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Population decline

November 17th, 2009

New Brunswick has failed to meet population growth projections set about a decade ago by a regional economic think-tank, and actually recorded a reversal in its population count.  The Atlantic Institute for Market Studies (AIMS) said shrinking population numbers hit all four Atlantic provinces hard over the last 10-years, as detailed in a report released yesterday which followed up on a study first published in 1998. Furthermore, the study said the problem threatens to develop into a crisis because further regional population declines are being predicted for the future.  In 1998, the collective population of all four Atlantic provinces was predicted to increase by about 35,000 people over 10 years. Instead, the new report says the region’s population decreased by 47,000 people in that time. “New Brunswick actually stands out as sore thumb both on the population side and on the labour shortage side,” said Charles Cirtwill, president and CEO of AIMS. “We projected back in 1998 that New Brunswick’s population would have grown by about 25,000.  “It’s actually declined by 7,000.”

It must be nice to work for AIMS. On one day you can complain about the government for trying to do things that restrict out-migration and on the other you can hammer them because of the results of out-migration.  Cake and eat it too.  Where do I sign up?

Anyway, I am now old enough to remember all these old initiatives.  There was not real interest in population growth in 1998.  Come on.  Bernard Lord’s Prosperity Plan never mentioned out-migration or population decline once – not one single whisper.   To be honest I think some policy makers see out-migration as a good way to reduce unemployment.  This has been the view from the Ottawa think tanks for more than a decade but I think some here agree. 

As I have said ad nauseum we don’t have a population crisis – we have an economic crisis.  People in Calgary age at exactly the same pace as in New Brunswick and yet they can’t build elementary schools fast enough.   If the New Brunswick economy was creating enough good jobs each year we would have very little out migration and immigrants would be far more interested in moving here.

But what is the normal policy response to a population crisis?  Try to force young people to stay by offering them tuition rebate bribes.  Churn up the number of immigrants settling here and hope more of them stay.  Beef up the EI system – make it just a little more lucrative – so that people won’t move to Alberta or Saskatchewan.  And, of course, my favourite – announce another round of funding for small business the engine of the economy.

We need to fix our structural economic challenges, folks.  Businesses are not investing here – at least not enough to generate economic economic activity just to keep our people here – let alone grow the population.

The current government prefers grand schemes – broad-based tax cuts, selling NB Power (which I agree with under the right conditions), reforming education – they believe that structural changes are needed.  Fair enough.  We can debate that but, in the end, I believe the best way to generate sustained economic growth for a generation is to focus on a few key industries that have growth potential and shaping public policy to see business investment flow into those sectors.

The structural stuff matters but I really don’t think it will work without the second part.  If you have the best education system in the world – you end up with better exports of people.  We know from the data there is a direct correlation between the level of education and out-migration from New Brunswick.  The more you proceed up the education chain, the more likely you are to leave. 

Tax cuts are fine as a dividend for strong economic growth but as a stimulus of economic growth?  I can’t find any data to support this – particularly for a small province.

My point is that governments have to focus.  It’s not that they focus on one thing to the exclusion of all others but they need to have a focus.  I thought Graham’s was going to be economic renewal.  It was the self-sufficiency agenda. 

Too much political capital expended at the structural level while ignoring a practical economic development agenda many end up being a mistake.

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  1. mikel
    November 17th, 2009 at 10:43 | #1

    About half of that is perfectly reasonably. Here’s some caveats:

    IF you truly have one of the best ‘educational systems in the world’ then you CAN build an industry on that. Here in Waterloo they can’t build housing fast enough to stuff in all the chinese and indian students. The university can’t build buildings fast enough to keep up with all the new programs they are offering-next is a full medical school and law school.

    Key industries are fine for government focus, that doesn’t mean others need to be ignored. Any healthy regional economy is going to have a diverse workforce or its not particularly healthy. Again, selling NB Power seems to be a last grasp at holding onto one ‘key component’ of that ‘focus’ of the past 100 years-is that a GOOD thing?

    Moncton is a fairly good example of that ‘mix’, Halifax is another.

    It’s very true though that the Premiers of NB really don’t seem to know what they are doing. You don’t HAVE to have ‘cultural industries’ as a ‘focus’ (even though they have provided much of the growth in the private sector), but when Nova Scotia announces a very lucrative tax credit system for cultural and entertainment industries, then it can at least be matched. It’s been two years and still waiting on that one, meanwhile, as a former volunteer with NBFilm most of the people in that industry I know go to Nova Scotia to take advantage of those deals.

    But in the end, it comes down to policies. There is only so much a government can do. We don’t know, but its POSSIBLE that the new announcements for cranberry growing, solar building and the recent Caraquet move MAY be results of this tax plan, we simply don’t know. However, again, specific deals can be made for specific employers.

    And again, education NEEDS to be a key, but it isn’t. One of the guys who started RIM was a dropout, but that was really a fluke, he couldn’t have done it alone. A focus on education needs more than a ‘tuition rebate’ to keep people in the province. There has to be a recognition that IF there are no jobs, those people need to be in fields to start new exporting businesses, and need to know how to do it. There is VERY little training in such things, I know you can ‘take’ entrepreneurship at UNB, but I seem to recall most of the profs had never spent a day in the private sector, let alone be entrepreneurs.

    In todays world that means science and technology, and how much of that is getting a focus in the educational system?

  2. richard
    November 17th, 2009 at 11:03 | #2

    “they believe that structural changes are needed”

    Do you think that’s really the case, or is it just that they have no bloody idea how to address the economic dev issue? Then the ‘structural’ stuff becomes a replacement for actually doing anything worthwhile.

    The self-sufficiency stuff got started off with the McGuire report. That, IMHO, was a disaster – shopping list that derailed any attempt to focus. A wise corporate manager would decide on a strategy, then bring in a like-minded consultant who would deliver a solid report that met exactly that strategy. Then the manager has the political cover to proceed. That is exactly what the NS Premier has just done (i.e. the expert panel that told the Premier what he already knew – he must raise taxes and cut spending). Graham was either too naive or to short on smarts to do the same thing. He lost control of the agenda almost immediately.

  3. Samonymous
    November 18th, 2009 at 20:06 | #3

    It must be nice to work for AIMS. On one day you can complain about the government for trying to do things that restrict out-migration and on the other you can hammer them because of the results of out-migration. Cake and eat it too. Where do I sign up?

    I know, I would much rather work for the government (or through a government run agency) and develop (and defend) the strategies which have got us to this point over the years. Wouldn’t that be a proud bullet point on one’s resume outside the region. Hi “I’m Joe” a proud NBer who has worked in the ED field for 25 years. Feel free to come on in and look around my great province, the results will blow your mind!”

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