A couple of stories this a.m. of interest.
First, the CBC has a more detailed piece on the ROC Consulting gig to support economic development in Northern NB. Somebody said this might change my view of the thing. Look, I don’t know much about the tendering process. There are instances where government doesn’t need to tender and I think that makes a lot of sense. I have been involved in losing bids to tenders where it was more than clear that a single contractor had stood out above the pack. These should be rare – but when you look at the four consultants involved with ROC, it would be hard to create that team from an RFP process. In my view, this is about results. From a high level view, it seems their vision for northern NB is an interesting one. Now we will see if it gets results.
I’ve never met this Constantine Passaris at UNB but he seems like a grizzled veteran of the economics game in New Brunswick. He’s got a very strong commentary in the paper today that I enjoyed reading. But, increasingly, I think it is time to get beyond the generic to the specific. Passaris says:
Government has an important role and a unique responsibility to provide economic leadership and vision, to invest in state-of-the-art infrastructure, to promote the valuable role of human capital and to enhance the efficacy of an inspired and articulate public policy and competent economic strategy.
The long-term vision can be summarized in employment creation, income generation and baking a bigger economic pie – that is to say, investing in the fundamentals that create economic growth and development.
This is a distilled version of self-sufficiency. Perfect. But generic. How do we bake a “bigger economic pie”? People need to know – inside and outside government – that only efforts that lead to significant new private sector business investment in the province from companies that generate their revenue primarily outside the province will bake a bigger pie. These can be NB firms or national or international firms but we need far more private business investment. Government policies and limited resources should be focused on this goal.
It’s important to make this distinction. The 97% of NB businesses that generate their economic activity only in New Brunswick cannot be part of baking the bigger pie unless they expand outside the borders of New Brunswick (i.e. generate more revenue from outside the borders of NB). Import substitution and increased productivity are also part of the mix here.
Finally, there is a story today about eight small NB firms that received funding for expansion. I am not going to complain about these projects but I will make a point. At least two of the projects involved seasonal jobs. Two, these firms received upwards of $30,000 per job. I hope there is an economic payback model in place on these projects. The average job at $35k will pay out around $3-5K in taxes to the provincial government each year (depending on deductions and spending patterns). That’s between a six and eight year payback on these government investments. I am just trying to illustrate the importance of linking wages to the economic benefit to the province. FYI, UPS received about $10,000 per job to put 900 jobs in New Brunswick back in the 1990s.