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
davidwcampbell.com
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
davidwcampbell.com
An economic development consultant based in Moncton

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Enlisting the young in the fight against lethargy and stagnation

From Dan Martell’s CrunchtimeNB initiative to Lisa Hrabluk’s Wicked Ideas (as in, she tells me, wicked smart), there has been a lot of focus on getting out the youth vote in this election.  I love it.  The more NBers engaged in the political process the better.

But I would like to see it go one step further.  I’d like to see young NBers get engaged and push politicians towards smarter economic policies.

It’s easy to get young people worked up over social, environmental and rights issues but economic issues not so much.  In fact, I would suggest in general younger people are even more suspicious of markets and profit and wealth than the older generation (hunch, not data driven).

That suspicion is not a bad thing.  Suspicion is one of the ways we can restrain some of the excesses of the capitalistic system.

But, in the specific case of New Brunswick, we need people to think about how economies grow and reward the political class for moving in that direction.

For example, young people are smart.  They can connect the dots.

They know that more than ever the products and services they consume are produced elsewhere – think Facebook, Twitter, Amazon, Samsung, Apple, etc. so it should not be a leap to convince them New Brunswick has to be more focused on integrating into this global economy.  For New Brunswick to be successful we need firms that are selling into the global market.

If a young person is saving for the future (RRSPs, pension, etc.) it wouldn’t take long for them to realize that virtually all of their savings have been invested anywhere but New Brunswick.  Young public servants can look at where their pension is being invested if they want the most vivid example of this.

The logic that we need to be attracting our share of investment from outside, then, shouldn’t be that hard to figure out.  This investment can come by way of investment into existing NB firms or from firms that are based outside NB investing here.

Young people can understand the basic demographic reality facing this province.  If we don’t dramatically increase the younger population we will destabilize the ability of government to generate enough taxes to pay for public services and infrastructure.

Young people are more jazzed up by ‘localism’ and so they should be but that is not inconsistent with a globalized NB.  In fact, the two are highly symbiotic.  If we have a strong core traded economy (export-based to offset the massive imports), that allows us more wiggle room to pursue a local food strategy, local arts and culture development, etc.  The stuff that binds us together as local communities requires us to get the global issues (the traded economy part) right.

So, do I expect young people to demonstrate outside the legislature with placards reading “We want more multinationals to invest here now!”?  No.  That would be too far even by my standards (although the campaign to attract Walmart to the Miramichi was an interesting aberration all those years ago).

But I would like them to push their politicians on immigration, on urban development, and, yes, on natural resources development.  Again, it is somewhat of a cliché that young=anti-natural resources development.  But they see their peers leaving to work in Alberta and Saskatchewan.  They read the stories.  They see the Facebook posts.  The dots are there to connect.

In the end it is a matter of basic ‘physics’ that older NBers are starting to think about retirement and the great blue yonder.  It is the young ‘uns – with their entire lives still ahead of them – that have the most to lose if we don’t get this right.

They need to step up.

 

 

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I didn’t want to write this, but I did (Warning: Fracking content ahead)

I read the article quoting the most popular Premier in Canada, Brad Wall, and his position on shale gas – or more specifically hydraulic fracturing as Saskatchewan is mostly using the technology to frack for oil in the Bakken – with interest.  You will probably need to have a password to the TJ to read it but it is worth it – particularly how Gallant and Cardy responded to his comments.

Cardy said he didn’t know enough about Saskatchewan’s wells to comment on whether they were safe. “I don’t know anything about the industry in Saskatchewan, all I know about is the industry in this province,” he said.

Gallant was asked on Friday if he would look to other provinces such as Saskatchewan in deciding whether to lift the proposed Liberal moratorium on hydraulic fracturing. “Sure,” he said. “But I would have to add that there would be a lot more stock in the studies and reports that we need to get the information that we think we are lacking when it comes to the risks of our water, environment, and our health.

This shows you just how toxic and polarizing shale gas is for these two politicians.  They are forced to use Rube Goldbergian linguistic contortions every time this issue is raised.

Imagine Cardy admitting he doesn’t know enough about Saskatchewan.  He is easily the closest thing to a policy wonk we have in NB politics.  If there was a poverty reduction scheme or income equality program in Saskatchewan he would have it memorized chapter and verse.  When it comes to an industry that could be a multibillion a year economic driver and bring several thousand jobs to the province, he doesn’t want to even pick up the literature to read about Saskatchewan – another Canadian province.

But I sympathize with him – I really do.  He developed probably the most elaborate and difficult policy framework for shale gas that could possibly be imagined other that outright banning the industry and still had a candidate publicly chastise him for it.  He doesn’t seem to realize that for many – many is his own party – it has nothing to do with fracking.  It’s about the oil and gas industry itself.  There are many New Brunswickers who are completely against the industry even if it means we have to import our gas from far and wide.

So there is no heavily parsed, sliced and diced, Rube Goldbergian position on shale gas that would satisfy them – not NDP, not Liberal and I suspect a good slice of Tory voters as well have no interest in learning from Saskatchewan or anywhere else.

I think we should just throw away this faux debate about fracking – it must be making journalists queasy – and get on to the real debate about whether or not we want NB to have an oil and gas exploration and production sector.

 

 

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Are we fracking Confederation?

Watching Joe Oliver’s response to the Nova Scotia fracking ban was painful.  He paused after every word.  He hummed and hawed.

Presumably what he would like to say but can’t is that this issue could end up putting a whopping fracture in Confederation itself.

Eventually the three western Canadian provinces will realize they are depleting their oil and gas reserves using the techniques that are being banned in Quebec, Nova Scotia and if the Libs get elected in New Brunswick, here too.  A portion of the government revenue generated by that depletion is finding its way down to QC, NS and NB in the form of Equalization.

Should western Canada’s oil and gas revenue be used to pay for Equalization in Quebec and the Maritimes if those provinces refuse to develop their own oil and gas industry using the exact same techniques?

As a kid my brothers and sister used to pick on my for hoarding.  We would all get a candy bar and they would gobble theirs down and I would save mine for later.  At some point I would whip mine out and slowly savour it while the others watched with envy.

BC, AB and SK could make a similar case here.

Now there are constitutional issues that would come into play here but if the public in a part of Canada with the fastest growing population and the economic might decided to think about the fracking bans in Quebec and the Maritimes we might not like the outcome.

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Population churn: It’s the net number that counts

Political campaigns are filled with snappy one liners meant to stick in the voters mind.  In New Brunswick there tends to be a lot in the spirit of “keep our young people home”.  That tugs at the heart strings – “our best and brightest young people have to move out west because of our politicians”.  It makes you want to take a cudgel to your polling station.

But it is worth reminding you that we are really interested in the ‘net’ number.  Young people will leave NB in the thousands each year.  They always have.  They always will.  They go away to school (I just dropped my eldest daughter off at York U this past weekend, sigh).  They want to see the world.  And, yes, some will go to make the big bucks.

We need New Brunswick to be a place that is creating meaningful career opportunities for young people.  That gives young NBers choices (stay or go) but ultimately where the population comes from to fill those jobs will be a combination of locals, interprovincial migrants and immigrants.

Look at the Toronto CMA.  Over the past decade it has lost more people on a net basis through intraprovincial and interprovincial migration than it has attracted.  More people moved to Moncton from Toronto than vice versa since 2006.  But Toronto more than makes up with massive immigration.  In an average year, Toronto attracts more immigrants in one year than New Brunswick attracts in 75 years.  BTW, a chunk of those immigrants to Toronto also end up migrating out and some of them end up in New Brunswick – which removes Jason Kenny from the equation altogether (hint, hint).

Bottom line?  For many young NBers the best thing for them to do is leave (and hopefully many will come back).    Living in another city or country opens their eyes to possibilities. It makes them more tolerant.  It strengthens ambition.  Many – if not most – of the interesting people I meet in this province either moved here from away or were born here but moved away and then came back.

It doesn’t make much for a campaign zinger but I propose the politicians say “We need to focus on the net migration pattern” or how about “let my people go and bring back skills and worldliness we really need”.

torontomigration

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Video games and economic development

There is an excellent article on the front page of the NY Times on the rise of these multi-player video games as a spectator sport.  From the article:

The video game Dota 2, like so many across the Internet, transports teams of players from their bedrooms to a verdant virtual world where they smite each other through keyboard and mouse clicks. Except on this sunny day in July, every attack and counterattack by a five-person team set off an eruption of cheers — from the more than 11,000 spectators crammed into this city’s basketball arena.

The contestants were gunning for a big piece of the $11 million in total prize money, the most ever at a games tournament. And the game’s developer, the Valve Corporation, moved another step closer to securing gaming’s legitimacy as a major-league spectator sport.

Theoretically a place like Moncton could be a centre for this type of entertainment pulling folks from across the Maritimes.  But it would be rare for New Brunswick to get out front of a trend like this.  It is more likely if this takes root it will start in Halifax and may eventually work its way up to New Brunswick.

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Was the New Brunswick journalist crap-o-meter broken last week?

Around the time of elections going back to 1999, I have been asked to provide input into various economic development-related party platforms and campaign ideas. In this election cycle, I was asked by the Liberals to conduct an independent economic assessment of several of the campaign’s proposed initiatives. The impact was estimated using Statistics Canada input-output multipliers and related CANSIM tables.

Anyone who follows this blog or reads my column or talks to me directly knows I support the Progressive Conservatives’ position on shale gas development. In addition, while like most people I struggle with the extent of austerity measures I think Blaine Higgs has done a fairly good job over at Finance. I have made very positive remarks about Dominic Cardy over the past six months on this blog and in my column.

I also like some of the ideas proposed by the Liberals. I think the idea to show the economic impact of their spending initiatives is an important contribution by the Liberals because they are showing the cost of their campaign promises but also letting people know the potential economic impacts.

Now the politicians need to have a fair and open debate about public spending and criticizing the $150 million spend on infrastructure is fair game. In an age of budget deficits and weak economic growth, the voters need to know where and how the various parties will spend the taxpayers’ money.

But ‘fair’ is a term that needs to be interpreted by journalists. The public relies on journalists to put claims and proposals into context. I think there was a failure this week by journalists to properly set the $150 million spending per year in context.

First, to the spending itself. We know that total provincial government capital expenditures in 2013-2014 were $448.5 million and are budgeted to be $555.2 million in 2014-2015. This is 39% below the average annual capital expenditures between the 2010-2011 and 2012-2013 budgets. The $150 million proposed by the Liberal would only bring spending back up to a level below the average for those three years.

Again this level of spending can and should be open for debate but journalists are the translators – the interpreters for the public. For example, does the public realize the provincial government has spent on average around $690 million per year on capital expenditures and the Liberal proposal would bring spending in 2015 back to a level below that average?

Sure it is certainly important to debate that. Maybe the government should cut capital spending further. Maybe it should drop to $400 million or $300 million. But that, too, would need justification and scrutiny by journalists.

But the strangest aspect of this story that was passed on almost completely by journalists was Dominic Cardy’s linking of the Liberal plan to boost spending on public infrastructure – schools, roads, bridges, etc. to Atcon. For effect, Cardy broke it down like this:

“It doesn’t make any sense. The province cannot afford this.” “It’s completely unacceptable that the vision for our province would be so poor, so feeble, that the best that we can hope for from our governments is subsidies for people so they can take part-time work for a few years so they can get on EI,” Cardy said. “Mr. Gallant’s suggestion this week is one of the most irresponsible things I’ve seen in my time politics.”

Now Mr. Cardy is free to say anything he likes. He could compare the spring flood on the St. John River to the great flood of Noah. It is the role of the journalist to put that into perspective for the public.

In what way is $150 million spent on public infrastructure comparable to Atcon? Would he get away with that statement if the Liberals were proposing to boost health care or education spending by $150 million?

Without journalists, how do we get perspective?

The only way – and the connective tissue is very loose – to connect the $150 million to Atcon is to say they were both bad decisions. But by that standard you could compare the $150 million to the assassination of Archduke Ferdinand or the war on Iraq. If a politician did that, surely journalists would not be happy.

Instead of journalists calling out the NDP for the strange comparison between public spending on roads and Atcon, they think it was a master stroke. At least, STU journalism prof Michael Camp thinks so. Although the piece is a political commentary not an article, it is clear he doesn’t feel the need to set any context either.  He praises Cardy’s use of this kind of analogy.

The final thing I would say is that politicians and journalists risk a lot by allow this kind of amped up rhetoric to go unchecked.

Cardy saying that a moderate increase in spending on public infrastructure was “one of the most irresponsible things I’ve seen in my time politics” ends up diluting the impact when he speaks about any serious issues. It’s like the boy who cried wolf. If a moderate increase in public spending on infrastructure sets a new low for irresponsibility what terms will he use when some serious issue – fraud, theft, bribery – Gomery – Rob Ford –  comes along?

Great journalists have a very sensitive nose.   They can smell b.s. coming a mile away.  Cardy’s comments should have set the crap-o-meter over the top.

 PS – I don’t read every single story or blog or commentary in the NB media.  If anyone can point me to a story where a journalist questions the use of Cardy’s Atcon analogy, post it here.  Thanks.

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Three cheers for free trade! Now let me see, do I actually have anything to trade?

Some of the Premiers – mostly the western Premiers – are pushing for more free trade between the provinces.  It’s outrageous we are told that it is easier to trade  with some other countries than between provinces.

I’m a believer in free trade.  Absolutely.  If you read Jarrod Diamond’s stuff he talks about how trade brought about the modern economy – coastal tribes traded fish for arrow heads with inland tribes.

But I always come back to this issue of mutual benefit. If only one party benefits from free trade, it could become unstable.

New Brunswick already has a $2.5 billion interprovincial trade deficit and if you took petroleum products out of the mix it would be billions more.  That means the GDP, jobs and tax benefits are skewed against us (I suspect some economists would argue this point).

I’m just saying that provinces like NB need to sharpen their pencils and think about how we could benefit from freer trade between the provinces.

Take the issue of government procurement.  The free traders would like zero restrictions.   If it costs one dollar less to buy a product or service from another province, that’s what provincial governments and agencies should be obliged to do.

But I allow some wiggle room for economic benefit.  If a company will do the work in New Brunswick for $1million and the guy outside NB will only charge $900k I might still go with the $1M guy because he is generated $150k in taxes within NB making the net cost to government -$50k.   In addition, some of the larger government service providers have been dangling more export-based jobs in return for favorable treatment (think IBM in Nova Scotia).

Now the purists will decry my perversion of Adam Smith but think about this logically.  It happens all the time in the private sector.  The legal firm for Apple could get Samsung phones for 10% less than iPhones but as a gesture of goodwill they pay the premium for iPhones.  Do the Smithians cry bloody murder?  No.  That is part of doing business.

The same with government procurement.

Now, there are absolutely limits.  We should never pay $2 million to a local provider when some external firm would charge $1 million.  We don’t want to use a local software developer in the place of Windows.    That kind of industrial policy doesn’t create champions – it creates losers.

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Who is telling the little, white lies?

We love to scrutinize the pols to see who is telling the truth and who, shall we say, is not telling the truth.  The media has ‘fact check’ initiatives.  The parties accuse each other of falsehoods.

I accuse us of telling little, white lies.

The latest poll out today (from the TJ online):

Job creation and the economy are by far the top issues in the campaign, according to the poll. A wide margin of respondents, 39 per cent, cited jobs/employment/unemployment as the dominant issue while an additional 18 per cent cited the economy. Health care came next among issues at 13 per cent while natural gas development and fracking was indicated by five per cent of voters. The debt and deficit also garnered five per cent of the mentions. Pensions were mentioned by only one per cent of respondents.

I’ve written about this before.  How many people do you know that will vote for the party that they think will be best on the jobs/employment/unemployment front?  Will you?

I think we tell pollsters the economy is our biggest issue and then we vote based on anything but.

It’s just a theory.  I have no real proof other than anecdote and hunch.

I may be wrong.  Maybe New Brunswickers really do care that the number of employed in the province was the same in July 2014 as way back in July 2004.

My colleague Richard Saillant will be bummed debt and deficit only got 5% of the mentions.

One of the problems is that jobs/employment/unemployment is an abstract concept.  Politician A says “we will create jobs”.  Politician B says “we will create more jobs” and Politician C says “we will create even more jobs”.

Tangible things that make voters angry?  Wait times.  Lack of nursing home beds.  Fracking.  Moving high schools 11 kms down the road.  Or how about I just don’t like that gal/guy?

I would be very, very surprised if more than a few voters actually sat around the kitchen table and said “which politician has the best economic development plan”?

In a historical context, the economy was never stronger than in 2003 and 2006 and Old Bernie nearly got creamed in 2003 and did get creamed in 2006.  If the economy was the most important issue, why?

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