It's The Economy, Stupid

EI claims in New Brunswick were up 5.8% according to new data Statistics Canada (year over year from June 2004 to June 2005). During the same time, the number of working New Brunswickers only dropped by 0.2%. According to the TJ (not the TT), EI claims have reached a two-year high in N.B.

The following is my monthly ‘employment’ tracking chart. Manitoba is creeping up on New Brunswick. If the trend holds, only Newfoundland and Saskatchewan will have a worse job creation record since 1999. PEI’s employment growth continues to impress. Nova Scotia has dropped – most likely to the lack of offshore-related employment growth.

Only Newfoundland has a lower ‘employment rate’ than New Brunswick among all the provinces.

Growth in Employment (%)
July 1999 to July 2005

Alberta – 14.2%
BC – 13.0%
PEI – 10.9%
Ontario – 10.9%
Canada – 10.2%
Quebec – 9.4%
Nova Scotia – 5.9%
New Brunswick – 4.4%
Manitoba – 4.3%
Newfoundland and Labrador – 2.9%
Saskatchewan – 0.4%
Source: Stats Canada

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A few day ago I wrote a blog on the issue of presence in the United States. That very few people even know where Atlantic Canada is let alone its business environment and potential. I further made the case for raising our profile among business leaders there.

Well, another little example of this ignorance about Atlantic Canada. The Pittsburgh Post-Gazette did a survey last week to determine if people knew where Nova Scotia, the birthplace of their new hockey star (Sidney Crosby), was. A full 58% of of Pittsburghers had no idea where Nova Scotia was. Some thought it was in Maine. But the funniest thing of all was the Pittsburgh Post-Gazette’s reponse to this lack of geographic understanding:

“… Now, admit it. A good 57.9 percent of you didn’t know your Nova Scotia from your focaccia until the Penguins lucked out and landed the hockey player of the millennium, Sidney Crosby of Cole Harbour, Nova Scotia. If you’re geographically handicapped, Nova Scotia is a beautiful island northeast of Maine …”

The Island of Nova Scotia. Has a nice ring to it.

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I went to a conference in the mid 1990s where the Governor of Maine at the time, Angus King, went on and on about how NB Premier Frank McKenna was his ‘hero’ and ‘role model’ and such things.

Now, Maine newspapers are awash with anti-New Brunswick comments over Premier Lord’s opposition to the proposed LNG plant for northern Maine. Consider this comment in the Bangor Daily News last saturday:

So, the threat by New Brunswick Premier Bernard Long to quash two proposals to build liquefied natural gas terminals in Maine is troubling.

Notwithstanding the misspelled name in the article, and without even commenting on the merits of the LNG plant or its opposition, I just think we have come a long way from McKenna as hero to the Governor of Maine to Bernard Long as the guy trying to kibosh economic development in the poorest region of the United States.

The article continues:

Mr. Lord said the Canadian government could say no to LNG in Maine just as it said no to an oil refinery in Eastport 30 years ago. First, it wasn’t Canadian opposition as much as the U.S. government’s concern over endangered bald eagles that doomed the refinery. Second, saying no to projects on one side of the border, while championing those on the other is hypocritical.

The article concludes:

Mr. Lord should look out for the interests of his countrymen and his constituents, but not at the expense of his neighbors.

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If you have been reading my comments regarding ‘young’ Premiers in New Brunswick, you will know that this trend has disturbed me over the years. Why do we need to elect young, unexperienced lawyers and then ask them to oversee a multi-billion dollar, highly complex organization such as a provincial government? To make matters worse they tend to select their key ‘management’ team by political affiliation and loyalty rather than competency. So you end up with an inexperienced (albeit charismatic, good looking, bilingual, et. al.) leader and a bunch of politically motivated folks running this incredibly important organization.

I have called for the parties to choose a more experienced leader. We have gone with the teenyboppers for the past 30+ years and it has paralleled the province’s slow but steady decline.

So, after much deliberation, I put forward Robert Irving, one heir to the Irving empire and President of Majesta, Midland, Cavendish, the Wildcats, etc.

Why?
*Previous experience running multi-million dollar businesses. In fact, under Robert’s leadership these companies have grown strongly and even acquired national brands.
*Previous experience managing hundreds, maybe several thousand, employees.
*Experience managing complex issues in complex times.
*Financial management issues – managing a profitable, hundreds of millions in revenue, organization.
*He’s young but not too young.
*He’s internationally connected.

Challenges:
*He is not nearly as charismatic as the current Premier
*He is not bilingual like the current Premier
*He most likely has no interest in the job, unlike the current Premier

But I still think we should develop a ‘Draft Robert’ campaign. It doesn’t matter which party. There is little differentiation between the two these days anyway.

Imagine. A successful and internationally savvy business leader taking the helm of the provincial government. No more diapers. No more uncertainly. No more lack of clarity. No more timidity. No more of that cursed ‘smoke and mirrors’ that is put up. More straight talk about the state of the union.

And think about it. Al Hogan would onside for obvious reasons.

I can only dream….

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After reading another one of Al Hogan’s cooing and gurgling pieces about Premier Lord, it got me thinking maybe I am wrong. Maybe Al’s right. Maybe Premier Lord is an outstanding leader and will go down in history as one of this province’s great Premiers.

But, I have to ask, how do we define this? As I have stated many times before, history judges its political leaders is by the impact they had on their region. Ronald Reagan ended the cold war. Louis Robichaud ushered in a new era with equal opportunity. I have to ask Al, what will Premier Lord’s legacy be? After six plus years in office we should be getting a good picture.

My take on this thing is this. New Brunswick’s economic crisis is the overwhelmingly greatest challenge to our future. We are now more dependant on Equalization and Employment Insurance welfare than at any point in our history. And, there are rumblings out of Ontario that that province is ready to crack the whip on its subsidization of the poorer provinces. Shouldn’t we expect that our politicians would make the economy their top priority? Shouldn’t the reduction in dependance on Equalization be, by far, the #1 priority?

I think that the New Brunswick Premier should make the economy its #1 priority. It should have a serious plan backed up by major investments to attract foreign business investment to replace the declining investment in our traditional industries and to provide a firm economic foundation for our future. I think the government should spend every waking hour trying to get the international investment lense focused on New Brunswick.

But that is simply not the case. We spend among the lowest amounts on economic development when we should be spending the most.

And the irony of this is that the warning signs are everywhere and there seems to be limited interest among the politicians, media and even the general public.

Our politicians govern as if it is politics as usual. As if we need to ‘incrementally’ move things forward.

We have not witnessed population decline in New Brunswick since the Great Depression and we haven’t had consecutive years of population decline (multiple) since Confederation. Shouldn’t that be a massive cause for concern? By my simple calculations, we would need to double the size of the workforce and hold other costs constant just to eliminate our dependance on Equalization. Shouldn’t that be the goal?

How do we get out of the welfare mentality when we seem to embrace it? Premier Lord has spent more time looking for federal government handouts than looking for new business investment.

Maybe I’ve got it all wrong. Maybe we are on the road to ‘prosperity’ as the Premier maintains. Maybe Al Hogan is right and history will remember this time as one of the greatest booms in the province’s history.

Maybe….

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Start Me Up

The Rolling Stones are coming to Greater Moncton. This is a great story for our region. Our small community is featured on the same list as Los Angeles, Chicago, Toronto, Rio De Janeiro and Mexico City.

We should be thrilled, right?

Wrong. At least if you read the national media. Last week in the Montreal Gazette it was stated that Moncton residents “are angry about the Rolling Stones show”. “Down in Moncton, it’s the Riling Stones” quipped the Ottawa Citizen and the Globe & Mail headline read “Moncton residents fret about Rolling Stones show”.

Now, I think it goes without saying that if 60 or 70 thousand people converge on Greater Moncton it is bound to be somewhat of an inconvenience. Yes, there may be line ups at the local restaurants. Yes, some of the roads around the concert site may be closed. Yes, there may even be a few traffic jams here and there.

But for those of us that are grumbling about the concert, aren’t we missing the big picture?

After all, when a Moncton-sized snowstorm hits our community, the national papers are filled with quotes from Monctonians proudly saying they made it to work through three feet of snow. Or they had to use their snow shoes but they made it to work on time. The stuff of legend.

But, when a similar inconvenience hits the community, in the form of a global brand name called the Rolling Stones bringing tens of thousands of visitors, we get ‘angry’ or ‘riled up’.

Where’s that same level of pride? Instead of snowshoes, you may have to walk to work in sneakers – but isn’t it worth it?

Based on the experience with previous concerts such as the Classic Rock Festival in 1998, the Rolling Stones concert should bring well over $20 million in economic activity to our community.

But the benefits go well beyond that.

This concert has helped raise the profile of our community across North America and beyond.

In my day job, I spend my time scanning international media sources for information that is relevant to my clients. I can tell you that Moncton was mentioned more times in national and U.S. media sources as a result of the Rolling Stones concert than all other stories in the previous 12 months combined.

There are about 95,000 people living in the urban area of Moncton, Riverview and Dieppe. Across North America, there are over 430 urban areas that have at least that population or more. Yet, of those 430 locations, only a small handful were chosen to host the Rolling Stones.

This is a great achievement. Have you ever heard of East Stroudsburg, Pennsylvania or Lumberton, North Carolina or Homosassa Springs, Florida? Neither have I but they are all urban areas larger than Greater Moncton.

A key part of economic development is attracting international businesses to your community. Companies like UPS, Exxon and AOL. If they don’t know you, there is much less chance they will ever set up here.

Now I am not saying that all Greater Monctonians are against the Rolling Stones coming to town. Far from it. I just hope that the next time I pick up the Globe and Mail or the Ottawa Citizen, the headline reads “Greater Moncton residents thrilled to host the Rolling Stones”.

Because in our community’s quest to become a vibrant and successful economy, we still have a long way to go. And the international exposure brought by this concert is one small step on this journey.

So bravo to the City of Moncton for landing this concert. I encourage them to work even harder to raise the profile of our community on the world stage.

Moncton, New Brunswick? Where’s that? Oh, that’s the place where The Stones played. I know that place.

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I journeyed down to Washington this weekend to see the Expos – er, Nationals play. After being a fan for 25 years, a little thing like changing cities wouldn’t sway my allegiance.

But after spending a few days in the good ol’ USA, I bring forward a few considerations.

1. Branding
Driving down here I saw billboards advertising Tennessee, Lousiana, Florida, etc. as a good place for business. I heard radio advertising and watched TV advertising of location pitching themselves as a great place for business. Pennsylvania has their Website on their license plates. It’s clear that U.S. states are spending massive amounts of money trying to brand their communities as the best place to locate business. My question is, what is New Brunswick doing?

2. Sourcing Investment
Related to the first point, the US is the largest source of investment but it is also, by far, the most contested. I am not sure that New Brunswick could spend enough money to really get noticed. Maybe we should try some other markets. How about setting up a sales office in New Zealand? Or Brazil? Or India (watch out Ontario, Alberta, Sweden, Ireland have all set up sales offices in India in recent months)?

Guess what, New Brunswick has zero ‘sales’ offices in foreign countries. We spend almost nothing on marketing our province (relative to other states/provinces).

We need to significantly ramp up our marketing efforts to promote the province as a place to do business. Instead of running joint advertisments with beer companies promoting tourism, how about running joint ads with Exxon promoting business investment in our province?

We need to attract an order of magnitude more investment in order to make New Brunswick a self-sufficient economy. I don’t care if that investment comes from Dubai, New Delhi, Wellington or Boise.

Note:
I did read Al Hogan’s editorial about the Premier’s visit to Moncton last week. I hope that some of those ‘leaders’ brought to the attention of the Premier that non-location specific business investments into Greater Moncton are off 80% since he came into office. I hope that our ‘leaders’ haven’t forgot what drives economic growth. During the 1990s, over two dozen national and international companies such as UPS, FedEx, Exxon, etc. set up here creating over 4,000 jobs. This economic activity stimulated the secondary economic growth from retail and construction as well as other service jobs. Since 1999, this external investment activity has dropped of dramatically. There have been some expansions of existing facilities but the new investments have been minimal.

The new Home Depots, Walmarts and residential housing will subside without that primary economic activity.

So, I hope that the ‘leaders’, instead of lobbying for more government spending in the city, really pushed the Premier on the need for more external business investment. I hope the Premier has a plan for the ‘next’ call centre sector. Without a similar initiative, New Brunswick as a whole will continue to decline and that will eventually hit Moncton.

You would think that even the Premier’s press secretary, Al Hogan, would realize that economic development follows a series of cycles – primary investment, secondary results, and then….

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I know I said I would lay off Al Hogan over at the T&T but I just couldn’t resist discussing today’s ‘We Say’. Here it is:

We say: N.B. has an uncanny ability to produce national quality leaders

Thinking of our premiers since the 1960s there are a surprising number of similarities. Each has had an abiding love for his province; each has taken power at a relatively young age and promoted a unique vision for the future; each has displayed a strong personal approach reflecting their own personalities; none could be called “bland”; all have evoked strong and passionate feelings among the public (pro and anti); each has managed to earn the respect of most citizens, if not always their votes; and each has left a strong legacy and foundation for their successors. They have also all been conciliators and men who understand both linguistic groups sharing the province; builders of bridges.

Al has an uncanny way of of living in a phantasy world. Let’s deconstruct his commentary, shall we?

Comment:
N.B. has an uncanny ability to produce national quality leaders.

Rebuttal:
When was the last time there was a Prime Minister from New Brunswick? You guessed it.
When was the last time there was a ‘powerful’ Federal minister from New Brunswick? You can debate Doug Young but hmmmm.

Comment:
Each [Premier since the 1960s] has taken power at a relatively young age and promoted a unique vision for the future;

Rebuttal:
Newsflash, Al. Electing young Premiers has been part of the problem. These kids have had a hard time making decisions and showing leadership and we have paid the price. For our next Premier, give me a seasoned veteran with 25 years of leadership experience, please.
And as for a unique vision, what vision? Among the worst economies in North America; among the highest rates of out-migration; population decline; among the lowest rates of education and literacy in Canada; and most importantly, under these ‘visionaries’ we have become solely and completely dependant on Equalization and EI.

Comment:
Each has left a strong legacy and foundation for their successors.

Rebuttal:
Huh?

Conclusion:
This kind of self-serving, soft ball journalism that offers absolutely no challenge to our politicians to show any kind of leadership is just plain silly. If Al wants some real leadership out of New Brunswick, he should look for tangible results and not just platitudes. When our population starts growing again, strongly, let’s give a cheer. When our rural communities start to hope again, let’s give a cheer. When we rise from last to maybe 5th or 6th in Canada for education performance, let’s give a cheer. When we stop the endless flow of our best and brightest leaving the province, let’s give a cheer.

But until then, let’s make at least some attempt to challenge our leadership and not continually smooch their backsides.

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You know, one of the things that is most frustrating about journalists in New Brunswick is that they never seem to put economic matters into a context that provides the reader a complete picture of the actual story. For example, the TJ runs a story last week:

Provincial housing market riding a heat wave
National real estate stats show NB has third most active housing market in Canada
By Khalid Malik
Telegraph-Journal

Now, Khalid did his homework. He compares this year’s data to last year’s data. He gets a quote from various experts, etc. All kosher, right? Provincial housing market booming, right?

Maybe.

Here’s my assessment.

There were 122,895 homes sold in Canada in the second quarter of 2005. That’s 4.1 per 1,000 Canadians. There were 1,638 in New Brunswick. That’s 2.2 per 1,000 New Brunswickers.

Now before you get into a protracted debate about how New Brunswicker’s don’t move alot compared to Ontarioians and we can’t compare apples to oranges…

OK. But read Khalid’s headline: Provincial housing market riding a heat wave. The assumption here is that lots of houses being sold is the sign of a good economy. I’m just saying that you can’t take a number (1,638) and another number (9%) and say presto! boom.

As the old saying goes 9% of nothing is still nothing. Khalid should have done his homework and told readers that the New Brunswick economy still generated only half the sales per capita as the country as a whole and only a third of the home sales in Alberta.

And they should use the same methodology with retail sales, GDP growth, EI data, etc.

Context, folks. Give us context, and then, like FOX NEWS, “You Decide!”

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Talk about spooky. I just came across a story in the Liverpool Daily Post in the UK. Here’s a quote:

Frank McKenna said: “This is a sad day for Liverpool, sending a signal to the world that we are a no-go area for private investors. I had hoped that finally common sense would prevail.

Now, the last time I checked, Frank McKenna was in Washington taking on Fox News.

So a little checking and it turns out that this other McKenna is in charge of an economic development group in Liverpool and, true to the name, fighting for business investment into the community. Funny, huh.

Unfortunately, the other ‘David Campbell’ is a washed up rock star from Australia.

Oh well, what’s in name.

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