Congrats Rodney, now get busy

I have been following the Nova Scotia election fairly closely as I have several clients in that province and because I think a stronger economy in Nova Scotia is good for the whole region.

So, congratulations to Rodney MacDonald as it looks like he will form a minority government in that province. Before the ink is dry on the election results, I’ll give a few pointers from my perspective on what Rodney should do to strengthen the Nova Scotia economy and continue to lead the region in economic growth.

First recommendation, throw out the Plan for a Stronger Nova Scotia 0r at least the economic development section.

I fear we may be headed for another New Brunswick economic development program and that would be a huge strategic error for the province.

Consider the introductory paragraph in the ‘Sustaining Smart Growth’ segment of the plan (which is the economic development plan but it must be worded this way to woo NDP voters).

According to a recent public opinion survey by Corporate Research Associates, Nova Scotia is the only province in Atlantic Canada where more of its citizens feel the private sector – not government – has the most critical role in strengthening the economy. This reflects Nova Scotia’s traditional can-do entrepreneurial spirit coming to life.

Now to Conservatives everywhere, listen carefully, the private sector has no interest* in ‘strengthening the economy’ and most economists would say they shouldn’t. Private businesses have an interest in strengthening their own business and in some cases that might be to the detriment of the economy (like when the oppose attracting industry because it might drive up wages). The government, the community, the ‘collective us’, has the ‘most critical role’ in strengthening the economy. Of course, the business community is the most critical component but governments need to set up regulation and structures to allow business to grow and prosper but the entity in society that needs to lead the economic development of the province must be the Nova Scotia government. If Rodney’s plan it further withdraw the government from economic development, he will do so to the peril of Nova Scotia.

*Don’t freak out. I know that many businesspeople believe passionately about the economy and the success of their communities. But the prime mover on this stuff, the lead, has to be the government which, in theory at least, has the best interest of the community at large.

Now, here are the other parts of Rodney’s economic plan:

• Lower taxes for small business.
We saw how much this helped in New Brunswick – 7% decline in small businesses since 2000 – the worst performance in Canada. You want small business to grow? Ensure a good mix of large business investment which will stimulate the need for small businesses which are 95% based on local markets and local market conditions.

• Match the federal government’s tax credit to help workers offset the cost of work-related products, such as tools and uniforms.
Huh?

• End the large corporation tax for business by July 1, 2012.
Small step.

• Expand the Competitiveness and Compliance Initiative (CCI) to help businesses that deal with government succeed.
don’t know about this.

• Based on the success of the current Credit Union Loan Guarantee Program, help small businesses access financing not presently offered by looking at new complementary programs that would be offered by credit unions and/or other private sector financial institutions.
-Again, you won’t replace mill closures, manufacturing decline, etc. with more support for small business. We need to rebuilt the economic anchors that are closing in these rural communities. How about a few more Michelins?

• As part of Nova Scotia’s Route to Prosperity strategy, create the province’s largest single highway and road building program of the last 40 years, which will result in 2,000 new kilometres of twinned, paved or repaved highways over the next four years.
Must be that ‘smart’ growth thing.

• Use existing provincial agencies and resources, such as the Halifax-Dartmouth Bridge Commission, to develop a transportation strategy specific to the needs of the people of the Halifax Regional Municipality.
Must be that ‘smart’ growth thing.

• Pursue a comprehensive transportation infrastructure agreement – covering highways, air, rail and ports – with the federal government to establish Nova Scotia as Canada’s Atlantic Gateway.
Hallelujah, see my plan below.

• Build 21st century infrastructure by working with the private sector and other levels of government to guarantee that all Nova Scotians, regardless of where they live in the province, have access to high-speed Internet service by 2010, in concert with the introduction of free WiFi in the Halifax Region.
Good. See Saint John’s strategy for WiFi. Cheaper and probably better.

• Expand the Skills Nova Scotia Framework, working with the private sector and educators, to develop and implement a new 4Rs strategy (retain, retrain, repatriate, recruit) to address the looming skills shortage in the province and region.
If there is no plan to grow the economy, you could have 400 ‘Rs’ and no results.

• Provide additional funding to accelerate results of the Immigration Strategy.
Cool but you’d better have jobs for them or they will leave.

• Over the next four years, dedicate more marketing dollars to promote Nova Scotia as a tourist destination experience to visitors here and abroad.
Have I mentioned my dislike for tourism? Substitute destination for international investment in the place of tourist destination.

• Take all steps, in concert with the federal government, other provincial governments and the private sector, to counter the detrimental economic effects of new incoming United States travel rules.
Hey, can you tell this guy was minister of Tourism?

• Act on the recommendations of the Premier’s Council of Innovation, particularly as they relate to commercialization and research and development.
Fine

• Update Nova Scotia’s five-year old Energy Strategy to ensure it reflects the energy realities of today and tomorrow.
Needed

• Ensure Nova Scotia’s film tax credit continues to be competitive with other jurisdictions to maintain the province’s position as a leader in Canadian film production.
It’s not competitive now so how can you continue to be competitive? It’s better than NB though.

• Extend the eligibility criteria of the film tax credit to include digital entertainment.
Good.

Now, here’s my plan (talk about arrogance, eh?):
-Attract more RIMs to the urban areas (Halifax, Cape Breton)
-Attract more Michelins to the rural areas
-Make the Port of Halifax the top east coast port in the Post-Panamax world (hint that means investing serious dough)
-Build on the nascent digital media industry growing in both urban and rural Nova Scotia. Train hundreds to work in this sector and then go get companies to come on down.
-Do what you can to stimulate the offshore energy sector
-Attempt to create a financial services back office cluster in Halifax. Ireland did this successfully. Lure away from Toronto exNova Scotians that are working on Bay Street. There have been a few financial services firms set up in Halifax and my hunch is there is more where that came from.
-Don’t ignore Halifax. Embrace it. Halifax is a small city in North America but it’s all you got. Growth in Halifax will not come at the expense of the rural areas. It will over time help the rural areas. Forget that it is an NDP str
onghold and do what’s good for Nova Scotia.

Finally, go to Stephen Harper and say, here’s our proposal. Let’s freeze Equalization at current levels but give us $1 billion over five years and we will plough that directly into economic development and job creation. Forget AIMS and paying down debt. Note to Crowley, if the population continues to decline, who cares about the debt? We have got to get the economy moving forward. We need to grow the base of taxpaying companies and individuals – then worry about debt reduction.

Good luck, Rodney.

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0 Responses to Congrats Rodney, now get busy

  1. Anonymous says:

    Trouble is, to get votes, tories play to representation-which is Ontario and especially Quebec. If you think central canada wants a strong eastern economy to provide yet more competition you’re crazy.

    However, RIM was good news, but the problem is that all the jobs are centred around Halifax. Again, go read the presentations to the federal committee on international development. The problem in Nova Scotia is Halifax is going gangbusters, most every place else is dying. Two counties are benefitted by Halifax.

    So here again we see what this means, and why provincial governments are becoming as obsolete as federal governments (at actually ‘equalizing’). You see from the listing that Halifax is going to get free wifi-now how does a rural area compete with that?

    Yet look at energy, the coal plants are all located in rural areas, but everybody pays the same, Halifax doesn’t pay more, even though they are farther.

    Michelin has been threatening to leave for years and it looks like this year might be it. They’ve already closed shop in Kitchener last year, and are eyeing two others, NS being one of them.

    Tourism is interesting though, although we’d argue the benefits of large corporations forever, I’ve been reading about Vermont, and interestingly enough, it seems IBM’s forty year and counting relationship with Vermont (whether good or bad) happened because the son of the owner of IBM at the time happened to have a ski chalet nearby.

    Just goes to show you just never know where investment can come from.

    The one benefit of tourism that hasn’t been explored is transferring that modest parlay of cash into a year round return. I know of three cottage rental locations which offer video DVD’s throughout the year for a small fee to yearly clients. This turns a one week cottage rental into a year round business. Including local artisans helps spread the wealth around. No, it’s not going to create massive growth, but in a rural area the benefits have been quite impressive.

  2. scott says:

    However, RIM was good news, but the problem is that all the jobs are centred around Halifax. Again, go read the presentations to the federal committee on international development. The problem in Nova Scotia is Halifax is going gangbusters, most every place else is dying.

    I agree with you on this anon. But the more Halifax grows their new industries, the more chance some of the companies may move some of their organizations to rural Nova Scotia. It’s just a matter of familiarity. Take a look at this great example. Could you imagine this happening 20-30 times to remote economies in rural areas while the company does more research in the city. Something to think about.

  3. Anonymous says:

    That’s a good post worthy of a blog in its own right, however, I don’t seen anything in there that would make one think that Halifax’s growth has anything to do with it.

    In fact the winner even states that going to St.FX and getting such a welcome in Mabou were the reasons he’s turned down chances to move. Investors, directors, banks, of course would want him to move to Halifax so they can quickly fly in or out, or are even located there.

    However, the real point of the story is it shows, first, how important it is to have a medical school, and second, that research can be done anywhere. It always depends on personalities, but there are lots of people who far prefer doing business is smaller locations rather than cities.

    But this VERY easily could be another story about another company in Halifax, it was literally this guy liking a rural area that made the difference.

    That was SUPPOSED to be the whol point of having a central government, so that all these places weren’t forever ‘racing to the bottom’ to attract business. A central government was supposed to be able to build up the infrastructure equally, and if we had proportional representation forty years ago then perhaps it would have turned out that way. Instead, we have industry set up where government has the most on the line.

    So Moncton grows, Bathurst dies. Yet research can literally done with just a computer now, at the very least a government should provide that infrastructure.

    I virtually guarantee that a guy like that would have found a warm welcome anywhere in NB, but keep in mind, we are still talking about home grown talent. He’s from the area, he likes the area, and that makes a big difference.

    But again, without the knowledge infrastructure, there is nowhere to put money. Canada has money again, and there’s hardly anywhere that is politically feasible to put it. Without a medical school, NB will NEVER be able to capitalize on disease research, medical research, the ONLY growth industries around. As said before, with not even a New Brunswick television station, the other cash cow-animation, entertainment, documentary production, also has zero chance.

    But that’s a pretty lousy way to plan economic development: “we’ll build up this area a whole lot and that means there will maybe be more of a chance that it will spread to other areas”. Meanwhile, everyone from the other areas have to leave to get a job. As David says, business doesn’t give a rats ass about rural areas or even the economy, they are trying to survive, its governments job to do these things.

  4. Anonymous says:

    If you don’t beleive that the model proposed of invest in one area and see it grow to rural areas look a NY. Built around it are corporate HQ’s in NJ, Conn, Long Island, etc. Granted that is an extreme example, but it had to start somewhere.

    Bathurst dies because they don’t modernize, not because there is no opportunity. I always wondered why the north has never proposed to build a high speed commuter train like NY to Phi. Workers could get on the train at 7AM, be in Moncton/SJ by 8:15am or less and be back home for supper. Live in Caraquet, work in Moncton.

    They do it in every large city, why not NB or NS?

  5. David Campbell says:

    I like it! Politicians 100+ years ago used transportation infrastructure as an economic development tool (consider the rail and St. Lawrence Seaway). Today, politicians are just health care administrators.

  6. Anonymous says:

    Uh northern communities barely have the money to FUNCTION, let alone build high speed trains. That’s clearly provincial jurisdiction, since theres a lot of area between the northern communities and the south. Yet there’s a reason why its taken twenty years and climbing to double the trans canada highway, and you’re talking high speed trains?

    How about starting with decent BUS service? But how many people are there? It would have to be subsidized and oh what a ruckus the Monctonians, Frederictonians and St.Johners would raise. They have unemployment enough, getting competition from rural areas just adds to the problem for them.

    But ‘modernization’ certainly isn’t the problem. Like New Brunswick they are simply way out of the market area. The last statistic I saw said that 90% of final products were from Saint John. That may have lightened a bit with Moncton, but there’s a reason Saint John is production central-namely Irving.

    Those are specific government policies which are expanding. Notice how nobody even MENTIONED using Belledune to bring in LNG even though the port is underused and it would have added growth to the entire north.

    Again, the government spent tons to keep Nackawic afloat, but was hardly interested in Bathurst’s problems.

    This is Canada’s political system at work, it simply favours where the representation is, which is cities and urban areas. This is why the maritimes gets screwed over, and why rural areas within provinces get screwed over. It’s clearly political as most of the resources are usually in rural areas, and its just as easy to create those value added products there.

  7. Anonymous says:

    Your missing the point. If we have infrastructure to support employment, Moncton, SJ and Freddy will be begging for workers. Your are right in saying geographically, areas like Bathurst are missing the boat. that’s why the only chance you have of playing is by being invited to the game.

    Probably 20-30% of NYC’s workforce is from NJ and Long Island. Why couldn’t it work for us. Imagine a region working together instead of against each other.

    Yes there will be hurddles, but think of the message it will send to the rest of the world if we show a huge investement in our regions future. It’s not a CFL team, but damit it would be money well spent.

  8. Anonymous says:

    If you think people live in New Jersey because New York creates policies to try to make it easier for people to live elsewhere you’re sadly mistaken. Just check out the blog above about subarbanites using Fredericton infrastructure without paying taxes for it.

    I would suggest that 20-30% of Frederictons workforce already comes from outside, ditto Saint John. In fact I’d say it’s far higher. I know of people who live in Fredericton and work in Saint John.

    However, just because somebody lives somewhere that doesn’t create economic growth. You can make the assumption that if, say, there were bus service from Pine Ridge to Moncton that would mean Pine Ridge would get built up, but that’s all that is-an assumption. It’s just as likely that eventually those people would pack up and move to Moncton-particularly the younger people.

    But realistically, once you have a job getting a car is easy. And the highways in New Brunswick are pretty darn nice.

    I would suggest what you want is what the link above has, new industries setting up in rural areas. Due to population densities, you don’t even need very many to make a big impact in a rural area. But what you need is the infrastructure so that, first, people from rural areas actually get a higher education (as they can in Nova Scotia which has universities all over the friggin place), and second, some small means of financial support to get it off the ground. Whether that’s an I-3 program like Cape Breton has, or Vermont’s technology fund is something that can be worked out.

    As you say, that’s the whole point-making a huge investment, and ‘showing the world’. What exactly does it show the world when the only economic incentives have been giving unfair tax subsidies to Irving, potentially subsidizing a dying industry in forestry, and making the northeast one of the most contaminated places on the continent with Bennett.

    Those are all political issues, that you deal with with POLICY. Sorry to rail on our blogger again, but again, you need a LOBBY. You need a way to connect with politics, not have tons of New Brunswickers making suggestions from the outside while government simply does what its corporate owners tell it to do.

  9. Anonymous says:

    Sorry, I forgot one thing. You need the political WILL to actually try to build up rural areas-that’s the political aspect.

  10. Anonymous says:

    What this province needs is a one term Premier that will implement the neccessary changes to transform NB.

    Too many politicians cave to public pressure. People are terrified of change, even if it’s good for them.