It's The Economy, Stupid

According to CIBC World Markets, when it comes to going broke, it’s all about location.

The number of people in Atlantic Canada who filed for personal bankruptcy in 2005 climbed 8 per cent from the previous year, while bankruptcies in Alberta dropped by 13.5 per cent, according to a CIBC World Markets Inc. report.

The regional disparity partly reflects the economic-growth divide in Canada, with the energy-rich West leading the charge while Atlantic Canada and the factory-dependent provinces of Ontario and Quebec continue to grapple with a strong loonie.

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I just got back from watching that film about Edward R. Morrow, Good Night, and Good Luck. While this is no action thriller, it is an interesting film. It’s shot in black and white and weaves in actual footage in a clever fashion.

I’m not a movie reviewer but I will say that having already read about Senator Joseph McCarthy and his Communist hunting activities in the 1950s, I was struck once again about how disinformation can be a powerful tool.

I in no way equate modern day New Brunswick to that time but I think that disinformation as a political tool is alive and well in this province. I got in the mail (as I assume all New Brunswickers did) on Friday my “Pre-budget Consultation” document – paid for by our tax dollars so I assume it was meant for us to review and then be able to have an intelligent discussion (or consultation) about what the budget priorities should be for 2007.

I wonder how much it cost to write, publish and send this document out to 300,000 New Brunswick households? A million dollars? More? Less? No matter. You could have just as easily stamped a PC Party label on that document and called it a promotional brochure for the party.

There was not one shred of objectivity in that document cover to cover. Not once piece of information that would be useful in a ‘budget consultation’. They cherry picked (and then greatly massaged) about a dozen or so statistics and then wrote up a bold piece of public relations.

Nothing about population decline. Nothing about serious industry challenges. Nothing about the increasing dependance on Equalization. Nothing about having the second highest unemployment rate in Canada. Nothing about obesity. Nothing about the least active poopulation in Canada. Nothing about the lowest rates of education in Canada. Nothing about the lowest level of household Internet connections in Canada. Nothing about the lowest level of research and development in Canada.

Just a few massaged statistics. Take my favorite (hence I gripe about it almost daily) – GDP per capita. The Gross Domestic Product (GDP) of a province or country is one measure (and not a very good one) of the size of the economy. On a per capita basis it measures the size of your economy adjusted for a better comparison to larger or smaller economies. In our famous “pre-budget consultation document” we are shown a big chart showing that NB has out-paced the country over the Lord’s time in power for GDP per capita.

Now the fact is that we have underpeformed the rest of Canada all but one of the years Lord has been in power for GDP growth. That is, simply, the growth of the economy (i.e. economic growth for you slow learners). However, because New Brunswick is having serious population issues, on a per capita basis, the figures look somewhat better.

But think about the twisted logic of that (disinformation). If New Brunswick’s economy lost half its population, its GDP per capita would look better than Alberta. But that would be cold comfort, wouldn’t it?

Then my second favorite disinformation – exports. The Irving Refinery came on line early in Lord’s mandate and added something like $1 billion to the overall exports from NB. Presto! Great statistic! NB leads country in exports growth! But peel away the refinery and we are hurting on a while whack of different industries that are dependant on exports. But no mention of that in the “pre-budget consultation document”. No, we are told that exports are booming.

Thanks very much, Mr. Irving.

I know that some of you will Google disinformation and come up with a differing definition than mine. But look beyond definition to the point I am trying to make.

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For as long as I have been involved with economic development I have been a fervent believer in the critical importance of airports as facilitators of economic development. The more flights to diverse destinations at competitive prices the better. Once, on a whim, I looked at tier two cities in the US (under one million population) and correlated population growth with status as a regional hub – and found a tight correlation. Now there are many factors that drive growth but fast growing cities tend to have fast growing airports.

But the Globe and Mail story this week, was not exactly what I had in mind:

Air Canada adds express route from Alberta to Newfoundland
JANE ARMSTRONG

On one level, it’s yet another sign of boom times in Fort McMurray. Air Canada plans to start same-plane flights from the oil-rich northeastern Alberta city to St. John’s.

Read another way, the new flights simply make it easier for job-starved Newfoundlanders to leave home. It’s called the Fort McMurray-Toronto-Newfoundland Express, and the new route illustrates the impact the Alberta oil boom has had on Canadian job migration.

Despite enjoying an offshore oil boom of its own, Newfoundland still exports workers by the thousands and the biggest draw of all are the Alberta oil sands. It’s estimated that about 17 per cent of migrants to the city of almost 75,000 are from Newfoundland.

Golly gee, isn’t Air Canada nice. Even making it easier for Newfoundlanders to move to Alberta. I expect a direct flight from the Acadian Peninsula will be next.

But that should encourage the government. A mass exodus would, at least in theory, reduce the unemployment rate.

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Somebody from the Miramichi told me “never mess with Tanker”. In fact, the rumours were swirling during the hospital cuts that he would leave the Tory ranks. He didn’t then, but he does now.

There is starting to be a bit of trend here. It has taken 6.5 years but it seems clear to me that Premier Lord doesn’t engender a lot of loyalty. When Elvy quit, he said ‘nobody’s replaceable’. I have heard through the grapevine that a number of staffers were let go with equal nonchalance. Work like a dog for me and then don’t let the door hit you on the arse on the way out.

Leaving Malley out of Cabinet is one thing. Telling the Canadian Press that the guy who holds the balance of power asked for bribes to stay in the party is another:

Lord told the Canadian Press he could’ve have held onto Malley as a Conservative if he had agreed to a series of demands Malley made after being left out of the latest cabinet shuffle.

Lord said Malley asked him for several political favours. They included the appointment of a friend as a judge and more money for his Miramichi constituency office.

The friend, Fredericton lawyer Cleveland Allaby, told CP: “This whole thing about a judicial appointment is bull**.”

It’s obvious the Lord wants an election, soon. That’s why Elvy, Mesheau, et. al. announced their intention not to run almost two years in advance – they knew this was coming.

Actually, as I have mentioned before, this is not a bad time for Lord to call an election. It is well in advance of the potentially devastating Census data that will start coming out early in 2007. He can run as a good friend of the “Prime Minister” and there is no guarantee he could say that in 2007. He will be running in advanced of a power rate increase that we will all feel acutely in our wallets (a so-called pocket book issue). Imagine the average NBer figuring out they spent several hundred dollars more on electricity and having that tied by the media and the Liberals to Lepreau, Orimulsion, etc. (rightly or wrongly). He will be running before the mill closes in the Miramichi – likely in 2007 – unless there is a miracle. All in all, a spring or even summer election in 2006 (when does the house sit?) would be about the best time for him.

*He could run on the low unemployment rate (the opposition still hasn’t figured out how to say our unemployment rate is second highest in North America and that Saskatchewan has a 4% unemployment rate and is freaking out about population decline).

*He could run on his friendship to Stephen Harper and maybe even have old Peter Mackay do a swing or two through the province.

*The Opposition may be caught off guard and still not ready. Has Claudette agreed to run?

Bottom line – it won’t be any better next year. If the public buys these little statistic slights of hand and wants to align their Premier with the PM, then maybe he can win. He then can manage through all these upcoming crises (Census, pulp mill closures, etc.) and then bow out after 10-11 years in power and still be a teenybopper politically speaking. Heck, by then the Federal Tories may be looking around again. If he loses, he has a lot more political options with the PCs in power federally as they are now (patronage, crown corps., biding his time until he can run federally, etc.).

As of right now, my prediction would be that he will get hammered. Claudette will run and hug everybody to death. Graham can dole out promises like any opposition party. Lord will probably still win most of Moncton and Fredericton seats but nowhere else. The Tories may be reduced to 15 seats or so.

Then the Desseruds, Savoies, et. al. will weigh in on what went wrong. He was too arrogant some ex ministers will say. He was too indecisive some local economic development officials will say. He was too young some pompous blogger will write.

Then the cycle will start over again. Out with the old, in with the new.

But in 2013 or so, will things have substantially changed? Will prosperity abound? Will Al Hogan continue to sing Lord’s praises – in whatever capacity he finds himself?

The only question now is when Tanker will pull the trigger. Based on my limited exposure to the Miramichi, he will look like a hero in that community. Lord’s comments about ‘political favours’ are obviously to sully this image of Tanker but I don’t think it will work. He (Tanker)will look courageous to most Miramichiers who are understandably worried about the future and who legitimately feel that nothing is being done. Lord’s message of small business tax cuts, ‘sound’ fiscal management, etc. don’t matter much when your community is ‘Tanking’ – no pun intended.

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I have been saying for several years that New Brunswick needs to build better linkages to India. Two years ago Indian firms started making major investments in North America. I begged on these pages and elsewhere for somebody to sit up and listen.

Alberta listened – they have sent trade delegations and I believe have an office there.

Ontario listened – Toronto took a massive delegation there last year and two large Indian firms set up in that city.

Quebec listened – Charest just went last month to India with a large delegation.

NOTE: They didn’t listen to me – just to the tea leaves.

Now, it seems that Manitoba has listened:

Doer meets India’s economic advisor
Published: Tuesday, February 14, 2006

New Delhi, India—Premier Gary Doer and a delegation of Manitobans met with the prestigious Economic Advisory Council to the Prime Minister of India as part of Manitoba’s trade mission to India, Feb. 11 to 17.

I’ll bet you a fiver that our guys (NB) will be the last ones into India for trade & investment. Cripes, CBC’s Jacques Poitras wentthere and essentially did their job for them – and they are still non-commital.

Economic development is like just about everything else in life. If you are quicker, faster – out front of the pack – you can win. If you sit around the dusty, cobwebbed glass tower in Fredericton and wait for the world to come knocking – it never will.

We were out front of the pack regarding the call centre industry in the early 1990s.

We were out front on the IT front with the NB Information Highway initiative in the mid 1990s.

What are we out front on now?

Cutting small business taxes, for sure.

Anyone else? Beuller? Beuller?

That ain’t gonna get it done.

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Those of you that read this blog know that one of my biggest grumblings about government is that they do so much ‘marketing’ now that no one – even interally to government – can figure out the difference between the spin and the reality.

For example, Finance Minister Volpe issues a ‘backgrounder for budget deliberations’ and it looks like a marketing brochure for the PC Party of New Brunswick. A backgrounder should have the good and the bad – and even the ugly – so that people can add in a meaningful way to the discussion. Volpe’s budget ‘road show’ is more like a PR exercise than a serious and thoughtful discussion about serious challenges facing the province.

Same goes with just about every document published by the government these days. You will rarely read (if ever) in a provincial government publication that the population in New Brunswick is in decline. I have never seen this. Yet the implications of this are massive. Population decline is tying up Saskatchewan in knots. That subject pervades the whole policy development landscape there. But here, it stays quietly under wraps until there is some external influence to address it (like media pressure).

Let’s be clear, Bernard Lord and his cabinet have known that the population is declining since they arrived in office in 1999. The migration, immigration and birth/death data is widely known among policy makers.

So, with that as my own form of backgrounder:

This link takes you to CBC’s medal count page for Turin.

By clicking on the gold, silver, bronze and total buttons at the top of the table, you can rank countries by gold medals won, silvers won, etc., or by total.

Rank countries by gold and Canada looks pretty bad.

Rank countries by total and Canada looks okay – fifth place as of right now.

Rank by bronze and Canada vaults way up to second place – We are doing so well … this validates our amateur sports policy … etc.

This looks like a good metaphor for how New Brunswick governments cherry-pick economic data.

I propose we send Chisholm Pothier (Press Secretary for the Premier) to the Olympics.

You see Chisholm could help position things for the Canadian Olympic team. “We had the best Day 7 in the history of the Olympics” or “Our Bronze medal count is up 50% from this time last Olympics” or whatever.

The Premier’s Office is so good these days at selectively choosing statistics (and getting them published in the media) that I am sure that Pothier would have us coming out of Turin with the best effort in history. Canadians rejoice!

Anyone who can spin population decline and well below average economic performance on just about every economic statistic (GDP growth, housing starts, employment rate, etc.) into prosperity for all could do wonders I’m sure.

Just keep in mind PC Leader Lord’s comments in 1999 before the election: “We are going to replace the spin doctors with real doctors”.

Or maybe I got that wrong. Maybe it should read “We are going to replace the spin doctors with real spin doctors”.

Yes, that must have been it.

With time the mind gets a little hazy.

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Check out Alec Bruce’s piece on the ACOA situation. He’s defending the agency. Guess what. So am I.

I am constantly amazed when westerners speak of their oil and gas as if they had poured it in the ground.

I am constantly amazed that most westerners will defend agriculture subsidies tooth and nail and then hammer ACOA. Agriculture, they pompously state, is subject to ‘forces beyond their control’ such as the weather and international competition.

Yeah, right. And the New Brunswick manufacturer has full control over the rise in the Canadian dollar or in the subsidy regimes of competitor locations.

The hypocrisy of this attitude is just plain silly.

ACOA must remain. But, if I were whispering in MacKay’s ear, it needs to have a much greater presence in international markets promoting both outside investment into Atl. Canada and this region’s product and service providers abroad.

Heck, he’s the minister of Foreign Affairs, n’est pas? Sounds like a one two combo.

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I was shocked to hear Philip Cross, chief of economic analysis at Statistics Canada, and his comments in the Globe & Mail today:

“I don’t know where this idea came from that manufacturing jobs are great,” said Mr. Cross, who crunched the numbers using Statscan data collected over the past year. “There’s nothing exciting about hacking away at a pig carcass outside of Brandon, Man.”

He was basically stating that we needn’t worry about the drop of 120,000 manufacturing jobs in Canada last year (including 2,000 more gone in New Brunswick).

Who the heck is Philip Cross to degrade the jobs of hundreds of thousands of Canadians? For the head of economic analysis, Mr. Cross is showing a depth of ignorance probably only equalled by the number of university degrees he has hanging on his wall.

Canada is highly dependent on exports for the strength of its economy. 75% or so of our manufactured goods are exported. A steep decline in manufacturing in Canada will lead to an inability to fund through taxes all those fat cat, new government and public sector jobs that are coming online.

Here’s an idea. I find it shocking that public services pay the most and are driving the growth of employment in Canada. Why not pay Mr. Cross $15 bucks an hour and the ‘pig carcass’ hacker his wage of $50/hour?

I know, I know. That’s sounds a bit like a socialist revolution.

But I’m just venting a bit. Canadians like paying our civil and public servants more than we pay ourselves. Maybe we even like a bit when they (Mr. Cross) denegrate the jobs that are used to fund those salaries.

But if they lose those jobs – someone will be forced to cut 40,000 civil servants (remember 1994?) and maybe then Mr. Cross will have to take his turn as a ‘hacker’.

I have said this before but it’s worth repeating. I went to a government recruitment function when I was in school in Virginia and the first thing the recruiter said was “you will never make in the public sector what you could make in the private setor”. Then I came back to Canada and read a study that the opposite that the average government employee makes between 10% and 25% more than persons in the same jobs in the private sector.

Only in Canada, eh? Pity? or Pitiful?

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Okay, 0kay, I’ll admit it, I am a bit of a journalism junkie. In fact, in another life I was most likely a hack for some local Biloxi rag.

But this stuff can be fascinating. Take Chris Morris at Canadian Press. He devoted about 20% of the text of his article on the Lord Cabinet shuffle to cover Kelly Lamrock’s verbose commentary. Take a look:

Kelly Lamrock, house leader for the Opposition Liberals, said Lord’s so-called “five-five plan” is nothing more than a publicity stunt.

“Maybe we should have a minister of optics, a minister of pretty folders and a minister of making everything blue because that’s about the level of the five and five,” Lamrock said.

Lamrock said Lord loves to make plans and set goals, usually for many years down the road.

He said the government’s endless to-do lists save it the effort of actually coming up with new ideas.

“He might as well have said every New Brunswicker will have a pony, the ponies will have ribbons and the entire province will be covered in whipped cream,” Lamrock said.

Now, I have read a half dozen stories in the Telegraph-Journal and the Times & Transcript (less Alec Bruce) about government moves recently that included barely a one sentence clip from Liberal Leader Shawn Graham or Lamrock and Morris basically casts cold water on the Cabinet shake up and the reader is left with a pretty negative conclusion. Contrast that with T&T and TJ stuff which is overwhelmingly just transcription of the press release/speech. I’ll be watching tomorrow’s papers to confirm my suspicions on this.

So what do I conclude:

a) Chris Morris, Alec Bruce and Jacques Poitras (and even Hrabluk these days) are secret Liberal plants – strategically positioned years ago by Shawn Graham to slowly erode confidence in the government so that he could seize power in a bloodless coup in 2007.

or

b) They are journalists doing their jobs. Reporting, critiquing and giving the readers/listeners a broader perspective on the issues – not willing just to rewrite government press releases.

I report, you decide.

Off topic:

Speaking of Fox News, have you gotten the chance to listen to this Mike Malloy on Air America? Cripes, this guy makes Rush Limbaugh and Bill O’Reilly look like choir boys. Have a ‘listen’:

Just another rotund, polished Bush Crime Family functionary — this time former FEMA head Michael “Brownie” Brown – sitting at the witness table, telling the tale of his and his superiors’ stupidity, unpreparedness, inability to communicate, false intelligence, missed signals, non-concern, arrogance, toxic narcissism, need to blame someone else, and on and on.

Not unlike the way these thugs have mishandled two completely unnecessary wars. Not unlike the way these criminals have mishandled critically unraveling domestic issues such as Medicare/Medicaid, budget deficits, national debt, environmental and energy issues, defense, all of it spiraling totally out of control, blasting the country into a morass of Gordian-knot-like conditions that will take decades (and near-genius leadership) to unravel. The stance this criminal administration takes on every issue — lie; continue to lie; do not stop lying — is also once again being revealed.

As also were the lies told about Iraq’s WMD, the need to “reform” Social Security, the wondrous blessings to flow from the hatefully misnamed No Child Left Behind act, the lies about energy policy, tax policy, all of it, these new lies being told about the disaster that crushed New Orleans are flowing from the mouths of men who could not sit successfully on a rural county commission.

Phew. Maybe the mind numbing pulp spewed forth on the new Rogers News Radio talk shows needs to get a little more ‘edgy’ to keep up. That would add a little salsa to the Canadian shock radio scene. Imagine if Tom Young talked like this.

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I read all the blah blah blah around the longest time coming Cabinet shuffle in the history of New Brunswick. I notice Kelly Lamrock is getting quite handy with the superlatives.

But I digress.

I was blown away to see that he was dropping veterans Elvy Robichaud, Peter Mesheau and Margaret-Ann Blaney who “asked to be relieved of their cabinet duties”. Now despite my constant poking and probing of both Blaney (you remember “I am encouraged by these numbers” Blaney) and Mesheau, I can’t for the life of me figure out why three of the top Cabinet ministers would quit mid stream a year and change before a potentially challenging run for a third term.

If you have any insight, please dish. And don’t give me that ‘more time with my family’ shtick. I want to know why.

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