You know the old economics term: opportunity cost? It’s a helpful tool when looking at economic development. Wikipedia’s definition is not quite perfect but it works:
Opportunity cost is the theoretical cost of passing up the next best choice in making a decision in a perfect world.
Basically, in economic development terms, opportunity cost means being rigorous and very thoughtfull with how you are spending taxpayer dollars. For example, one might say that $4 million to attract Van Halen for a concert on PEI is a good expense. Some creative consultant armed with a set of input-output tables might even show a $4.1 million payback on that government investment (economic effect on the local economy).
However, even if you buy the $4.1 million argument (and I say beware of that), you still need to do an opportunity cost assessment and compare that $4 million investment in Eddie Van Halen’s rehab to spending $4 million on training 200 people on the skills to work in the animation industry or $4 million on expanding Slemon park or $4 million to set up an investment/trade office in India for the next 6-8 years.
Opportunity cost.
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Our friend Alec Bruce as a nice puff piece in Area Development magazine this month. His writing there still has the wit but not the biting satire of the stuff he puts in the local paper. Maybe this is a good example of tailoring the message to the audience. If I was writing in Area Development magazine about Atlantic Canada, I would also keep the tone positive but if I am writing to an internal audience that needs to change things, I would be more challenging.
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I have an ongoing theme on this blog about the ideology of Progressive Conservatives in New Brunswick. As you know, I lean small c conservative in my politics and my views on the interaction between government and the people. But, mostly based on my experience, I tend to give ideology a wide berth on many issues because of the insanity of hard and fast positions on a lot of it.
But I never - in 20 years - could figure out what it meant to be a PC in New Brnswick. Never. Richard Hatfield was anything but a Tory in the classic sense. Bernard Lord said he was a fiscal conservative and then rung up government spending at over twice the rate of economic growth in the province during his time in office.
Now I have been reading Jeannot Volpe’s response to the proposed tax reform in New Brunswick and am amazed at his hard left stance - talking about how it will favour big corporations and hurt the little guy. Slamming the notion of a flat tax which is universally considered a ‘conservative’ idea.
To listen to Volpe, a conservative is about “lookin’ out for the little guy” and protecting them from the evil corporation.
But isn’t that ideological ground already a crowded space in Canada?
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Here is the podcast for this week. I look at immigration, airports, and the need to give a hard look at how major, systemic changes to government are accomplished in the province. Have a good week!
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In like a lion, out like a lamb. Remember the outcry when the first round of the post secondary reform was rolled out? Now, the report is released and the 7-8 stories I have read on this have been about the most benign you could imagine. No significant change but more dough. Isn’t that what the universities wanted to begin with?
It can be tough to be a politician. If you make bold changes (the Premier said the first model would be the envy of North America) you get nuclear blowback. If you make incremental, tepid changes you just slide your way through.
I don’t thing there is an easy answer.
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Just got back from that information session on the proposed changes to the French Immersion system. I have fairly strong feelings on this but I know my judgement is clouded by my personal situation (three kids in the system).
But I will say this. I think we need to rethink how very large scale public policy decisions are made in this province. This decision on French Immersion represents a huge change with wide ranging impacts (for example, apparently already some 50 French Immersion teachers have left Region 2 to go to Region 1). And now I hear that some well placed Tories are saying that if the system is changed, they will run on a platform to change it back in 2010.
Our kids shouldn’t be political ping pong balls. Major decisions like this should require a 2/3 majority in the Legislature or some form of public plebiscite. It shouldn’t be easy to make large scale public policy decisions that will have far ranging implications.
I’m not even commenting directly on this issue. I am saying that there must be decisions that must rise above the fray and once they are made it would take a serious effort to unmake them. Throwing the whole english language education system in turmoil only to have it flipped back 18 months later is crazy.
There must be a better way.
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Second time over here in the past few weeks. Good town. Fantastic people. Drizzly and 9 degrees this morning.
I see that Stephen Lund from NSBI made the list of Atlantic Canada’s Top 50 CEOs this year. It’s a well deserved accolade. The guy is good at what he does. I think the last economic developer to win that was Moncton’s Ron Gaudet - athough come to think of it Steve Demsey from the GHP may have won it as well.
There are some good names on that list but you have to wonder about David Hay at NB Power. The few people that I know that interact with Hay say he is a top shelf guy but NB Power hasn’t been an stellar economic success in recent years.
It’s a bit strange that out of 50 companies, there is only one technology CEO on the list (Bulletproof) unless you count Aliant. It seems to me that if the future is technology based business, you’d like to see more of these guys making this list.
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That title is a little play on John Candy’s words in Planes, Trains and Automobiles.
Just to pick up on the immigration theme that I am spending more time on lately.
It is my sense that there is a small group of people out there that are ideal targets for immigration to New Brunswick and Atlantic Canada. There are folks that want to be in a less populated area, feel really safe walking down the street at night, drive 5 minutes to work, buy a house for a reasonable cost, live beside relatively friendly people. In my consultations with immigrations so far, the winter wasn’t even that much of a concern.
But they need the economic opportunity which falls into several areas: 1. Good job (job that represents at least an equivalent to their old country); 2. Spousal opportunities; 3. Career path options (if the current job doesn’t work out) and 4. A relatively good cost of living (compared to thier old country).
If you match the economic opportunity with the profile of the person who would like to live here you will get long term, successful immigrants that add fully to the fabric of society.
If one or the other of those are mis-aligned (lifestyle expectations or economic opportunity) you will get out-migration and/or bitter immigrants that are anything but a testimonial for living here.
For example, if an immigrant came to Moncton for a job without assessing the lifestyle and would have much preferred a large urban centre, they will not be happy. Conversely, if they love Moncton but their job is below expectation or their spouse can’t find work, they will not be happy.
There are no easy answers to this but ultimately the closer we can align these two issues the better chance of success.
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If you can read this, it’s my latest column designed to annoy just about everyone. I am calling for the consolidation of NB’s air services into one single airport for the province. Ouch. But don’t judge me until you read the figures.
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I am sitting in a session with 12 immigrants (blogging in real time). They love it here but the key is the job. Spouses can’t find jobs. Others are underemployed. But they all say that if there were good career jobs here (and companies would hire them), they would stay and love it.
They like just about everything about Atlantic Canada - except the lack of job opportunities.
Don’t put the cart in front of the horse on immigration. If you build it (i.e good companies with good jobs) and they will come. Don’t sell smoke and mirrors. And if you need workers in lower wage service industries, don’t attract skilled people to work low paying jobs. Attract people for whom those jobs would be a step up.
There’s Israelis, a Hungarian, Brits, an Indian, a Peruvian and a couple of Americans.
Fun stuff.
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