I am sitting in a hotel room in Bangor, Maine. I have been driving in my car over the past couple of days listening to the radio and getting a kick out of the difference between our talk radio (the new Rogers news station), Canada’s version of the thinking man’s talk radio (Rex Murphy and Cross Country Checkup) and the American Shock Radio (Bill O’Reilly, et. al). Anyway, after a while I had to turn it off – O’Reilly began to educate his audience about his knowledge of the Soviet political system – as it can get really hard on the head.
But I digress.
What I was thinking about post Bill O’Reilly was a chat I had recently with one of Atlantic Canada’s top economic development thinkers – Fred Morley of the Greater Halifax Partnership. Fred these days is thinking more and more about corporate social responsibility and its potential implications for community economic development.
You see, corporate social responsibility is a new buzzword in the corporate world. Many firms have made it an executive level issue – appointing Vice Presidents in charge of corporate social responsibility. CSR is all about how a company interacts with its environment – be it the physical environment, the work environment (employees) and the communities in which the company’s operate.
Wouldn’t it be interesting if corporations added economic development to its list of CSR endeavours?
Think about it. This is not too far fetched. Consider all the large firms that generate revenue from places like New Brunswick. Banks, large retailers, oil companies, software companies, service firms, media, etc.. Literally the vast majority of Canada’s top 2000 firms generate revenue from the poorest regions in Canada.
But how many of them create economic activity in these poor regions beyond what is necessary to service their local markets?
Don’t these companies have a vested, market interest in a strong and healthy economy across Canada?
Consider the example of the Royal Bank. It has 600 people in Moncton with good jobs, benefits and career advancement opportunities. These jobs could have been located in Toronto or Montreal or Vancouver – but they are in Moncton, New Brunswick.
There was, in fact, a business case reason for RBC to set up in Moncton – but most national firms just automatically set up back office, call centre, information technology, legal, public relations and all other front and back office jobs in the large urban areas -it’s convenient – if not overly cost effective.
But for me economic development considerations should be placed on the table the same as environmental or ethical considerations. These companies have, I think, a responsibility to support a strong, national economy.
Consider Research in Motion. They could have established that 1,200 person facility in a large urban area but they chose Halifax. Sure, the Waterloo IT economy is overheating pushing up wage rates and recruitment costs. Sure, Halifax made good economic sense. But far too often companies don’t consider Atlantic Canada because it’s not close to the mother ship – the head office usually in Toronto.
Thomas d’Aquino of the Canadian Council of Chief Executives (CCCE) gets a lot of flak for standing up (lobbying for) the concerns of Canada’s top corporations. But this could be one way for the CCCE to build a more positive reputation – beyond just looking for tax breaks, less regulation, open borders, etc.
In fact, the CCCE even has a regional development policy – although it says nothing about the responsibility of Canada’s large corporations to support regional development.
I suggest the d’Aquino’s members audit their corporations to see just how much economic activity their firms are generating in Atlantic Canada (again beyond just servicing a local market). Then, how about a policy to strategically invest in the region to support their national and even global markets.
In reality, this is supposed to happen naturally. In traditional laissez-faire economics, when one local economy overheats (costs rise, labour markets tighten, regulation gets burdensome), the market reacts by shifting labour and capital to other more virgin markets. However, that is not the case in Canada. Labour and capital has been primarily pooled in four areas and has stuck there for at least 30 years (according to Statistics Canada). When the labour market in these areas overheats, we just turn on the immigration tap.
Now, I know what you are thinking. We can’t even get the federal government – which should be the easiest – to allocate some of its jobs down here so how can we expect Canada’s top corporations to invest here?
Good question but remember the point of this blog. It’s to spur debate and discussion.