On Tourism and Good Paying Jobs

Further to my column this morning, a couple of charts worth considering.  I do not support a significant increase in government focus on tourism.   Again, I reiterate that there is a role for government to play in coordination and support for the tourism industry but I think that in a time when we have to make hard choices, I wouldn’t place more resources here.

The reasons are both economic and workforce related.  On the economic front, tourism jobs are low paying and therefore generate limited tax revenue for government.  On the workforce front, I don’t think we can expect people to stay in New Brunswick and work in tourism jobs.  This sector is already feeling the pain of a tightening labour market – I have talked with several industry players that cite the lack of a workforce as a major problem.  There may be some potential to fill the gap with immigration but, again, do we want to create jobs that generate a couple of thousand in tax dollars for the provincial government when it costs the government over $20,000 per employed person to pay for public services in the province (including debt servicing)?

New Brunswick is not overly exposed to the tourism sector.  If we group the employment of the two sectors most associated with tourism (Arts, entertainment and recreation/Accommodation and food services) we see that New Brunswick has slighly below average reliance on these jobs.

Tourism Jobs per 1,000 Employed Persons (2008)

BC 113.7
PEI 112.8
AB 95.1
NS 90.8
SK 90.3
NB 85.4
ONT 83.6
QC 83.0
MAN 82.4
NL 75.0

Source:   Statistics Canada. Table 281-0024 – Employment (SEPH), unadjusted for seasonal variation, by type of employee for selected industries classified using the North American Industry Classification System (NAICS), annual (persons)(4,14).

New Brunswick can`t afford to directly support the creation of lower paying jobs.  The average wage in New Brunswick is still second lowest in the country.  We need to focus on higher wage jobs. These can be in the manufacturing, services or technology sectors but the litmus test for sector focus should be wage rates.

Average Hourly Wage (all workers) – 2008

Alberta $23.68
Ontario 22.15
British Columbia 21.46
Saskatchewan 20.34
Quebec 20.03
Manitoba 19.24
Newfoundland and Labrador 18.85
Nova Scotia 18.12
New Brunswick 17.79
Prince Edward Island 16.96

Source: Statistics Canada. Table 282-0072 – Labour force survey estimates (LFS), wages of employees by type of work, North American Industry Classification System (NAICS), sex and age group, annual (dollars unless otherwise noted) (table), CANSIM (database).

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5 Responses to On Tourism and Good Paying Jobs

  1. Anonymous says:

    You are right however this is a tough addiction to break.

    Convention centers and golf courses make for great photo ops and quick fix jobs (albeit lower end jobs like you have shown). It takes sound strategy, focus, and sustained effort to attract or grow quality companies (developed markets and established access to capital).

    Our traditional resource-based industries are in trouble and our poor productivity performance is beginning to show its problems in the face of global competition and a stronger dollar. It is time for a meaningful economic development strategy for New Brunswick. I would dearly like to see true economic development become a key policy issue in the upcoming election.

  2. Samonymous says:

    First you have to have something to sell. And then when you do, you have to sell it. And sell it hard. People aren’t going to pull off the road unless it entertains them or educates them.

    I remember reading an article in our local newspaper, from a very intelligent university professor, (my town being Sackville, NB) that it would be a good idea to flood the marsh land and make it into a bird watching sanctuary. They said it would bring in significant tourist dollars. Problem is, we already have a similar structure (the Waterfowl park) which was originally geared (and planned) to attract birdwatchers from around the globe which would pour money into the economy. It never materialized as a money making entity (nor is it attracting that many people). Although, it did attract a few in the first two years as government poured a bit of money to hold a “theme festival” to promote it. It soon died off (for some reason or other) and it is now just a park for locals to walk through (not many even do that I might add).

    I mentioned that it may be a good idea to make the park into a giant skating rink, with Christmas lights, music and skate rentals. It would be visible from the main highway and would possibly? be an incentive for more people to pull off and visit that area of the town. Maybe even have a map where you can skate down to the local businesses.

    Anyway, enough of that rant. I guess what I’m saying is that we need to find interesting ideas to promote to the public and sell them. I was in Gettysburg on my way back from Washington and was in awe of how well they promoted and presented part of their cherished history (and I paid a pretty penny to go see it, and we had to wait to get in as there were numerous groups). Why we don’t do such things in places like Amherst, NS where the Four Fathers gathered or have a Prime Minister’s museum or Library (Tupper and Borden) is beside me.

    It’s high time we got our thumb out of our but and started selling our province. And I don’t mean its power lines.

  3. On the other hand, if the tourism sector strengthens and there is a continued shortage of workers in the area, this will force wages up, which will improve NB’s average hourly wage. Because, after all, you can increase an average not only by tacking on higher-paying jobs, but also by improving the pay in lower-paying jobs.

  4. Paul says:

    I couldn’t agree more. As someone who grew up serving tourists in my family operated tourist business, I think the government should have a very limited role. I do think we are getting a return in our investments in some of the anchors like Acadian Village, King’s Landing, MT. Carleton Provincial Park, etc. and they play a larger role in the wider community but to see tourism as a solution and invest heavily with government money is not wise.

    The family tourist business still operates, however it never was, nor could it ever be, a primary source of income. It’s a seasonal business. The reason my father started originally was because he owned another seasonal business that occupied his time in the winter months, delivering home heating oil and he needed income in the off season.

    He built the business, never borrowed and never looked for any government involvement. The game changed, and private investment dried up in the industry as the provincial governments increased the regulation from the ridiculous to the sublime and then started picking winners and losers in building businesses.

    Government also heavily subsidized the entire industry with labour and cash for two or three years, and then pulled the plug. Numerous failures after that, and the province is littered with failed attempts at building mini anchors. Day Adventure Centre anyone!

    I witnessed some incredibly shaky dealings that makes my stomach turn on how much money is flushed down a toilet. It is the reason why I have a very cynical view of all the economic development dollars we spend. (As an aside, if I were looking a place to save money it would be in economic development.)

    Tourism is a solid source of extra income, for both individual’s and the province, and some people may make a great living off it but that is limited in New Brunswick. It is not the answer to developing an economy in New Brunswick. It is also a business best left to develop on its own, like retail.

    While some regulation is necessary, government had so over regulated the industry that last year they stopped requiring a license because the regulations were “unenforceable”. That’s true.

    I also know of two investors who were willing to invest privately several years ago, but the industry had become so over regulated, and with governments supporting other projects and because of that support, would not support their investment, they walked away.

    Florida didn’t pick Disney, Disney picked Florida. If someone from Disney shows up and wants to build a park, help them out, we’ll take it, otherwise, help the industry promote NB as the beautiful place with the wonderful warm people that it is.

    But I’m with you on this one David. Support tourism by offer financing to start ups, like any other category of business, and let the industry evolve on its own.

  5. So what you are saying is New Brunswickers should dig for oil like Albertans? We don’t have oil, but we have an ocean. Albertans like the ocean…

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