The day after

No matter who wins on Monday, I have a piece of advice. Just a little something to tuck away along with the thousand other opinions being lobbed at the politicians these days.

Raise your glasses. Congratulate yourselves on a job well done. And then pick up the phone and call Ottawa.

Because I think it’s time for a little chat.

There is an army of economists in Ottawa and any one of them could look at the economic trends in New Brunswick and realize that the numbers don’t look good.

As I have pointed out before, New Brunswick will likely pass PEI as the province receiving the most Equalization per capita with in the next 4-5 years if the current trends hold.

These great economists could also see that the major private sector engine of job growth, the call centre industry and it’s 16,000 jobs over the past 14 years, its coming to an end.

They could easily see the other major challenges related to depopulation, the aging population and the decline in traditional industries.

Since 1999, the Federal government has increased its transfer payments to New Brunswick by over $700 million per year (Equalization, etc.). Barring a recession and assume current growth rates, that amount will double again in another 5-6 years. In fact, within 10 years, the transfer payments into New Brunswick will be a larger part of the provincial budget than tax revenue generated within New Brunswick (again if trends continue).

If there’s a recession…..

Well, let’s not talk about that shall we?

So, my advice to the new Premier (Tory or Grit) is to have a little chat with the Prime Minister about what his thinking is regarding New Brunswick.

Do they want it to be an endless pit that they through Equalization and other transfers in at the expense of other provinces?

Do they want the population to continue to decline?

Do they want the best and brightest kids to keep leaving?

Do they want to keep topping up the Employment Insurance program as they did recently?

Or do they want to be an agent of change? Do they want to be the federal government that drove a stake in the ground and said, that’s enough – we’re gonna turn this ship around?

They have an economic reason to do this. During the last seven years, the Feds have increased their transfer payments by over $700 million but I think they have actually decreased their economic development spending in New Brunswick.

Just think if they allocated just 25% of the $700+ million more in transfer payments each year to economy building activities. That would be $175 million more to build infrastructure. To fund research & development. To spread the good news of New Brunswick to the world through a network of foreign offices. To embark on an aggressive people strategy that would target immigrants and repatriation.

And imagine if our Premier decided to match that $175m? That would be $350 million a year to fix our economic problems and put the province on the path to self-sufficiency.

By the way, that $350m would still only represent less than 6% of the total provincial government budget (they spend about 0.6% now).

Don’t you think both Premier and Prime Minister would look good? Sure, some of the 550,000 New Brunswickers that have left the province since 1976 would move back. Sure, the ready labour pool for Alberta would dry up. Sure. But Alberta can attract immigrants. Just as easily as Ontario if they wanted to. They’d just prefer people from New Brunswick. But emptying out New Brunswick does very little for the country as a whole.

Sure, New Brunswick might actually have the means to attract an auto plant or an aerospace plant or a pharma plant and that would annoy Buzz and the folks in Montreal and Toronto.

But in the end, the Premier and the Prime Minister could say concretely that they did more to fix the economic problems facing New Brunswick than any other combination of politicians since Confederation.

And if the Prime Minister extended this logic to PEI, Nova Scotia and Manitoba he might end up with his face on the 10 dollar bill someday.

And isn’t that the ultimate goal of any Prime Minister?

The bottom line?

Premier Lord has already articulated his pathway to growth. He has been the champion of enriched Equalization for the past 18 months. He was scornful in the TJ the other day about any attempts to reduce Equalization.

I think he should change his mind. Instead of asking for more Equalization he should take my advice and ask for more money to fix the economic woes of the province and the tax revenue will flow leading to a stronger economic footing.

As for Shawn Graham, he also should take my advice. He’d have a better chance finding a three-legged ballerina (as John Candy once said) than eliminated the need for Equalization in the next 20 years without a serious plan for economic growth.

And as for the people of New Brunswick, I think we’d welcome boomtown. I think many of us are tired of our families leaving. I think we would support any politician that put this plan in place – even if it caused some short term funding challenges in other areas.

I was in Phoenix two years ago and Ireland in 2003. In both places, there was a palpable sense of pride and optimism that anything was possible.

I think that’s possible here – Al Hogan notwithstanding.

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