Interesting tidbit on government budgets

Just a quick follow up to the labour market blog. As I have pointed out, employment is up 3.1% from September 1999 to September 2005 in New Brunswick. During the same period, the provincial budget rose 37%.

In Alberta, employment growth was 14.4% while the provincial budget rose 45% (and please don’t forget about the oil and gas revenues).

Am I the only person around who sees this as unsustainable?

I don’t care how many times you go to the Feds looking for more handouts. Employment growth of 3% and expenditure growth of 37% is irresponsible and highly unsustainable. Either they get serious about economic development (i.e. growing the tax base) or they need to get their spending under control.

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0 Responses to Interesting tidbit on government budgets

  1. Anonymous says:

    Keep in mind how horrible those numbers would be if the public service DIDN”T hire people. And at least those are good jobs. It would be interesting though to see what kinds of jobs those are-are they teachers, nurses, or PR hacks for the Premier’s office.

    I think ALL government employee’s should be forced to hold a certain number of New Brunswick investments in their RRSP’s, but of course we’re one big federation now, so that money has to go to Ontario and out West.

  2. The Virginian says:

    Yes the Province deserves some criticism. But the real jobs and the real money is in Ottawa. Its time for the pendulum to swing over to ……regionalization of federal jobs. We all know that the loss of 5,000 jobs in Ottawa will have a small impact on its economy. But the addition of say 2,500 of those jobs in NB, 1,500 to PEI and the other 1,000 to Halifax would haave a tremendous positive impact in Atlantic Canada. Of course given that Scott Brisson from Halifax is the real heavyweight in the Atlantic, my numbers are just a dream for NB. With all the money in Ottawa this would be so easy.
    But yeah, election time around the corner again, and the Feds can’t afford to piss off Ontario. Time to wake up, but it was fun while it lasted.

  3. David Campbell says:

    Virginian, I spent six good years in that fair state. You are correct that the real jobs and real money is in Ottawa but you also correct that the Feds can’t afford to ‘piss off’Ontario. There are currently rumours of a KIA, Honda and Toyota plants potentially interested in Canada but do you think the Feds would put one nickel into an auto plant here? Ontario would rather give us a $billion in Equalization per year in perpetuity than allow the Feds to throw $100 Million at a billon dollar auto plant for NB. I know if the right package was put on the table (training, et. al) we could attract one of these plants. I know this because almost every new auto investment in the U.S. over the past 20 years has been outside Michigan in places like Alabama, South Carolina, Kentucky, etc. That’s us folks (with stricter labour laws, however). So to sum up my response, we gotta take responsibility for our own future down here and hope we can drag the Feds along.

  4. Anonymous says:

    THere’s no doubt that life is unfair, and there’s no doubt that the federation is unfair. And you are quite right about what they SHOULD do. Hell, even having the Department of Fisheries and Oceans divided between the pacific and the east would be a boon. Imagine the lunacy of having it in Ottawa, 2000 miles away from the water. You couldn’t even get them on the phone during the Burnt Church crisis.

    Same goes for auto work, there’s not going to be any spreading of that around. However, without the Auto Pact if a Bricklin ever came calling the cars could be sold in Canada. Training is one thing, but remember, the Bricklin was made all over New Brunswick by a bunch of guys who had never built a car before. There are various stories about Toyota, but one mention was that they had a hard time finding literate people in their plants down south.

  5. The Virginian says:

    Unless Toyota has something else in mind, they have already made their decision on Woodstock and broke ground this week. If as you suggest Kia or Honda are serious looking at Canada, which makes sense in North America due to horrendous employee pension liabilities,health and insurance cost (GM big trouble with Delphi), then Bernie needs to make this a personal task, don’t leave it to some civil servant, and needs to make it personal, like with Molson. I know NB has loyal employees who want to work hard in manufacturing (what is left of manufacturing). Take risk Bernie make it personal. Manufacturing needs a base to grow from. I hear we are not far away from some aerospace jobs. Make it personal.

  6. vivenewbrunswick says:

    Perhaps this is what you are referring to, and it’s no rumour:

    Detroit, Mich. 01/04/2004 — A production version of the Honda SUT concept that debuted at the 2004 North American International Auto Show will be produced at Honda of Canada Mfg. (HCM) in Alliston, Ontario, in 2005. To make room for the new model, all production of Honda’s popular Odyssey minivan at HCM’s No. 2 line will shift to Honda Manufacturing of Alabama (HMA) in Lincoln, Alabama with the production start-up of the all-new ’05 Odyssey in fall 2004.

    Plus this:
    The GTA is one of the lowest-cost business centers in the world. According to the KPMG Competitive Alternatives 2004 study, Toronto had one of the lowest cost indexes of all the major G-7 cities studied, especially for manufacturing and software. The GTA outperformed big U.S. cities like Detroit, Chicago, Buffalo, Atlanta, San Jose, New York, Seattle, and Dallas–Fort Worth. One reason for this is the generous number of incentives and assistance programs provided at the provincial and federal levels, as well as one of the broadest ranges in the world for costs that can be recovered through R&D tax credits.

    Notice that end part, although it certainly stands out. Starting to feel like the outreaches of the roman empire?

    There’s more:

    General Motors, Ford, Honda, Kia, Suzuki, Nissan, and Volkswagen are just a few of the automotive companies that have established their Canadian headquarters in the GTA. DaimlerChrysler and Ford are serious about their presence in the GTA — combined they have recently spent a total of C$2 billion to expand production capacities for new product lines.
    “The GTA’s cost competitiveness has been a key factor in our membership’s production increasing almost 300 percent over the past 12 years,” says Gerry Fedchun, president of the Automotive Parts Manufacturer’s Association of Canada. “It boils down to location. Our GTA members can service OEMs with a production capacity of over 2.5 million units per year within just 1.5 hours of one location. In fact, two thirds of North American auto assemblers are within a 10-hour drive.”
    The federal government is also intent on supporting this vital industry. It has established Auto 21, a Canadian government Centre of Excellence that relies on more than 230 top Canadian scientists and researchers to study ways that Canada can increase its competitiveness in the automobile industry.

    Notice the last part of THAT line. How often have you heard of “Auto 21” in the newspapers? Starting to figure out that auto jobs are as much wishful thinking as economic incentives?