New Brunswick: Don’t be distracted by Trump

I had hoped the mania over Donald Trump would die down over time.  For more than a year after his election my Twitter and Facebook feeds (not so much LinkedIn) were so cluttered with fairly trivial Trump stories that I was forced for the first time to unfollow multiple people.

We need to understand how the U.S. president and his policies will impact Canada and New Brunswick, no question, but endless discussion and incredulity about his tweets and demeanor as well as White House intrigues are just distractions from the real issues we need to put in the window these days.

The Chief Economist at the EDC this week claims that New Brunswick is most ‘exposed!’ to Trump and NAFTA negotiations (his proxy is share of international merchandise exports) among the 10 provinces.  I take issue with this on a number of fronts.  Most of our merchandise exports to the U.S. are commodities such as motor vehicle gasoline, lobster and forest products.  These are certainly part of the NAFTA conversation but a thoughtful analysis, I think , would find that provinces with manufactured exports – and complex interconnected supply chains are far more at risk – such as the auto manufacturing sector in southern Ontario.  We certainly should be concerned about softwood lumber tariffs but the current high prices for wood mitigates this somewhat.

I am more worried about inter-provincial exports – and specifically services exports.  EDC doesn’t really care about this because they focus on international exports and the other complication is the lag in inter-provincial export statistics.

For export-intensive sectors we can look at real GDP trends to get a sense of performance.  New Brunswick’s ICT sector more than doubled its real GDP contribution between 1997 and 2011 – and has flatlined since (although the last two years have ticked up).  Our architectural and engineering services GDP more than doubled between 1997 and 2009 and has dropped since.  Our administrative services GDP increased by 174% between 1997 and 2009 and has dropped by 13% since.

The biggest threat to the New Brunswick economy may actually be helped by Trump.  We need to see a substantial increase in the number of young people moving here to bulk up the labour market, fill current gaps and provide the horsepower (people power?) for future economic growth.

I’m not suggesting Trump and Trumpism doesn’t matter.  I am suggesting we relegate most of it to the same part of our brain that likes dancing cats on YouTube or the latest Hollywood scandal – hopefully 2% of your time and Twitter feed.

Let’s spend most of our time – at least when it comes to economy matters – thinking about attracting talent, where the next round of ambitious entrepreneurs will come from, how we can boost our productivity as a province and other matters of importance.

 

 

Posted in Uncategorized | Leave a comment

Inching towards the bilingualism 2.0 conversation

 

I have historically be reluctant to weigh in on the issue of ‘bilingualism’ in New Brunswick.  It can be a polarizing subject with some believing we haven’t done enough and others suggesting it has gone too far.  But it’s an important issue so what the heck – I’ll throw out a few ideas.

I think it is time to have a public conversation about bilingualism.  It’s been 50 years since New Brunswick started to take this issue seriously and there hasn’t been much public discussion about it for 20 years – since the CoR came and went.

The vision of bilingualism has several components:

1) To ensure there are ample French language places and spaces across the province.  This point was lost on many English speaking New Brunswickers who thought bilingualism meant that everything should be bilingual – schools, hospitals, cultural spaces, etc.  I had a long debate with a guy one time who said newspapers, radio and TV should be ‘bilingual’. While that, in abstract theory, has some salience, in reality that vision of bilingualism tends to revert to English.  I have Francophone parents complaining their kids are tweeting in English, watching English TV and that English is spoken by many in the halls of high school.   It’s important to have French language places and spaces.   I think we have done a fairly good job at this but I think we should open up the conversation.

2) To ensure that people have access to public services (and hopefully even private sector services) in the language of their choice.  This doesn’t mean everyone speaks French and English but as much as possible we should strive to make this a reality.  There is no question we have made massive strides in this area.

3) To ensure as many as non-Francophones as possible have the opportunity to learn French – at least at a conversational level.   On this point I think we have essentially failed. Decades of official bilingualism.  Decades of putting upwards of 40% and more English kids through French Immersion and decades of government offering French language training to its workforce and the share of the population that indicates on the Census they speak both English and French has actually declined slightly over the last 15 years.

bilingualis,

 

I’m not going to turn this into a long, winding discourse but the number of English only speakers in New Brunswick rose from 407,000 in 2011 to 421,000 in 2016 (this excludes all immigrants except those with a mother tongue English).  Decades of promoting bilingualism and there are fewer English people who claim to have at least a working knowledge of French today than 15 years ago.

What’s going on?  I have theories.  I think our French Immersion graduates are more likely to leave New Brunswick for good after graduation than unilingual graduates.  I know that sounds counter-intuitive because bilingualism is a real asset in New Brunswick.  But, remember, it’s also an asset in Ontario – and, in fact, across the country.

But my biggest concern is that we have not promoted the use of French among English speakers – even those that speak French.

Why can’t UNB offer French language courses so that French Immersion graduates can keep up their French?  If a UNB student took one or two courses a semester in French it would do wonders to keep up their bilingual skills. If it’s a question of French speaking profs – then do a deal with UdeM.  I would say the same for NBCC/CCNB – Immersion graduates should be able to carry on developing their bilingualism beyond Grade 12.

Why not offer some kind of incentives to encourage English people to learn and use the French language?  Even many new immigrants are given the choice – free English or free French lessons but not both.

Anyway, for this is the start of a conversation.  What does bilingualism 2.0 look like?  What does bilingualism 2.0 look like as we look to attract thousands of immigrants?   What does it look like when the number of born-in-NB Francophones is in decline?  Why are the great TV shows and documentaries published in French in New Brunswick not subtitled and promoted to Anglophone New Brunswick?  We need to have separate French language spaces and places – I get that.  But we need places and spaces where Anglophones can use their French language skills.

For me the bottom line is that bilingualism has been a success.  The rise and success of Acadie should be celebrated.  It’s a great story of a minority culture/language thriving.  But we now have to think about the next level.  We must get more Anglophones using their French.  We should start to see French Immersion graduates rising to the heights in government and the private sector.   We should be more creative in the promotion of French among Anglophones and immigrants (how about free and widely promoted French language training for all?).  And even in the school system where I know that a number of kids drop out of French Immersion – there should be a ‘lite’ version such that every child going through the English language education system should come out speaking at least a conversational French.

And for Francophones, don’t automatically shift to English. My wife and kids all speak French.  At restaurants and other venues they can respond to you in French.

 

Posted in Uncategorized | Leave a comment

Building out a cyber-security cluster

New Brunswick is trying to create a cybersecurity cluster.  It has UNB researchers involved.  It has several corporations involved – anchored by IBM/Q1 Labs.  The government has set up CyberNB with a full team out there hustling to attract firm cybersecurity operations, IT firms, training, certification, etc.

I think there is another round of cybersecurity activity that would complement our existing strengths in business services/back office activity.

I talked recently about Facebook and its need to hire thousands of new staff to ensure its platform isn’t being used for nefarious activities.  This same issue would apply to many online social media and news platforms.

The Economist had an excellent article this week about financial crimes/money laundering and the massive expansion in software that prowls the Internet seeking signs of illicit activity.  This is complemented by a whole industry of firms such as Berlin Risk that make calls and use the old fashioned telephone to support the online activity.  Sound familiar?

If NB is going to do cybersecurity – let’s go whole hog.  Aligning IT, training, back office and customer interaction activity to become a world leader.  We need to attract more immigrants.  We could attract multilingual workers into the cluster bolstering our population with attractive jobs.

In the early 1990s NB was early into the contact centre game and turned it into one of the province’s largest export industries before the larger provinces even noticed.  It is likely too late to do this with cyber as everyone is rushing in.  While Ontario, etc. focuses on AI and algorithms we could focus on downstream content monitoring, interviewing, intel gathering, etc.  I don’t know about you but I’d take 5,000 jobs paying $60k per year over the next 5-7 years.

 

Posted in Uncategorized | Leave a comment

A little good news, today (tip of the hat to Anne Murray)

Statistics Canada recently released its latest GDP and related figures for 2016 and New Brunswick has performed surprisingly well.  Business capital spending is still very weak but household expenditures are up and overall GDP is up modestly over 2015.  If you combine the GDP growth rates over the past two years – the provincial economy grew by 3.5% – above average among the 10 provinces.  anne

Statistics Canada provides GDP growth by industry – and that shows some important trends.  Again, combining the last two years of growth, transportation engineering construction saw a substantial boost in its GDP contribution (if you think there has been a lot of road construction recently – you are not wrong).  The GDP growth rate from aquaculture and agriculture has been impressive and, give me a high five, the forestry sector seems to be strong again with sawmill and other wood product manufacturing GDP growth strong and even paper manufacturing GDP up 10% over two years.  Let’s hope the U.S. duties don’t derail this success.  But my favourite growth sector has been ICT which witnessed a 7% GDP growth over two years but the most important component computer systems design and related services is up 44%.  Telecommunications GDP is down again by 1.5% following a long term trend downward.

 

anne1

 

 

There are some worrying sectors.  R&D GDP growth has been modest.  Accommodation services GDP – the proxy for tourism – is only up 0.5% over two years.  The feds keep whittling away their defence spending in New Brunswick – the GDP contribution is down 15% since its high in 2010.  The contact centre industry (admin services) GDP continues its slow burn but it is only down 10% over the last decade.  This is better than many other provinces.

Our advertising and PR sector continues to collapse.  There’s not much to say about this except it is disappointing.

The biggest concern is architectural, engineering and related services.  The GDP contribution has dropped 13% in two years.  The national and international firms that bought out NB firms – may be retrenching out of NB.

anne2

Posted in Uncategorized | 1 Comment

Putting the old fogies to work?

For some reason there has been an increase in media reporting on the plight of older Canadians/New Brunswickers in recent weeks.  There are stories where the journalist (probably in his/her 20s) decries the fact that a 72 year old has to ‘work’ to survive.  As I get closer to my dotage I think this narrative needs a rethink.

Back in the mid-1990s I had a colleague who was likely in her early 50s and she had one of those multi-year calendars on her wall with her retirement date red circles 4+ years hence.  And she wasn’t shy to talk about how she was looking forward to retirement and the life of leisure it would afford.

My view then – and now – if you want a vacation take a vacation.  Take a long vacation.  But to be eager to retire and drop out of the workforce permanently – in your early 50s – is strange to me.  The concept of retirement at 65 started to take serious root when people were living, to around 70 years old (actually earlier but some of that mortality was due to war).  Now, people routinely live into their 80s and even 90s.

I know a couple who both were public servants and both retired in their mid 50s on one of those early retirement schemes to cut the short term deficit by ballooning long term taxpayer costs.  They are both in their mid-70s now and going strong.  It is highly likely they will have been drawing a pension longer than they worked (30ish years).

My father retired on the dot when he turned 65 because he wanted to make the job available for a young person.

We need to change the narrative here folks.

New Brunswick has the second lowest labour market participation rate among the 10 provinces among those 55+.  This is not a trivial difference.  If New Brunswick had PEI’s labour market participation rate there would be over 17,000 more people in the workforce across the province.

oldies

I hear many reasons for this:”it’s easier to live in NB just on your retirement income”, “EI props up older workers too”, “older New Brunswickers don’t want to work the jobs on offer”, “older New Brunswickers aren’t mobile – they can’t move out of their town because they can’t sell their house or because they have a spouse working or maybe they just prefer not to move” ,etc.

It’s no coincidence the provinces with the highest labour market participation rates among those 55+ are the provinces with large farming communities.  For most farmers 65 is just another year.

I want to be clear that I don’t think we should force seniors to work through aggressive public policy.   We live in a free society and people should be able to make choices about how much they want to work based on how much they want to earn as income.

The nub of the argument is simple.  If we make public pensions lucrative enough that everyone can ‘retire’ in their late 50s or early 60s I think it would be a mistake.  I hope to be working as long as I can.  Hopefully as we age we can expand the definition of work – it doesn’t have to be an 8 hour day – every day.  It can be part time, part year, gig-based, etc.

I’ll end this on one final point.  We often times co-mingle the debate about poverty and older workers – I think to our detriment.

When I read about the 73 year old lady providing in-home care to a 90+ year old person I didn’t read that as a negative. My first thought was good for her.  She’s earning extra money and helping out a truly older New Brunswicker who needs it.

If we (or the 20ish journalist) cast that story as a tragedy – I think it’s a mistake.

I say good for you.

Posted in Uncategorized | 1 Comment

Driving on the Don Mills Growth Way

Someone recently posted the pollster Don Mills’ Seven Actions to Grow the Economy.   Mills is primarily known as Atlantic Canada’s pollster as head of the firm Corporate Research Associates Inc.  In recent years, he has redefined himself as the Jeremiah of Atlantic Canada’s future – woe are we if we don’t get serious about economic growth.

For the most part, I think Mills’ seven jeremiads could come right out of one of my presentations:

1. Retaining our youth

2. Educating the world

3. Building an entrepreneurial environment

4. Increasing the population

5. Re-balancing the workforce

6. Creating urban centered economic zones

7. Developing an export oriented economy

I, too, have been putting a greater focus on education these days.  It’s a great way to attract people to the region to test drive living here and even if they leave after graduate – who cares?  The region benefited from the high value economic activity while they were here.

I am a little more wary about this ‘retaining our youth’  idea because many people use it as a euphemism for restricting immigration.  Besides, a lot of the most interesting people I know were born here but spent 5-10 years living elsewhere.  If I had a genie with three wishes one of them would be that every New Brunswickers live for a while in another place – I think it would broaden our collective perspective.

The export-oriented economy is also key – because when you look closely at the data we actually don’t export much other than the big stuff – fish, lumber, paper, refined oil, etc.  and there isn’t much growth in those areas.  I would like to see a lot more services sector exports – professional services, business services, etc.  We have some good examples already – engineering, contact centres, etc. – we should build on this.

Ultimately Mills’ challenge is that there are an increasing number of old timers driving the wrong way on the Don Mills Growth Way – I mean that literally and figuratively.

Posted in Uncategorized | Comments Off on Driving on the Don Mills Growth Way

The myth of the skilled immigrant (?) Leveling the playing field

The new Census figures on immigration out this week were not that surprising.  It confirms what we have been seeing – that New Brunswick’s urban centres are attracting more immigrants but having some trouble retaining them.

The more interesting data will come in late November (hopefully) when we see immigration by industry and occupation.  We are told that Canada only focuses on high skilled immigrants and that the points system favours those with a lot of education and skills.

Of course this flies in the face of actual data.

Take a look at the following chart from the 2011 National Household Survey.  This shows the ratio of immigrant workers to non-immigrant workers in Toronto (and Moncton as well).  You will see that Toronto’s highest concentration of immigrant workers -relative to non-immigrant workers – is the the lower skilled and mostly lower wage industries such as transportation and warehousing, administrative services, and other services.  There is a very high concentration of immigrant workers in Toronto’s manufacturing sector – but that sector is not necessarily high wage – the average annual salary in Ontario’s clothing manufacturing sector is $34,000, food manufacturing $40ish, metal manufacturing around $55k (in 2016).

The point – that I have been making for a long time now – is that the larger urban centres have been attracting immigrant workers into sectors where they are needed and smaller urban centres are more constrained to the concept of the ‘high skilled’ immigrant.

I’m hoping the 2016 immigrant data will show we are flowing more into the sectors where workers are needed in New Brunswick.

nhsimm

 

I’m a big fan of Herb Emery, the UNB economics prof – but I think – based on the article in the newspaper – he may be sending the wrong message.  His report concludes that policies to attract more immigrants won’t cause the growth of the economy.  His report is actually based on a pretty discrete chunk of data.  It is an important part of the conversation but I have a few counterpoints.

1.  How would he explain the fact Manitoba has the fastest GDP growth among the 10 provinces in recent years – and a massive increase in immigration?  How would he explain that the head of immigration said that a large share of these immigrants are going into the province’s business services sector – the only province with overall growth in that sector?

2. How would he explain the fact that the largest urban centres in Canada right now are driving employment growth across the country -and still attracting the lion’s share of immigrants?

To suggest that causality runs only one way is mistaken.  Export-based jobs will attract migrants leading to increased local demand and more jobs.  We agree.  But tightening the labour market to the point that employers decide not to expand in your community is an increasing risk.

I guess the common ground here is that I am not advocating we boost immigration without a plan.    As I have outlined elsewhere we need to fill empty jobs first – particularly in export-based industries.  We need a more intelligent approach to immigrant investment.  We should boost immigrant numbers in our PSE that align with our growth sectors such as cybersecurity and insurance.  This will send a strong signal to the national and international firms already here that the talent pipeline is expanding.

But I also maintain that immigrants themselves create demand.   Depending on the economy, 70% of all jobs are based on local demand.  If the population or overall wage growth is not strong – this dampens local demand.

It’s seems like we are left fighting the same old, tired battles we have been fighting for years.   I’d rather flood New Brunswick with immigrants and just see what happens rather than constrain immigrants and watch the provincial economy slowly dry up.  The worst case many of these immigrants move on to Toronto.  If so, who cares?  The best case many of them stay and help us build our economy.

Which side of the argument are  you on?

 

Posted in Uncategorized | 2 Comments

Making sure Taintville doesn’t fall through the cracks

There is a place in the Miramichi area known as Taintville.  Someone from the area told me it got its name because it’aint Newcastle and it’aint Chatham (anyone knowing the real story can send me a note). It seems to me that ‘Taintville’ stands as a good metaphor for communities that have lost or are losing their economic reason to exist.

If you aint’ Newcastle and you ain’t Chatham what are you?

In my opinion every village, town, city and urban centre needs an economic rationale for its existence.  Originally, every place was settled for an economic reason. Farmers, fishers and forest industry workers needed a central place to conduct commerce and access services.  Urban centres because centres for public services – education, health care, etc.  For those with growing populations or the ability to attract population from outlying areas, urban centres became places where entrepreneurs set up manufacturing activity. If the community was centrally located in a wider geographic area, they became higher order centres for commerce and services.

Nowadays we have the potential for many Taintvilles across Atlantic Canada and the country as a whole.  These are communities for which the drivers of the economy over 10,20,30, 40 years or more have shifted significantly and they are not finding their role circa 2017 and beyond.

They used to be able to rely on a steady stream of young people entering the workforce.  For decades there was a surplus of young people – and many of them left to find work.  Now there are fewer and many of those that come out of the education system do not want the jobs on offer so they leave for greener pastures.  Partly this misalignment in the labour market has been manufactured by public policy.  I recently looked at the available jobs in a small urban centre and only 8% of the jobs on offer required university and 20% a college diploma.  The other 72% required neither.  Yet we highly encourage our young people to pursue university or college and then are shocked, shocked, when they leave the community or region after graduation.

I’m not suggesting we discourage young people from pursuing post-secondary education – far from it – but the people that used to work the 72% of jobs  – second income earners, students, newcomers, etc. are not as plentiful as they once were.  If the labour market cannot supply needs across the spectrum – all jobs that absolutely don’t have to be in the community are at risk of disappearing – moving to communities where there is available workers – communities in Canada or around the world.

Every community from Edmundston to Shippigan to Sackville and St. Stephen in New Brunswick needs to think about its distinct economic role and pursue policies, infrastructure and other efforts to support that distinct role.  Are you a bedroom community that provides workers to larger urban centres?  Are you a regional services centre?  Do you have existing export-based industries that are losing their underlying reason to be in your community?  Have you relied on local entrepreneurs to drive economic growth?  If so, where is the next generation coming from?

Are there one or two key industries that drive your economy – agriculture, fishing, tourism, IT, education?  Will they continue to do so into the future or are they slipping away?

And if you are inclined to believe that becoming a retirement community is your distinct economic role, I urge you to reconsider.  Among Ontario’s 44 large, medium and small urban centres guess which one has the lowest median income.   Elliot Lake.

Lots of people are retiring and that number is set to grow significantly.  Communities that are great places to retire and offer services and support to people for the 20 and now even 30 or more years after retirement – will benefit.  But there are many reasons why that can’t be the primary economic role.

If your community is starting to look like Taintville, it’s time roll up your sleeves and get to work.

 

Posted in Uncategorized | 2 Comments

How’s she goin’, boys? In the Miramichi, she’s goin’ pretty good these days

In this sense, of course, ‘she’ is gender neutral.  My father, sixth generation Miramichier, sidled up to my father-in-law one time (born and lives in Brazil and speaks a little English) and asked him “how’s she goin’?”.  My father-in-law asked me later who ‘she’ was and why was she going anywhere?

Anyway, no matter how you say it things are going pretty well in the Miramichi these days at least measured by the increase in the number of people working and average income levels.   According to Statistics Canada data – using CRA tax filer data – after steady decline in 2012 there was a big jump in the number of people declaring employment income and now there are over 1,800 more people working in 2015 than in 2011 (flat since 2012).    Don’t forget the number of employment income earners across the province has declined over the same period.
chi1

And these are not low paying jobs, the number of people in the ‘Chi reporting at least $50,000 increased by 1,850 between 2011 and 2015 – more than double the growth rate across the province.
chi

 

And, you might recall from the Census data, the Miramichi had the largest rise in average household income.

What’s going on in the ‘chi?

We will get much better data on this in November when the full Census data is finally released.

Posted in Uncategorized | 1 Comment

McKenna 20 years later: Learning from his legacy

In recent weeks I have been working on a project that has led me to chat with a bunch of business and government folk that were prominent in 1980s/1990s New Brunswick.  In all cases the conversation eventually got around to Frank McKenna.  It always does.   Thirty years ago this month, Frank was elected as Premier and 20 years ago yesterday he stepped down as Premier – keeping a promise not to stay in power more than 10 years.

I have written a lot over the years about McKenna.  He reined in public spending.  He championed New Brunswick across Canada and beyond.  Who can forget the stories of taxi cab drivers in Toronto invoking his name or of him hustling CEOs on Team Canada trade missions much to the consternation of other Premiers.   In general, he spent a lot of time trying to convince New Brunswickers that we were just as good as any other Canadian.

In many ways his post-Premier career has been even more influential.  He hobnobs with Bill Clinton and other global leaders.  He is highly visible on many national issues.  His perch at the TD Bank has provided a platform to continue championing New Brunswick.

What is his legacy?  It’s hard to say.  The fact that Mckenna is a top 100 baby name in Canada for girls may or may not have anything to do with the guy called “the tiny, perfect Premier” back in the day.

There are certainly few people in New Brunswick who were adults in the 1980s and 1990s who don’t have a developed opinion about him one way or the other – I would say mostly a good opinion although I run into people who are still bitter about amalgamations, forced RCMP, etc. and even some who continue to believe he was too focused on attracting industry and not enough on helping poor, old NB small businesses.

My only beef with McKenna – stated at the time and many times since – was that he didn’t leave much infrastructure behind when he left.   McKennaism wasn’t embedded in government – not political or bureaucratic.  Bernard Lord actually ran on  a platform that repudiated McKenna’s economic development program talking about a “made in New Brunswick” solution instead (ironically, of course, Lord benefited from even more call centre jobs than McKenna as most firms attracted here in the mid-late 1990s only reached full expansion by the early 2000s).

This is the challenge with the cult of personality.  It can be a wonderful tool for change at a moment in time but can lead to an ongoing overhang – every Premier since McKenna has been compared to him – and not favourably.  One Premier told me he was dogged by McKenna’s shadow in office.  Fair enough.  U.S. Presidents get the same treatment.  All Republican Presidents get compared to the Gipper.

We should learn the lessons of Frank McKenna:  1) There is value in having a determined, charismatic leader during times when big changes are needed; 2) New Brunswickers can and should be #NBProud; 3) New Brunswickers can compete and win when it comes to attracting global firms; 4) true political success happens when change is embedded into the system – which did not happen with McKenna.

 

Posted in Uncategorized | 2 Comments