It's The Economy, Stupid

This makes 6-7 major announcements in the past couple of months:

Ceridian Canada to Establish Centre of Excellence on Prince Edward Island
Ceridian Canada, a leading human resources services company, will
establish a centre of excellence on Prince Edward Island to meet its growing
customer requirements for talent acquisition, payroll and other human
resources services. The new centre will be established in Charlottetown in May
2007. Ceridian will hire 40 employees during its first year and ramp up to 100
people within its first three years of operation.

Kodak expands health IT operations in Summerside
Kodak Canada is expanding its health-care information technology operations in Summerside and plans to create about 20 software engineering positions at the facility. The increase follows increased customer demand for software products from Kodak’s health group, the company said in a release. Kodak’s operations in Summerside operations are focused on the development and support of its radiology information system, which enable hospital radiology departments to maintain electronic records on patient exams, scheduling and other information.

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Finally, some common sense coming out of Alberta on the Atlantic Canada ‘problem’.

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Monctonlandlord asked for my ideas regarding municipalities and their efforts around economic development. This is something that would require some serious thinking but my initial thoughts are below (with special effects for your reading pleasure).

Picture the scene:

….Knuckles cracking, smoke coming out of ears….

Municipal economic development recommendations (widely applicable but need that grain of salt for flavouring):

1. Support your regional economic development agency (that’s how it’s done in New Brunswick and there’s no reason to buck it – if you don’t like what they are doing, have your say).

2. Spend at least 5% of your annual operating budget directly on economic development. Be careful of not duplicating efforts of either your Enterprise or the province.

3. Be Investor Ready. Have sites identified of all shapes and sizes. Have megasites available/identified even if they are outside your municipal limits. If the province/your Enterprise brings business to town – you must be ready. Have a SWAT team of professionals ready to serve the potential investor (Involve regional planning here). Have a wide variety of statistical/demographic information. Focus on the livability of your town/city as this is increasingly where the differentiation lies.

4. Lobby for much more emphasis at the province on economic development. Use your voice on this thing.

5. Make your city/town livable. Do whatever you can to make it a dynamic, vibrant can-do place. Identify and address gaps and have a plan – short/long to address them.

6. Carve out a niche or two. Saint John should be known for “xx”, Moncton for “yy” and Tracadie for “zz”. There’s a lot of competition out there. You need to stand out in a crowd.

7. Stop saying “that’s not my responsibility” or “that’s not in our mandate”. If it’s an issue of importance to your community – it should be in your mandate. Environment, community health, transportation, infrastructure, attracting industry, attracting people, if these aren’t in your ‘mandate’ – they should be.

8. Elect a dynamic Mayor. He/she doesn’t have to be a metrosexual dynamo. But he/she should be passionate about the city/town and have a clear vision of where he/she wants to take it during their mandate. It’s a bit weird, I know, but towns/cities seem to take on the character and personality of the mayor over time. A dynamic and passionate mayor, over time, will translate into a dynamic and passionate city. Think this one through. Think of your long standing mayors and ask yourself if they were aligned with the character of the city/town.

9. Build a vibrant downtown. I don’t care how big or small your community is, “as goes the downtown, so goes the town”. All communities need a heart. A centre. A place for coming together. And that should be your downtown.

10. Partner. With local municipalities. There is little need for 239 (or whatever) cities, towns, villages and local service districts in New Brunswick. We have a municipal unit per 3,000 people in New Brunswick. It’s ridiculous. Push for amalgamation where appropriate. Do we really need a ‘Moncton Parish’ with 8,000 people living in it and no municipal governance? However, in the absence of real leadership on this issue, partner with any and all municipalities where it makes sense. You have more shared interests than differences. Get over petty local politics and do the right thing for citizens.

Any more than that, you will have pay

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I was given a copy of the City of Moncton’s Vision 2010 Strategic Plan last week and as I flipped through it I started to chuckle.

It wasn’t that long ago that municipalities did ‘curb and gutter’ kinds of things. You know, garbage removal, snow plowing, water/sewage. City stuff.

Not anymore.

The strategic plan is about ‘active’ living, arts & culture, green spaces, the environment, health, youth engagement, beautification, public art, bilingualism, urban forests – and yes, even economic development.

Now, don’t get me wrong. All the old time curb and gutter stuff is there to. Cities still have to do city stuff. It’s just that circa 2006 leading municipalities know what they need to do to be ‘liveable’ and attract people. Curb and gutter is table stakes. All the jazz is what differentiates.

However, in true New Brunswick style, the municipalities are still labouring under legislation that hasn’t been changed in over 60 years. Maybe in another 60, someone up in Freddy Beach might figure this out.

I had a chance to breeze through the new ‘City of Toronto’ legislation a few days ago. Wow. Talk about your city-state. For me, this makes good sense. Of course, in New Brunswick, much more ‘stuff’ needs to be done at the provincial level. After all, the entire province of New Brunswick population could fit in Etobicoke and environs.

But there are still things that need to get done. If Moncton wants to syphon of methane gas from the dump for a green power source, it should have the authority. If it wants to charge a hospitality fee (like half the cities in this country) it should have the authority. If it wants to creatively support economic development, it should have the authority.

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Interesting article yesterday about the growth of data centers.

Corporate demand for data centers is likely to remain strong for years to come, and cost issues will lead many companies to build new facilities in smaller markets in the center of the U.S., according to John Boyd, president of The Boyd Company of Princeton, N.J.

Those cost issues will spur data center development outside of the major Internet markets and “NFL cities” that have thus far been home to the lion’s share of major data center projects. In recent months Boyd has released two studies on the cost of operating financial and healthcare data centers in U.S. markets.


What would it take to make New Brunswick the hub for data centres in Canada and for the northeast?

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Okay, all you faithful bloggers. Time to get you engaged in the process of economic development research.

Here’s your research question. How did New Brunswick’s job growth compare to other Atlantic Canadian provinces and the national average from 2000 to 2005?

Don’t worry. No need to plow through reams of data. Just click here, the work has been done for you.

Other research questions:

How did the growth of public administration jobs compare?

Check out Table 7c and Table 8a and Table 8c if you get a chance.

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I came across these numbers in a recent study by the Centre for the Study of Living Standards in Ottawa. It’s an interesting way to present the population challenge.

Essentially, back in the 1960s when there were all those attempts at regional development and specifically attempts to make Atl. Canada attractive for foreign investment, this region’s population growth underperformed but not extremely the national average.

Even in the 1980s, we still were registering 0.5% per year annual populatoin growth. But from 1996 on, population growth turned into decline across the board while population growth Canada wide remained roughly at its historical levels.

So, in a nutshell, when the national government was aggressively promoting this region for foreign investment, we weren’t doing to bad (at least based on one statistic called population growth) and now the Feds are all but out of the game of promoting foreign investment in Atl. Canada – and we are in population decline*.

Note: These #s are the average annual growth rate.

*PS – ACOA does have an Investment group – headed up by a very capably guy – Kevin Bulmer but the bulk of investment attraction work is handled at the provincial level.

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The self-sufficiency commission wants people to provide input according to a column written by Francis McGuire in today’s paper. I had heard they were going to have some form of forum or blog on the site but none yet. However, you can send them an email.

There are seven realities facing New Brunswick according to the commission They are, with my comments, in italics listed below:

1. We must increase our population and our labour force by increasing incomes.
Axiomatic ‘our’, nebulous ‘by’. There’s no evidence that you increase population/labour force by increasing incomes. It certainly makes sense as a theoretical construct but I have yet to hear an expert agree with this. I have read the revitalization stories of Ireland and others and income appreciation was an effect – not a cause – of population/labour force increase. We must increase our population by growing targeted industries and then aligning workforce development strategies (including attracting immigrants and in-migrants).

2. We must be prepared for sweeping changes of unprecedented magnitude.
Heady words. This province has gone through multiple recessions, one great depression and massive cuts of the early 1990s. If we are to see changes of ‘unprecedented magnitude’ we are about to witness heretofore never been seen politics in New Brunswick.

3. We must increase labour productivity by providing people with the right tools for the right jobs.
Touche.

4. We must strengthen the connections between urban and rural New Brunswick through large scale investments in infrastructure.
Ahem. I have said on numerous occasions on these pages that a four lane highway to the Acadian Peninsula will do more for economic development up there than all the EI you can throw at that region.

5. Export growth must drive overall economic growth.
No smoke and mirrors here, please. Be specific. Export growth of high value added manufacturing and services. Another Irving Refinery will double exports (and the LNG plant will massively increase exports) but their impact is limited and local (important, but not far reaching). The last thing we need is another Refinery and then the Premier riding the ‘exports growth’ shtick for the next seven years.

6. We must move quickly and aggressively to expand our existing corporate base.
Yes. We are far too reliant on either micro-businesses or massive conglomerates. We need more export-oriented multinationals, high growth technology firms, selected large scale manufacturing, more R&D, etc.

7. Leaders at all levels of New Brunswick society must step forward.
Easy to say, hard to do. Vested interests prevail. Who has New Brunswick’s economic growth as its sole ‘vested interest’? Only the government. Local entrepreneurs look at the world through their lense. Unions through theirs. Educational institutions through theirs. Associations through theirs. Civic groups through theirs. The media through theirs. Bloggers through theirs.

Leaders in government must step forward first. Elected officials, bureaucrats, heads of crown corporations. Then, bring along the private sector as needed.

I don’t say this lightly. I have had senior bureaucrats say things like ‘why should we attract multinationals? We need to support local businesses’. I heard a senior NB Power executive once say they weren’t in the ‘economic development’ business. A former DM of the health department said in a meeting I was at that the health department wasn’t in the business of ‘economic development’ (apparently the $2B in health spending has no economic impact). I have heard town officials say they ‘don’t want growth’. They like their ‘small town feel’. I have heard regional planning commission staff make highly hostile comments towards economic development. I have chatted with education officials who don’t really care that their community college graduates are leaving the province. In fact, I have heard of NB schools organizing job fairs for firms outside New Brunswick.

You see. The government has little control over the ‘leaders’ outside its walls. But inside government at all levels, efforts should be made to inculcate a growth mindset and growth agenda.

I had a macabre moment a couple of years ago (in an economic development sense). On the same day I heard a long and winding speech from former Premier Lord about how much prosperity he was heaping on New Brunswick, I got a call from a friend in the post-secondary education realm. He told me on that day that education department officials were going around to the universities warning them that demographics were going to lead to deep declines in their student populations and that would be paralleled with government funding retrenchment.

Let me end by being really clear:
NB Dept. of Finance officials need to be about growth – not about managing decline.
NB Dept. of Education officials need to be about growing the student base – not about managing the decline in students.
NB Dept. of Health officials need about about leveraging their massive budgets to support a growth agenda – not about turning the province in to a virtual rest home.
NB Dept. of BNB officials need to be about growth – real growth – not smoke and mirrors. If they don’t have enough resources to get it done then say so but don’t hide behind weird statistics like ‘jobs maintained’. If you are ‘maintaining’ you aren’t growing.
NB Power needs to be an economic development agency. It’s that simple. New York Power company gave a massive power discount to HSBC to put a multi hundred million dollar data centre in the heart of rural New York. NB Power must be an economic development driver.

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At least one of our frequent posters will like this.

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Rural economic development is not dead yet.

HSBC North America Holdings has selected a farm field in the Town of Cambria as the site for its proposed new $139 million Niagara County data center, which will supplement its existing facility in Amherst.

The planned 275,000-square-foot center will be located on the northeast corner of Lockport and Comstock roads, on Cambria’s southern border with Pendleton, according to an application for tax incentives HSBC Technology & Services filed with the Niagara County Industrial Development Agency. HSBC officials confirmed the location on Monday.

The bank is seeking $88.5 million in sales and other tax benefits for the previously announced project, which will ultimately require more than $1.5 billion in technology purchases by HSBC.

According to IDA documents, specific plans for Cambria call for a 200,000-square-foot building and a 75,000-square-foot equipment yard, to be built on 51 acres of a 77-acre farm field. HSBC plans to buy the 51 acres and obtain a right of refusal on the rest, and the project is designed to allow for future expansion to 350,000 square feet.

Cambria is a pretty remote place. It’s about 60 miles from any real urban area.

$88.5 million. We don’t exactly know the structure of the incentive package from the State of New York but suffice it to say it is considerable. We do know the state has already awarded HSBC 11 megawatts of low-cost power per year for the next 15 years, through the New York Power Authority.

It will create almost 200 direct and indirect jobs.

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