It's The Economy, Stupid

There is no question that 2007 was a strong year for employment growth in New Brunswick. I tracked this growth on this blog. However, I pointed out that you need to look at these things more longer term to show trends. Politicians love to talk about how strong employment growth is a result of their policies. Every month, we get the same spiel.

The problem is that the day is slowly coming when the Minister will not be able to leverage 2007 numbers and will have to show the real employment growth figures for New Brunswick in 2008 (or not). The truth is that New Brunswick has not grown its employment in 10 months while Canada as a whole added almost 200,000 new jobs. Only Newfoundland performed worse on the jobs front.

I’d like the minister – and I am still serious about this – to actual render a comment about the 2008 to date figures instead of reverting back to leverage 2007. I think he would have a lot of credibility if he came out with a comment or two on 2008 data.

Employment Growth/Decline (Dec. 2007-Sept. 2008)

Source: Statistics Canada.

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I always liked Preston Manning. He was like a contempletive version of Ross Perot. In this op/ed piece in the TJ he calls for more think tanks or at least better funding for the current ones. He says:

In the United States, there are scores of think tanks, covering the entire political spectrum, that constantly generate compelling ideas, policies and communications pieces for their politicians in a timely and effective manner. In Canada, our think tanks are much fewer in number, chronically underfunded and seriously constrained by tax laws.

I think that is dead on. I have been calling for such a think tank in New Brunswick (although my version has a distinctly economic development edge). Up till know, policy has been made at the ‘Cool Camel’ on the back of a napkin (anyone familiar with the back story on the rise of Bernie Lord will remember the now defunct Cool Camel). NB politicians love to serve up the standard fare but if you look closely you will see that there have only been subtle gradiations in policy, legislation and even how the government raises and spends money in the past 40 years.

There have been very few game changer moves out of any NB government – at least in my generation. We are dying the death of a thousand little policy cuts.

Manning is correct. If New Brunswick had a thoughtful – I would say non-partisan but even that is negotiable – entity (ies) that were churning out NB specific ideas for the politicians, government and community leaders to mull over and look to incorporate into public policy. Some will say this is done inside government. They will point to the scores of ‘policy analysts’ in government. But I don’t think can really be done inside government. The Council on Foreign Relations is not inside government. The Brookings Institution is not inside government.

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What I can’t understand is why all these folks complain about Equalization and other benefits to being the Maritimes and demanding their fair share. Here is a comical version.

What are people like this guy saying? They want B.C. to become the Maritimes?

I’m nut much for fancy book learnin’ but it seems to me that all these folks clamouring for better EI (Daulton) a fair Equalization program (Daulton et. al), population-based representation in the Senate (all the West), more MPs, etc. don’t make any sense.

What good has it done the Maritimes to have nine times as many Senators as British Columbia? This guy’s panties are in a knot about it (can I say that in family friendly blog?) but it doesn’t seem to me that more Senators, more MPs per capita, more Equalization and more lucrative EI has been that much of a boon for the Maritimes. He even argues that there are more federal government workers in the Maritimes than in BC (per capita) – and he is correct.

But in the spirit of fair play, I would agree to a switch. BC can have the Senators, the Equalization, the EI, more MPs per capita, even the federal civil servants and we’ll take the massively higher average incomes, the significant foreign investment from Asia in the 1980s/1990s. The film and animation industry that has boomed in B.C. The hundreds of thousands of middle and upper class Asian immigrants that settled in B.C. and they can have more Senators and more Equalization.

Anyone in the Maritimes disagree with that?

Sometimes these arguments don’t even make sense to a poor dumb Maritimer like myself. Do British Columbians want to become a net exporter of people like New Brunswick? Do British Columbians want to have 30% of the private sector workforce seasonally employed? Do British Columbians want to drive through the poshest neighbourhoods in Vancouver only to find out that they are populated with primarily public sector workers? I’m not quite sure why they are so envious of us.

Go ahead and take it. Please.

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I have been reading about an organization called ProChile which is mandated to help small and medium-size enterprises in their trade expansion efforts by leveraging the opportunities afforded by recent trade agreements, fostering public-private partnerships, and helping position Chile in the international marketplace. The organization has around 240 employees of which 140 are based in Chile’s foreign offices.

I know we have chatted about this before but it is well worth mentioning again that New Brunswick (to my knowledge) has no economic development officers based in foreign markets and I don’t even think ACOA does (outside of some short term placements in Boston and maybe other embassies).

Canada has dozens – probably a few hundred commercial officers abroad but I have heard from multiple sources that they don’t do much to foster trade & investment with New Brunswick. When you think about it New Brunswick represents less than 3% of the Canadian population so it’s not really on the feds radar for trade and investment.

So why not take 30-40 of the 150+ economic developers based in Fredericton and put them in the markets where the actual ‘trade’ and ‘investment’ is?

I don’t know why, quite frankly. I guess there is some worry about cost, about remote management, etc. but in the end the biz is there it ain’t he.

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Shawn Graham outlines a new partnership he wants with the Feds and talks about investing in children and workforce development and moving federal jobs to the province.

Stephen Harper announces $200-million more into the Automotive Innovation Fund for the Ontario-centred auto industry and $200-million into the Quebec-centered Strategic Aerospace and Defence Initiative.

This is the nub of it folks. We (New Brunswick) need the funds Harper is designating to win votes in Ontario and Quebec. If the feds give NB general money – it will go to health care or putting new pavement on Route 126. We need a formal partners like the Automotive Innovation Fund that ties both the province and the feds into a five to ten year economic development partnership that will strategically invest in economic development for New Brunswick.

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Here is the text of Premier Graham’s open letter to all federal party leaders.

A couple of points:

He would be wise to use the term ‘province’ over and over again. When Iggy came to the Maritimes during his run for the Lib leadership he equated what was going on in New Brunswick as no different than Northern Ontario, the Gaspe, etc. He said we need to have federal support for supporting these underperforming areas. Regardless of what you think of Iggy (and I kind of like the idea of a philosopher-king), he is dead wrong on this point. Northern Ontario is a region of Ontario and fully under the perview of Ontario. New Brunswick is a province within a confederation of provinces inside the country of Canada. It has distinct autonomy in multiple jurisdiction areas and in many ways has more authority than a State does in the U.S. context (Do we have a federal Department of Education? Do we have a federal Medicare program?).

This is an important point. Northern Ontario is an Ontario challenge and should be addressed via a partnership with the Ontarion government. The Gaspe in Quebec the same thing. There is no equating a province with a region within a province.

The federal government should work with New Brunswick – even though it is politically small it is still a province just like Ontario or Alberta or Quebec – on a plan for economic development.

The second point here is that Graham’s open letter doesn’t talk at all directly about helping attract business investment to the province. It talks about R&D (good), workforce (moderate), moving federal jobs here (fat chance) and natural gas for nothern NB (I like the idea).

The federal government has massive resources to promote international business investment into Canada. They literally have hundreds of officers around the world working on trade and investment with Canada. They have Industry Canada, Invest in Canada, foreign embassies and consulates. Why wouldn’t the Premier talk about a partnership to bring more business investment here? Without that all his talk of workforce development, investing in children and building infrastructure is meaningless.

There are chickens, folks and there are eggs. I am not disputing that you need workforce development, ‘investing in children’ and infrastructure to be an environment where business can foster. I am saying they are two sides of the same coin. Just focusing on each discreetly won’t work.

If you focus on infrastructure and workforce only – natural gas to the north, more skilled workers – and not on attracting and growing industry – you will just continue the role of labour market incubator for Ontario and Alberta.

If you focus only on selling what we have – you will get very little because our value proposition is quite weak these days.

So we need both. And the Premier should have acknowledged the federal role in both.

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Read this. This guy thinks Apple is looking at a multi-billion manufacturing facility in the U.S.

An Apple factory (or two), in the right place, costing several billions would be a worthy endeavor for Apple and its cash. It would achieve the grandest goals for Apple’s technical future, make a contribution to the planet and its people’s well being and help insure Apple’s financial and political security.

Now, of course, every economic developer from Fairbanks to Key West will be on the telephone trying to convince someone, anyone (even the guy at the 1-800 helpline) that their jurisdiction is the right one for this facility.

Even so, NB should take a crack that this – why not? Craft a business case that pumps water from the Bay of Fundy for cooling and wind/tidal for heating. Throw in a pile of free land and work with Maine to build a 21st century rail system right down into the heart of the Boston-NYC corridor. See if the refinery can be used for plastics. Make all NB schools Mac schools. Whatever. Build the case, find someone in the senior management that has fished on the Miramichi or landed at the airport during 9/11. Invite him/her up. Bring in Stephen ahem Harper. Bring in the posse. Convince Apple to put one of these beasts in New Brunswick.

Crazier things have happened.

But not often.

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Hey look! A bunch of students protesting the lack of serious economic development in New Brunswick and the lack of economic opportunity for them in their home province! Finally.

Just kidding.

I guess they are protesting cuts to the cultural spending. I guess that is a whole lot more important than the continued out-migration of our youth to the rest of Canada.

One of the little ironies here – and there are so many – is that the vast – vast majority of this cultural spending takes place in Ontario and Quebec. There are a few crumbs thrown down here but government-level spending on culture in New Brunswick is the second lowest in Canada. The feds spend double per capita on culture in Quebec compared to New Brunswick and 58% more in Ontario.

I am sure that Daulton McGuinty appreciates those poor students in front of Harrison Trimble High School in Moncton protesting against those culture funding cuts that will mostly be felt in Ontario but don’t expect it to change his attempts to deeply cut the equalization program.

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The Miramichi Leader is reporting that FatKat has helped attract another small animation firm to the Miramichi. I still think there is potential to have a nice little animation cluster in the ‘Chi. A number of graduates of the animation program at the NBCC up there have gone on to do some neat stuff. Maybe George Donovan, a graduate, could be wooed back there with an expansion some day? I see that a couple of his current guys have worked on VeggieTail which are very popular with my kids.

I think the point is to cast a broad vision here. Fowler might worry that bringing in more firms might inflate wages or lead to raiding of his staff (I don’t know this, I never met him) but I think the onus is on the NBCC and maybe even UNB to figure out a path that would lead to a steady stream of talented animators and programmers to feed a serious development strategy.

How about this as a back of the napkin strategic plan?

Goal: 700 animators in the ‘Chi by 2015 with an average annual salary of $70k+.
Attract at least 2-3 medium sized (~100 people or so) animation studios from outside.
Foster the growth of the current and new animation studios.
Develop a competitive tax incentive regime (with BC and Nova Scotia forget about trying to compete with Quebec).
Set up a centre of excellence in animation at the NBCC Miramichi and have some interesting research projects.
Look at ways to leverage and support the sector in other segments of government and the local economy.
Try and leverage our bilingual attributes in the process.
Attract a couple of large scale animation conferences to New Brunswick every year.

I am sure that some folks could poke holes in my little strategy here but at least agree with me that it is a better long term approach than flying folks out to Fort McMurray for weeks on end. That may inject money into the local economy but the medium and longer term implications of that long distance work migration will not be positive.

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I get this announcement in my email each year and I like to post it here. Just for fun and to force NBT back into the Pepto-Bismol for a day or so. I almost think it’s a joke of some kind – 3,200 different government subsidy programs? Interesting to note that there are so many in Quebec that the publisher feels compelled to charge 20 bucks more.

Here it is:

The new Subsidy Directory 2008 is now available, newly revised it is the most complete and affordable reference for anyone looking for financing. It is the perfect tool for new and existing businesses, individuals, foundations and associations.

This Publication contains more than 3200 direct and indirectfinancial subsidies, grants and loans offered by government departments andagencies, foundations, associations and organizations. In this edition allprograms are well described.

Canadian Subsidy Directory (All Canada, federal + provincial + foundations)
CD-Rom (Pdf file)…………………………$ 69.95
Printed (430 pages)……………………..$149.95
Also available for each province on CD-Rom only………..$ 49.95

Quebec ………………………..$ 69.95

To obtain a copy please call toll free 1-866-322-3376

Canadian Subsidy Directory 2008
14 Des Seigneurs
Saint-Sauveur
Qc
Canada
J0R 1R0

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