many of Atlantic Canada’s outbound migrants).

Campbellton, Miramichi, Bathurst – all have positive net interprovincial migration in the past three years.  But this is not necessarily good, very few are leaving and very few are coming.  Edmundston’s three year average annual net interprovincial migration is -14 (actual number, not the rate).   On a regional population of over 24,000, net interprovincial migration of 14 means there isn’t much there.  Now the good news for Edmundston particularly is that its population ticked up in 2018 slightly compared to many smaller urbans that are losing population.   It seems to be attracting more from elsewhere in New Brunswick and it does attract a few immigrants each year.

The gold standard is Halifax which has seen an increase in immigration and has a positive net interprovincial migration rate.

So don’t ignore interprovincial migration. It does matter.  Greater Moncton’s very low negative net interprovincial migration rate is interesting given it has seen a steep increase in immigration.  The chart below shows the relationship between net interprovincial migration and immigration.  Charlottetown has lost 16 per year over the past three years (net) to interprovincial migration per 100 new immigrants attracted (please remember these interprovincial migrants are not necessarily immigrants).  Fredericton has the second highest rate of lost population to interprovincial migration, expressed this way, but again, look at its immigration rate.  It’s high.  The trick is to boost immigration and retain population (limited net interprovincial migration).  That is hard but Halifax has done well, Moncton well too -although it’s immigration rate will likely require a boost if it is to continue growth in the coming years.  Saint John’s outward migration rate is better than Charlottetown and Fredericton but likely because it has attracted fewer immigrants to lose.

Ultimately, what are the fastest growing urban centres in Atlantic Canada?  For the most part, those with the biggest increase in immigration.  You can fret about the immigrants that have left Charlottetown or you can celebrate the fact the urban centre has the fastest population growth in all of Canada, among urban centres with a minimum 25,000 population.

So, what are we to deduce from all this data?  You can’t make an omelette without breaking a few eggs.  We need a lot more immigrants in this region. Some will leave.  Let’s put in place world class retention efforts.  Let’s embrace our new neighbours with a great big bear hug (except certain cultures).  But let’s not use the fact we lose some to the large urban centres as a reason to limit immigration.

Posted in Uncategorized | Leave a comment

Are we losing the art of persuasion?

I love Terry O’Reilly’s CBC show, Under the Influence, but a much preferred his earlier title for the show “The Age of Persuasion”.    In our modern times, influence is a much more pejorative term than persuasion.  When I am trying to persuade you of something I need to convince you, make good arguments, warm you up.

Influence is something difference.  Even if you don’t like me.  Even if you really don’t like my position on an issue, if I have influence over you – your boss, an authority figure, peer pressure, etc. – you might agree with me without persuasion.   In fact, persuasion may never be part of the equation.

I understand that O’Reilly’s show means influence in a more indirect way but I still prefer persuasion, particularly these days.

These days our public debates are increasingly positioned as a battle between good and evil.  We don’t have opponents, we have enemies.  If someone is unsure about climate change, they are just stupid.  If someone is uncomfortable with increasing immigration, they are racist.  If someone supports some type of resources development they are to be treated like an enemy.  And this “you are either with us or against us” approach is implied in just about everything.

We live in a democracy, folks.  If you want to shape public policy, or by the way, get just about anything done in a democracy, you need to get buy-in.  You need to convince enough people that you have the right ideas.

With few exceptions, you don’t face an enemy. You face someone with a different view that you.  Sure, there are people that have views similar to Nazis.  But before you call someone a Nazi, they should have basically advocated Nazi ideology and actions.  If you call everyone who wants to limit immigration a Nazi, what label is left for the real Nazi?

Words matter, now more than ever.

Let’s try and get back to the difficult but ultimately more robust process of persuasion.  Ramming through policies through intimidation, threats or undo influence is not the best way to get things done.

 

Posted in Uncategorized | Comments Off on Are we losing the art of persuasion?

Make no mistake, the Boomers are critical to our future

One of the interesting aspects of the iconic TV series Mad Men is its portrayal of age in the 1960s.  When looking to position the ad agency as youthful, Duck Phillips decres how old the core team is (average age late 20s) and bring in young hipsters (early 20s) because they understand what young people want.  Jane’s birth certificate is posted on the board and the other ladies make fun of her because it turns out she is 30 (and single, shockingly).  Roger Sterling is playing someone in his 40s but you wouldn’t know it.

Fast forward to 2019.  There is Fred.   Fred works at Costco in Moncton and though it would be impertinent to ask his age, he is easily in his mid 70s and just as chipper as a ’16er’ as my father used to day.

Not that long ago, Fred would have been looked down on.  Why must he work?  What is wrong with our public pension system that a mid-70s man is working, shockingly?  As shown in the chart below, as recently as 20 years ago only four percent of people aged 65 and older were in the New Brunswick labour market.

Nowadays, just about every time I use the term ‘challenge of an aging population’ or something similar, I get comments, emails and telephone calls from New Brunswickers of a certain vintage decrying my view that they are a ‘problem’, are intransigent and using political power to ensure that public spending is biased towards their needs.

My response, as I have repeatedly stated on these pages, in opinion columns and in public speeches, is that older New Brunswickers are an asset and should never be viewed as a liability. They worked their careers and paid taxes, volunteered in their communities, raised families and are now transitioning into new and important roles.

The social contract in this province is founded on the idea that people work hard for xx number of years, pay more taxes (on average) than they consume in services (on average) so that when they retire and pay less taxes (on average) and consume a lot more in public services (on average, mostly health care). This spending is completely appropriate because when they were working they paid surplus taxes (on average) precisely to ensure (implied) they could get good quality public services now that they are paying less taxes (on average).

But this whole paradigm is predicated on having enough young people (or high income earners) in the workforce paying surplus taxes (relative to their consumption of public services).  Which is why we are having the whole debate these days about bringing in immigrants, developing new industries, fostering more entrepreneurship and why we need older New Brunswickers to be fully supportive of this.

Boomers and work
Boomers were born between 1946 and 1964 and are now between the ages of 53 and 73.   There are 238,000 of them living in New Brunswick right now and they will likely live, on average, into their late 80s and many well into their 90s (nod to Fred, above).

Why are relatively few working after 65?  Look at the labour market participation rate among persons 65 and older in New Brunswick.  It was around 11 percent in 2018 (or 11 out of 100 people over the age of 65).  To put this in perspective, if we had the national la labour market participation rate there would be nearly 5,000 more working in an average month during 2018.

If we had Saskatchewan’s participation rate there would be nearly double working, or an additional 14,000 workers. If we could keep a 20 percent labour market participation rate through 2035 and the workers were distributed to industries needing them it would dramatically reduce the need to attract people to the province (there are many other benefits to attracting people beyond short term workforce needs, however).

Right now there are about 16,000 people over the age of 65 active in the labour market.  Trough 2038, if we had a 20 percent participation rate among this age group that would add an estimated 29,000 workers to the labour market by that year.

The public pension system is structured to discourage work after 65, in general and in very specific ways.  If people want to work part time or seasonal they can have payments and benefits clawed back.  In addition, New Brunswick is a relatively low cost place for seniors to live.

I don’t advocate policies that would force people to work – although reassessing the age at which public pensions (and public sector pensions) kick in should not be a taboo subject.  I have a  friend who retired as a teacher in his mid 50s.  He’s now in his early 80s.  He could (and likely will) live into his 90s meaning he will have been drawing an inflation indexed pension for far more years than he worked.  That has been changed.

I would like to see more policies (public and company-specific) that encourage older New Brunswickers to stay in the workforce but on their terms.   They could be a valuable source of workers for the seasonal tourism industry.  They could be tourism operators after they finish their first career.  They could be part owners/investors in small firms. If someone wants to work fewer hours per week, less days per month and less weeks per year, companies and organizations should adapt.

Boomers and volunteering
Beyond labour market participation, older New Brunswickers are an important source of charitable givers, volunteers, mentors and are able to give of their talents in a wide variety of ways.  There is some data that would suggest older NBers are less charitable these days (on average).  The share of the population aged 65 and older that indicated they had made a charitable donation on their tax form in 2017 had dropped by over six percentage points over a 20 year period.  For those aged 55 to 64 the drop was more significant declining from 30.5% in 1997 to 20.7% in 2017.  This might have something to do with the decline in church attendance (I don’t have the data to confirm this). Nevertheless, even if the amount of charitable donations goes down as a person shifts to retirement income, I would suggest continued charitable giving is a good thing.  We need more social and community engagement now than ever.

The last time Statistics Canada published data on volunteerism was a number of years ago so we don’t know in 2018 if 55+ volunteering is going down or up.  I would just say we need Boomer volunteerism across the province.  If people are retiring 25-30 years before passing on nowadays that leaves a lot of years for volunteering.

Mentoring
Boomers have built up a career of knowledge in their chosen field and I would like to think we could see even more mentoring of young people in those careers.

Boomers and political power
On this point, I would just say for those seeking public support for immigration, new industry development and other activities that might cause people inconvenience, proponents have to make a strong case.  Thirty or 40 years ago when the median age was in the early 20s people wanted work so they could stay in their community.  There was substantial support for mining, forestry, etc.  Now the dynamic is different.  It just is and the approach to gaining public support is different.

Boomers will play an important role in our future.  If they push for immigration, new industry development and entrepreneurship renewal in communities across the province it is far likelier that things will get done.  If they play a more direct role in these areas, there is a good chance that local economies around the province will strengthen in the years ahead.

Posted in Uncategorized | 2 Comments

Seeking a rural and small town entrepreneurial renaissance

I only knew Zita Cobb by reputation until I was asked to sit on a panel discussion related to productivity for the Public Policy Forum in Halifax recently.  Zita was sitting to my left and after I gave what I would suggest was a standard economist view of productivity, she spoke and essentially took offense with my cold blooded view of labour productivity.  We had a good back and forth on this which pepped up the audience a bit.

But I was really interested in a conversation I had after with Zita about her efforts to rejuvenate the economy of Fogo Island (population 2,700).  In addition to her now world famous inn, she has put in place a development organization focused on fostering more entrepreneurship and economic development on the Island.

I have written about this before.  I am concerned about the decline of entrepreneurship in rural New Brunswick (and beyond).  In recent years, there has been a fairly steep decline in the number of self-employed people in rural New Brunswick.  As the population ages, there seems to be fewer that want to own their own business and that could have significant impact on the quality of small town life around the province.  

I know there are those who would prefer that everyone commute into the cities for services.  I am not of that view.  If there is a market for services in small towns, I think local communities should step up and find entrepreneurs to fill those needs.  A town of 3,000 or more with an additional population in surrounding rural communities could  have enough demand for a dentist, restaurants, an inn and a host of other services.

Beyond local services, most communities have other advantages that could be exploited for economic development.  They could be related to agriculture, natural resources, tourism or other sectors.  But who is working on this?   I am calling for a Zita Cobb-like development committee in all small towns across New Brunswick. This group, made up of local leaders but also some external expertise, would be tasked with identifying potential entrepreneurial ideas that could work and then shopping them to potential entrepreneurs. They would systematically study gaps in local services and potential export-based opportunities and then expose these opportunities to potential entrepreneurs.   Provincial and federal government agencies could come alongside to help fund value proposition development and promote opportunities to entrepreneurs (local, national and international).

Folks in urban centres might shrug and say why bother?   I think this  is shortsighted.  New Brunswick needs an all hands on deck focus on economic development and population renewal.  If there are opportunities in small towns and rural areas they should get focus.  I’m not talking about large subsidies to woo industry to the hinterland.  I’m talking about a focused effort to exploit opportunities that could be there but no one is working to clarify the opportunities or to promote them to potential entrepreneurs.

A Cabinet minister from a rural area told me once that every time there is a new job creation announcement in Moncton he loses votes. If we want province wide support for a focus on urban growth and the attraction of people to drive that growth, we should support efforts to foster growth in small towns too.

There is no guarantee that any community will survive long term but at least we should put the tools in place to ensure these communities can take control of their own destiny and have a fighting chance at survival.

 

Posted in Uncategorized | 1 Comment

The kids (and most of the adults) are all right: Thoughts from my whistle-stop tour of the Maritimes

I just completed a seven week period that included 12 public speaking engagements in all three Maritime Provinces (not including presentations of client work).  I talked with industry groups including construction and forestry, spoke about immigration, labour markets, productivity and the idea of boosting New Brunswick’s population to one million+ by 2040.  I presented to a couple of economic development groups.  Overall I must have talked with a couple of hundred folks from across the region.

PPFAtlanticDinner2019

My conclusion?  Most people are feeling pretty good right now across the Maritimes.  I can’t speak to mental health, access to health care or other big issues but as far as economics go I conclude it has likely never been better for the average person in this region.

Everywhere I went people were complaining about how hard it is to find workers.   Governments in all three provinces have mostly balanced the books. Immigrant numbers are up in all three provinces.  Population, labour force and employment are all growing again (albeit slowly in New Brunswick in particular).  In my opinion, just about anyone that wants a job can find one today.  It may not be exactly what you want but there is almost no reason to be unemployed today if you don’t want to in most areas of New Brunswick.

Average weekly wages are increasing faster than the country as a whole in all four provinces.  In the past four years, average weekly wages have risen by 7.9% in NB, 7.1% in NS, 6.8% in PEI and 6.1% across Canada (February to February, seasonally adjusted).

In New Brunswick, average weekly wages have reached almost parity (or more) with the national economy in multiple sectors including transportation and warehousing, retail trade, utilities, information and cultural industries, real estate, education (well above the national level) and health care.  Although wage growth has been lagging in accommodation and food services in NB and NS.

But that isn’t to say there are not challenges.  Employment insurance dependency is much higher here, distorting the unemployment picture and leading to Ottawa continuing to question our need for immigrants.    That’s a bit like parents feeding their kids burgers and pop every day and then scolding them for being overweight.  In non CMA-CA areas (outside urban areas) the share of those earning employment income that also earned EI income in 2016 was much higher than the national average. In New Brunswick 38% earned EI in 2016 and, more importantly, that was the exact same rate as a decade ago.

There is hope on the population front as evidenced by Prince Edward Island.    I call it the Benjamin Button effect. PEI’s median age peaked in 2016 and has gone down slightly in the past two years.  That means the provincial population is actually younger after decades of getting older.  Look at the chart, Manitoba and Saskatchewan were younger in 2018 than they were in 2009 and 2007 respectively (as measured by median age).

The flip side of this relative comfort is a lack of urgency.   I hearken back to the protesters in Albert County a few years ago that had recently retired and “wanted to be left alone”.  There are 50,000 more retirees now in New Brunswick than there were just a few years ago.  That changes things.  People who are retired have different priorities than those in their 20s and 30s.

Think about this statistic for a moment.  There are more people collecting Canada Pension Plan in New Brunswick than everyone working below the age of 44.   More than 201,000 collected CPP in 2016 while 185,000 between the ages of 15 and 44 were employed. This profound shift cannot help but influence politics and economic development.

My hope is that most retirees in the Maritimes still care about their communities beyond just the provision of services for seniors.  I hope they won’t block efforts to bring in immigrants or stimulate new industries.  I hope they will continue to support investment in education and other efforts to boost the skills and engagement of young New Brunswickers.

The median voter in the Maritimes is somewhere in the range of 55 years old.  Our goal should be to bring that down in the coming years.  This will benefit both the old and the young.

 

Posted in Uncategorized | Comments Off on The kids (and most of the adults) are all right: Thoughts from my whistle-stop tour of the Maritimes

Building Herb Emery’s empire of thought

I have mentioned before my admiration for the current Vaughan Chair in Regional Economics at UNB.  He is getting involved in just about every possible issue that relates to economic development in New Brunswick.  He is working on productivity, immigration, language, urban/rural, trade.  He developed a set of measures for NB economic performance similar to the One NS indicators published in Nova Scotia.

I think one of his tools has been to utilize grad students.  He can amplify the scope of work by focusing their efforts.

Now I see he has added something called the JDI Roundtable on Manufacturing Competitiveness in New Brunswick.  This is an important issue as the future of manufacturing in places like New Brunswick is uncertain due to labour market challenges, rising costs and increasing global competition, not to mention a lack of young entrepreneurs going into the manufacturing business in the first place.

It looks like Herb is marshalling an army of aspiring economists to take on research relevant directly to the New Brunswick economy.

We have come a long way from the days when you could expect one or two academic papers per year on subjects such as”Intergenerational Dimensions of Canada’s Fiscal System”.  Don’t get me wrong, there is certainly a place for academically oriented research and it will help, I suspect, in the longer run with policy development.  But we have challenges right now – with 1, 2, 3 year time horizons that we need intellectual horsepower to help us address.

Bravo.

Posted in Uncategorized | Comments Off on Building Herb Emery’s empire of thought

On immigration, here comes Toronto again. The rest of Canada beware.

One of the things that was interesting about the growing inflow of immigration into places like Manitoba and Prince Edward Island was that there was a corresponding decrease in immigrant flows into the largest centres.   The Toronto CMA inflow dipped from an average of close to 100,000 per year (immigrants and net non-permanent residents) down to 87,000 in 2014 and only 68,000 in 2015.  Now the numbers are roaring back and in 2018 rose to nearly 150,000. In Montreal, the numbers had dipped from an annual average of 50,000 between 2007 and 2013 to 43,000 in the next three years before rising again and hitting a record 77,000 in 2018 (François Legault notwithstanding).  Vancouver dipped all the way down to 26,000 immigrants and net NPRs in 2015 before starting to rise again and hitting a near record of 49,000 in 2018.

What does this mean for all the other regions in Canada looking to boost their immigrant numbers?

The federal government needs to set immigration targets as a role up of provincial need – not as the result of some macroeconomic model – top down.  Yes, it will be a little more messy but it is the only solution.

I’m not opposed to boosting the non-permanent residents (temporary foreign workers) if there is a demand for them but if you are doing this as a backdoor way to keep down the annual immigration number, that is not good.  Look at the trend in non-permanent residents by year in the urban centres across Canada (combined).  By the way Toronto, Montreal and Vancouver accounted for 94,000 of the 160,000 net non-permanent residents.

If Toronto needs more labour, giddy up.  But don’t penalize the rest of Canada.  Make sure there is enough of an inward flow for all.

 

Posted in Uncategorized | Comments Off on On immigration, here comes Toronto again. The rest of Canada beware.

Goin’ down the road: cough, cough, is good for the Canadian economy

One of the topics I have written the most about over the past 15 years has been the thorny issue of interprovincial migration, or the non-technical term “goin’ down the road”.  Take your pick: the exodus of young Atlantic Canadians to central and western Canada, the move of young people from rural to urban centres, and now, the risk of losing new immigrants to migration elsewhere in Canada.

The truth is that most economists would suggest that labour mobility within a country is a good thing.   Like freer trade and investment flows, labour mobility – at least in theory – is a sign of a flexible labour market – moving surplus workers in one jurisdiction to areas where there are lots of jobs.

The chart below shows the share of the population (aged 5+) in 2016 who lived in another community five years earlier (in 2011).  This includes those who moved within their province (from one municipality to another), those who moved interprovincially and those who moved in from another country.  Across Canada, 5.7 million people moved in just a five year period.  That is a substantial flow of people from jurisdiction to jurisdiction.

As I have written multiple times, the problem is that in the short run, this kind of flexibility in the labour market is a good thing but chronically it can be very hard on the exporting jurisdictions.  New Brunswick, as an example, will spend something like $250,000, in tax dollars to get someone from birth through university only to have them move to Ontario, BC or Alberta after graduation where they finally start paying taxes.  If you counted up all the net interprovincial migration over the past 40-50 years it would mean New Brunswick taxpayers subsidized to the tune of billions of dollars, workforce development for Ontario, et. al.

But the truth is that small jurisdictions will always face this problem for a variety of reasons and my new thinking is that we shouldn’t be so fussed about it.  In particular, the federal government should not tie our immigration numbers to a high level of immigrant retention.  It is a given that some share of new immigrants to this region are trying to get into Canada and using Atlantic Canada as the easy way in.  We should assume this.

Now that doesn’t mean we shouldn’t be very diligent in our immigrant recruitment – focusing on those with the skills, interest and aptitude for the jobs on offer here (i.e. don’t recruit economists for jobs in call centres) and other retention factors such as having family and friends here.  We should.  I have argued we should aspire to be the most welcoming place in the world for immigrants – as a differentiator.

But some will leave.  Just like many people in the past.  For whatever reason – careers, desire to see somewhere else, the view that grass is green elsewhere, or for the plain old reason they can’t wait to get out of Dodge.  We can’t stop people from leaving and we shouldn’t try that hard.  Quite frankly many of those that leave end up coming back and in many cases they are better for the experience.

We are going to need a pile of new people to move here over the coming years.  I have called for a population in New Brunswick of one million by 2040 and I have been approached by others to say we will need the million, yes, but by earlier than 2040.

So let’s get out there and bring them in.  Some will leave, most will stay.

For the federal government, don’t hold that retention sword of Damocles over our heads.  You know that labour mobility is good for the country and that will continue to hold in a world where far more immigrants are pouring into places that haven’t in recent decades attracted many.

Posted in Uncategorized | Comments Off on Goin’ down the road: cough, cough, is good for the Canadian economy