It’s The Economy, Stupid

I’ve read some strange things in my day. As my father once said, paper won’t refuse ink. That ditty gets amplified in the blogosphere.

But this is crazy.

Essentially a conspiracy theorist who actually thinks that NSBI is part of an international conspiracy to further international terrorism.

Let me respond to a couple of his whacked out comments:

The first question that must be asked is why are Butterfield really coming to Halifax Nova Scotia? This nation’s financial centres are located in Toronto and Montreal.

it’s amazing how people that claim to be so smart can be so dumb. Why is it so hard to believe that Stephen Lund and his team actually spent years working with the financial sector and has convinced them to locate in Nova Scotia? Is this guy’s opinion of Nova Scotia so low that he thinks that company’s have no reason to locate there? (other than devious reasons)

Then he goes into his silliness, and then this:

Considering the present demographics extant, I would ask where Butterfield Bank intends to get these 400 “Nova Scotia workers” from?

Again, what a dissappointing attitude towards Nova Scotia. To be clear, the local educational institutions are working with NSBI and the firm to ramp up the 400 workers over time. Also, to assume that people won’t move from other areas of Canada to Nova Scotia. That shows more ignorance than his crazy theories. When RIM announced in Halifax, they got requests from all over Canada - unprompted - from people wanting to move to Halifax.

“Marcus Leja from Calgary, Canada writes: If Nova Scotia Business Inc. is ‘attracting’ (i.e. bribing) Bermuda financial institutions to open offices in Halifax, then there is nothing impressive about this story at all. Considering the high education level of the Halifax area population, the fact the provincial government has to provide handouts to business for it to open there is absolutely alarming.”

What a bunch of unadulterated bull crap. Alberta doles out more ‘bribes’ in thier language to attract international investment (and to prop up agriculture) than in Nova Scotia’s wildest dreams (through incentives to the oil sector). How can so many people be so uninformed? Does anybody have an answer?

The Eagleman thinks that this new payroll rebate plan, Nova Scotia Business Inc has been playing with, is nothing more that a scam.

For every dollar rebated to companies throught the payroll rebate plan $3-$4 are put into the local economy from personal, corporate, property, sales and other taxes.

If that’s a ’scam’, I say bring it on. And as for Calgarians with their little biases against Atl. Canada, either take ten minutes to educate yourself or shut up. Alberta (and the Feds) have put in place one of the most aggressive tax break regimes in the world to attract investment into the oil sands. The agriculture sector is subsidized in Alberta more than all industries in Nova Scotia combined.

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Just kidding.

But seriously, I just had a cheese and spinach omelette with a guy someone once called New Brunswick’s first Internet Cowboy - and he has the hat and boots to prove it.

The ‘he’ in this case is David Jonah who, besides being an excellent storyteller, is my ‘host’ or Webmaster or whatever you want to call him (Local in the Know).

And David had a bevy of statistics on the davidwcampbell.com blog and I will impose these on you for your edification.

In the average month, between 4,500 and 5,500 people stop by the blog. That used to spike more after a CBC commentary but I haven’t been called for many of those recently but the numbers over the past three months are still quite strong 4.5k - 5.5k visits per month (people not Google).

On a daily basis during the week visits range from a low of 150 to a high of 400 or so.

Google stops by the most of the search engines with about 15,000 visits over the 2+ years.

This is interesting, the average visitor stays for over four minutes (2.5% stay for over an hour - I suspect this may be Al Hogan :-)). I’m told this is twice as long as the average visit to an average web page which means either a) I take too long to say what I am trying to say or b) you are slow readers.

There have been 6,809 views of the blog coming through the davidcampbell.xml RSS.

The Parrsboro/Headz story really hit a nerve - it was viewed by over 516 individuals.

An estimated 42.4% of you have added the blog to your favourites (I don’t know how they calculate this but David tells me this is impressive).

76.7% of you come in directly either through a bookmark or typing in the url. Only 23% come in via a search engine like Google (I’m told this is a good stat as well).

Of the folks coming through search engines, a few of you are trying ‘david campbell’. But that is not likely to get you to the blog. There’s an actor from Australia that’s far better looking that comes up first. You are better off with david campbell and moncton or some such combination.

Our old friend and blogging colleague The Sorry Centrist has linked to this blog a pile of times. Thanks for the free promotion Scott. PoliticsNB has seen fit to link to this blog a few times as well.

Finally, 25.3% of you are coming from an unknown operating system which would indicate most likely from government websites (I’m told). Let me just reiterate my respect for public servants - in this I’m sincere - even when I ocassionally chastise for some reason or another.

Essentially, I have the readership of a small magazine run. I am not sure what that means but I think it means that a few people are interested in the topic of economic development in New Brunswick and even though many don’t agree with my approach, we can have a dialogue and isn’t that the intent?

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You have to wonder if NSBI had all these projects in the bag and just staggered their public announcements. There have been I think about eight announcements of projects involving payroll rebates in the past month representing well over 1,400 high paying jobs.

Here’s the latest:

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I just heard Shawn Graham on CTV talking with Jane Tabor at the Liberal convention. He has the shtick down pretty good - in the short term more Equalization (10 province/resources revenue in standard) to lead to a weening off within 20 years. Taber expressed some doubt that NB could ever achieve self-sufficiency but Graham never wavered.

What’s curious to me is this. If Graham wants the $150 or $200 million more from the new Equalization formula to invest in growth that will reduce the province’s dependence on Equalization (all $1.4 billion of it - soon to be $1.6 billion in Graham gets his new formula) why fight for a new Equalization formula at all? Why not try and negotiate a new $150 million multi-year economic development agreement with the Feds?

One would presume that if the goal is to reduce the $1.4 billion in Equalization over 20 years, the province better get crackin’ and you don’t do that by taking in ever more amounts of Equalization for the next 5-6 years.

If NB just gets a sweeter Equalization deal, the temptation will always be there to rely on it - not only not reducing it the very nature of the formula means that as NB falls deeper into population decline and economic hardship (such as mill closures), we get more and more Equalization.

Whereas a dedicated joint Fed/Prov economic development agreement over 5 years, has to direct the funds to economic development projects. In addition, I don’t think that a change in government would matter. What government is going to cancel a program who’s very goal is to lead to ’self-sufficiency’?

Quite frankly I fear that the more lucrative the Equalization program, the less impetus there will be for real change in New Brunswick.

As we learned with Bernard Lord, it’s a lot easier to rake in the Federal cash and spend it on health care than to try and seriously tackle the economic problems in New Brunswick which will actually cut Federal Equalization cash.

If Graham is serious about self sufficiency, he is going to have to make serious changes to how things are done in New Brunswick. Serious policy changes that will lead to 3-4 times as much private sector investment in the province. Serious investments in building an environment conducive to attract investment and stimulate real entrepreneurship.

A good first step would be publicly committing to serious new funding for economic development. Not just a few bucks more but a doubling or tripling of funding and a clear strategy with real targets and significant accountability. We don’t have time for seven years of more coasting.

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The Amherst Daily News and the CBC are reporting that the mega project that would have brought 1,500 jobs to Parrsboro may be in jeopardy.

While no statement has come from Headz Gamez International (H.G.I.), unofficial word from a company source has confirmed that president and CEO Kerry Martens had sold his shares in the company. Several staff members have been laid off already, and work at the old post office building has come to a halt.When contacted by telephone early on Monday, Martens would say only that further word on the development would come later this week.

If it’s true that would be too bad. The Georgia state government put $400 million into a KIA plant in a place more remote than Parrsboro. It is a trend now down south to locate the large manufacturing projects in rural communities. In Canada, it seems that most major manufacturing projects still go to the areas around the large urban centres: Montreal, Toronto, etc.

This would have broken that mold and breathed a little economic life into that region.

I hope it goes but if it doesn’t, I’ll still make the case on these pages that this type of project makes sense.

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The TJ is running an article this morning making the case for a provincial ICT industry association.

I agree.

However, there are industry associations and then there are industry associations.

In the past there have been attempts at an industry association for the ICT sector in New Brunswick but after government funding expired, so did the association.

There is a tendancy for industry associations to become organizers of golf tournaments and annual back slapping events. Feel good organizations that end up not being able to get private sector firms to continue to pay dues because they don’t see the value.

A good association tackles - hard - the key issues facing the industry. It gets concensus on the issues and works as a collective to address them.

I like the KIRA Awards program but the few times I have attended, I was amazed at all the back slapping going on. Here we were in the early 2000s, the Bernard Lord government was all but ignoring the sector (NB had the worst growth rate in IT jobs during Lord’s tenure) and the best the speakers could do that night (one that I remember vividly) is wax long and poetic about how wonderful the IT industry was in New Brunswick and how supportive the government was.

Now, KIRA is not an industry association per se but if an ICT industry is to be successful, it will have to speak truth to power and not be worried that the government will vindictively cut some obscure funding program.

A good ICT industry association will challenge and chastise government. Will publish statistics showing the harsh realities. Will inform the public on the truth not gloss things over with silly flattering of the government of the day.

A tough, action-oriented, annual golf tournament shunning ICT industry association that works hard and diligently on issues of staffing, access to capital, export orientation, diversification, etc. will, I believe, eventually get wide buy-in.

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I know I promised to stay off unrelated topics but after hearing a plethora of callers to Rex Murphy’s Cross Country Check Up talk about their ‘disgust’ and one saying this was the ‘end of Canada’, I still feel compelled, somewhat, to throw, for what it’s worth, my position on the thing into the public domain.

As I understand it based on some readings and talks with staunch Federalists in Quebec, there is a desire among a good portion of Quebeckers to ensure that the province’s distinctive language, culture and heritage do not get steamrolled over in a Canadian context that is vastly English-language based. As of the last Census, 97% of Canadians (or a similar #) claim to speak English including something like 80% of Francophones in Quebec.

They look at Louisiana and want to ensure that Quebec over generations does not become that. They also look at Quebec in the 1950s and reflect that in many ways the province was moving in that direction.

So, since the 1960s dozens of things have been done in Quebec by the provincial and/or Federal levels of government that would be completely untolerated elsewhere. In addition, things have been done across Canada that would have never been tolerated in the USA, as one example. Consider the sign law, consider the QPP, consider the forcing of federal government employees in Alberta to speak French. Consider the billions of dollars in language translation costs each year across the country. A friend of mine in the Canadian Navy tells me that the Belgians don’t even translate technical manuals from English into French - and we do at $1,000/page (at least that’s the cost he grumbles about).

So, in practice, if not in theory, all Canadians have been trying to accommodate the Quebec ‘nation’ and its goal of retaining its unique French language and culture for decades through their governments, actions and tax dollars.

So, to now give a forum for the confusion (as Rex does) that is is somehow about giving Quebec a status and not Nova Scotia or Quebec and not the Acadians or Quebec and not the Aboriginals - I think makes no sense whatsoever.

This is about naming something that we have been practicing for decades. It’s that simple.

Other provinces have their own issues. New Brunswick isn’t interested (as far as I know) in defensing some form of unique culture and language. Maybe someday it will but as for now it’s not.

However, New Brunswick risks dissolution as a province entirely in a generation (merged into some larger regional entity) if it doesn’t get its economic act together. I would like to see an all party resolution in the House of Commons that New Brunswick has the right to exist as a province and that Canada as its country should work on this goal. Nova Scotia, PEI, and NL should have the same issue.

We are trying to protect the unique cultural and linguistic attributes of a ‘nation’ called Quebec but doing buttkiss to protect the population and economic viability of a whole region called Atl. Canada. Here’s the thing. Without a population, you can’t have a unique culture and language to protect.

Aboriginal Canadians have a legitimate concern as to their own viability in subsequent generations and I think this should be addressed.

The Acadians (which, by the way, have the longevity of the Quebequois and better food and musical talents) have their own desire to thrive within the structure of Canada and that should be addressed.

So, let’s not cheapen this discussion to trite comments about “Quebec getting more than Alberta” or “Quebec getting more powers than Nova Scotia”.

On most measurements that matter, Alberta is considerably more powerful that Quebec. It’s people are richer. It’s economy is far stronger. It’s schools and healthcare is better funded.

Consider this. If Canada was setup based on the new Iraqi model of revenue distribution, New Brunswick would get essentially the same oil revenues as Alberta (adjusted for size). Oil, at least in that Constitution, is a national resource and profits are distributed as such.

Of course, if we set that system up in Canada, we would see our own variation of ’sectarian’ violence, I would suggest.

In the end, and it’s where I’ll end, this ‘nation’ thing is from Harper, Iggy, Duceppe, Layton, etc. a purely political construct designed to help secure votes.

To some Quebeckers its about an affirmation that the rest of Canada supports Quebec’s efforts retain its distinctiveness within and as an important part of Canada.

But it seems commentators such as Rex Murphy want to debase this issue with this crap about equality, rights, powers, etc.

We can disagree about the “Quebec’s efforts retain its distinctiveness” and the costs born by the rest of us in that pursuit. Fine. That’s actually a worthwhile debate. Can two or more distinct ‘nation’s exist in a single country? How about Yugoslavia? How about Iraq? Etc. Etc. Etc.

Maybe the US melting pot is the right model. Maybe the dozens of initiatives going on right now in the states to ban Spanish the public square and declare English as the ‘official’ language of the US is the right model.

Now that’s an actual debate. One with scholars on both sides. One with heady discussions going on all over the world.

And it rarely comes down to petty chatter about ‘he’s getting more than me’. Woe is me.

Now, I’ll go back to a topic I have more expertise in. Promise.

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I know the Federal Tories look at the world through a national lense. I know that all of the ‘have not’ Atlantic provinces only amount to 7.5% of the total Canadian population - just an annoyance really - especially from a votes perspective. But the problems facing New Brunswick, Nova Scotia, PEI and Newfoundland are not going away. They will only get worse without a serious bump in economic growth. And I think that inevitably resentment will only grow.

It is clear that the Federal Tories are not focused on the ‘national’ view when they talk about cutting debt and lowering taxes. That is a perfect message for Alberta. Maybe for Ontario as well (although they would like a few more bucks for the provincial level of government). BC aussi.

But in New Brunswick, it rings cold. NBers already pay the second lowest amount of personal tax - because we earn the second lowest average earnings. Low income, low taxes paid. We want to pay more taxes - if it means that our collective income is going up.

What NB needs is a 10-20 year plan for economic renewal and cutting debt and taxes does almost diddly squat for that.

Finance Minister Jim Flaherty outlined a program to wipe out the government’s net debt within 15 years and use the interest savings to finance tax cuts. He said he would cut total federal debt to 25 per cent of GDP by 2021.

Even Flaherty’s promise on net debt may not be deliverable. The federal finance minister has no say in how provinces handle their purses.

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In my opinion, some politicians like to try and spin information to suit their needs and others just plain live in fantasy land. Jeannot Volpé, with all due respect, is the latter.

He writes a long windy op-ed in the T&T today called Premier Graham must build on Lord’s legacy in which he repeats all the tired clap trap that they used when in power and they used to get booted out of power.

Consider a few excerpts:

Volpé: Unfortunately, years of mismanagement prior to the Lord government has misled taxpayers as to the real cost of electricity in our province.

Orimulsion was a Liberal scandal, eh? At least Belledune actually produced power (that was considered to be McKenna’s NB Power fiasco). Orimulsion will cost the province several billion dollars Mr. Volpé. Then there’s the NB Power Lepreau refit (which I support by the way). Lord said many times that power rates would go up significantly if that plant was refurbished without federal support. No federal support, Lord went ahead anyway.

Volpé: For our province to be self-sufficient however, New Brunswick will have to continue to build on the foundation laid by Premier Lord. He laid the framework for what every province that seeks self-sufficiency needs, an environment that is favourable to business and job creation.

Wow. And again I say wow. New Brunswick dependance on Equalization (the opposite of self-sufficiency) increased more than any other province under Lord by a wide margin! And Lord created an environment favourable to business and job creation! How come dozens of large corporations have set up in Nova Scotia and almost none in New Brunswick (except the virtual call centre)? This is one of the greatest travesties to the truth ever penned in New Brunswick (how’s that for hyperbole?).

Volpé: It takes more than a little dance with Frank McKenna on Bay Street to convince businesses to come and invest in New Brunswick.

At least he’s dancing. Lord showed more disinterest towards economic development than any Premier in decades.

Volpé: Bernard Lord saw this potential and made record advancements to make New Brunswick a business hub.

By who’s measurement? One of the lowest employment growth rates, underperforming GDP growth 5 of 7 years in office, net out-migration every year he was in office, etc.

There was an article last week that said Volpé was the leading contender to replace Bernard Lord as leader of the provincial Tories. In my opinion, this op-ed shows just how unqualified he is for that position. He is locked into some group-think-Al-Hogan-Bernard-Lord-Don’t-Tell-Me-Any-Bad-News mindset.

After losing the election, Volpé should have become reflective. He should be coming forward with a message of what he would do different - not just a blind subservience to a system that patently failed over the past seven years.

The only thing that Volpé is correct about is this. New Brunswick’s debt to GDP ratio did decline during the Tory rule. That is true. But at what cost? I, for one, would have supported additional expenditures if they had been targeted towards real investments in economic development.

The facts are plain and undisputable:

The population is formally in decline and has been since the late 1990s. No other Premier in history saw a population decline on his watch.

There has been net out-migration for 14 straight years (yes well before Lord).

Employment growth in New Brunswick from 1999 to 2006 was either second or third worst in Canada depending on what month to month you look at.

Our neighbours in PEI and Nova Scotia have absolutely kicked our butts on the economic development file over the seven years Lord was in office - this is a fact not an opinion.

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Data is going to trickle in over the next months and years that will help us better assess the impact of the Lord government over the past seven years. As you know, it is increasingly likely that we will show another Census to Census population decline when the #s start being published early next.

Here’s another interesting and rather troubling statistic.

In 2005, 23% of tax filers in New Brunswick reported investment income - the second lowest percentage among the ten provinces in Canada. Investment income per capita in Nova Scotia in 2005 was almost $900 while it was less than $500 in New Brunswick. Albertans reported $1,571/per person in investment income.

From 1999 to 2005, per capita investment income reported by tax payers in New Brunswick increased by 28% - the lowest increase among the ten provinces in Canada, by far. So we were second lowest in Canada for per capita investment income in 1999 and in 2005 we are also second last but by an even further margin.

Why does this matter? If New Brunswickers aren’t saving at least to the level of other Maritime provinces that will ultimately put an even greater strain on the social infrastructure in the province - relative to other provinces.

Increase in Per Capita Investment Income
By Province 1999 to 2005

Alberta - 88%
Saskatchewan -73%
Quebec 62%
British Columbia 60%
Nova Scotia 59%
Canada 56%
Prince Edward Island 48%
Ontario 42%
Newfoundland 38%
Manitoba 35%
New Brunswick 28%

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