Blogging from Freddy Beach

I’m in Fredericton today for a couple of meetings. I have a few minutes so I’ll serve up a quick blog with my Starbuck’s coffee.

I spent most of my childhood in Fredericton. More specifically, Lincoln just outside of Freddy.

Something has always struck me as odd in this area. Fredericton, as you know, is the richest community as measured by average income (personal and household)- by far – in New Brunswick. This is due primarily to the presence of the government. Most government cities in Canada have considerably higher average incomes than others – and that is particularly so in New Brunswick.

But what I find odd is this ring of poverty – or more accurately – lower income families – living around Fredericton. Lincoln, my old stomping grounds – is visibly poor – with boarded up buildings, very few new homes, business, etc. If you take Nevers Road, Rusagonis and swing around to Fredericton out towards Tracy, you see more of this. There is also a similar story if you come into Freddy on the old TransCanada.

In my opinion, you don’t see this in Moncton. And in my limited experience in Saint John you don’t see this there either. In both Moncton and SJ maybe it’s more urban poor – I am not sure, quite frankly.

Maybe it goes back to my old bugaboo about so many communities in New Brunswick not having an effective local government (LSDs, etc.). Maybe if all these areas were rolled into a single municipal structure, there would be more interest/focus on them in terms of development.

Or maybe it’s a pure economic reality. Maybe it’s too expensive for a lot of folks to live in the well manicured areas and that this ‘beltway’ has become the best optin for folks with below average incomes.

Who knows?

Just a few comments from the news this morning.

I see that CBC is reporting that Connect North America is blaming the provincial government for it closing its call centre. I have no idea the specifics but I assume that means the province wouldn’t bail them out after they hit the skids – maybe due to the appreciation of the Canadian dollar.

But, for me, that’s an example of exactly what has been wrong in economic development in New Brunswick. The government put piles of cash into firms that are having economic troubles – in order to ensure that they stay in business. Or, as I like to say, propping up bad business models.

I very much dislike this style of economic development. Government investment, if used at all, should be to build an environment that attracts top notch firms with great business models. Bailing out bad companies seems to be a very bad idea.

Our friend David Shipley at the TJ is reporting on the province courting companies to set up here – I think it is tied to the potential for another nuclear power plant.

I applaud these efforts but in the long term, we need to attract firms to set up here not based on the local business they will get from having an office here. Eventually the government spending on new power plants and such will end and so will those companies and their presence here. We need to attract firms that will base a chunk of their North American operations here (like Exxon, like UPS, like Iron Mountain, etc.).

I will say that I am hearing very good things about Jack Keir and his focus on using the energy sector as an economic development driver. That is good to hear.

Moncton has ranked 4th in Canada as a place to do business (Canadian Business magazine). A couple of years ago, Moncton was #1. Then it ‘collapsed’. Now it is back. Saint John was tops, now gone from the top 10. Freddy is on this list.

Quite frankly, this list is becoming silly. Cities can’t go from #1 to #15 in one year as a place to business. The measurements are based on ephemeral factors when it should focus on longer term factors. What business will make a decision about where to locate on one year’s worth of data?

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0 Responses to Blogging from Freddy Beach

  1. Anonymous says:

    DC wrote: Quite frankly, this list is becoming silly. Cities can’t go from #1 to #15 in one year as a place to business.

    I agree. It seems the rankings can only hold water on the day the numbers were taken. For all we know Moncton is number 1 right at this moment and tomorrow could be 22nd.

    They have to give more weight to stable indicators if anyone is to take this seriously.


  2. Anonymous says:

    Its the old story of location, location, location being the top three important criteria for purchasing a house. The ring of poverty is not that odd, it is quite normal all over the world. I agree with your assessment of the LSD thing. It seems that each region in the province is in competition with each other when an overall placement strategy should be in place where inward investment support or incentive is given on a sliding scale based on where in the province the company bases itself and on what and how much EXTRA capital is brought into the economy here.
    We should be focusing on companies who can be a benefit to our energy initiative but on a quid pro quo basis and based on a term of occupation in the province. We should also be trying to attract different companies that have nothing whatsoever to do with energy. Companies that operate in different business fields and markets that are totally outside the usual industries we have here in NB. The world is changing as is industry. We pay lip service to tourism, energy, conservation and environmental issues among others. It is time we embraced anything and everything that has a better than even chance of succeeding. After all a business that makes a profit of $10 per year is a hell of a lot more useful than one who receives $1 million from the government to prop them up. I, however, disagree that we should concentrate on North American business. We need to think globally. Europe, Russia, China, India etc are far more lucrative markets than the USA currently and we need to broaden our world view on this. This is where a dept. like NSBI comes into its own.

  3. mikel says:

    Interesting comments, however, while there is noticeable poverty in Fredericton, it pales besides Saint John. Moncton, sorry to say, has always been known as the prostitution capital of the maritimes (thats from sources, I wouldn’t know).

    However, this is a national, not an international phenomena. As Canada’s policies mirror the states, so does the society, which is made up of a high disparity between rich and poor and I believe that the disparity gives New Brunswick the distinction of having the largest disparity in Canada. When I went to university in Fredericton just over a decade ago, you NEVER saw visible poverty. The north side was always poorer, as were outlining areas. However, Tracy and Fredericton Junction had quite a different culture. Outside of cities you don’t have all the bylaws, and people honestly don’t give a rats ass about how things look.

    People in urban areas have a massive fixation on ‘everything looking neat’. It’s like a Tim Burton movie sometimes, but as a suburbanite I’m not much different (although ‘clutter’ always seems to find a way around the yard and our property looks far different from the grass and two evergreens in front of the windows that seems to be everybody elses yard.)

    There is more visible poverty in Fredericton than there was before, but also more services. At another blog welfare people were talking about how Fredericton is the only city with breakfast served at the soup kitchen. Other cities barely even have functioning soup kitchens.

    But again, thats a mark of the distribution of income, which is also why Ireland has the highest rate of child poverty. As the ‘market’ takes over, wealth flows up. In places with strong government regulation thats not the case, like Scandinavia, and as I’ve said before, under Chavez Venezuela’s poverty level is decreasing to close to Canada’s.

    For the other point, the blog is getting confusing. It’s ‘bad’ to give money to a New Brunswick company but ‘good’ to give it to a foreign multinational? That changes everything into an ideological debate, NOT an economic one.

    New Brunswick has PROVEN what can be accomplished with government subsidies and aid-just look at Irving. As for infrastructure, New Brunswick was already preaching the gospel of no unions and low wages under McKenna, but now that boat has sailed because there are even lower wages and fewer unions to be had elsewhere. So what attracts new companies? Cash. So NB companies should at least get as much of a keg drain on that as the next guy. With a similar deal Pumphouse could probably churn out beer and grow faster than Molsons and they are quite correct to be griping that Molson gets millions while they do the proper capitalist thing. Pumphouse was available for one weekend in ontario until it sold out in two days, and they simply can’t supply enough. So there is no way you can convince me that its ‘fair’ or even economical to bribe Molsons while ignoring local companies.

    As for the final point, thats way off. Mathis Instruments may have folded, but it provided experience and expertise for workers who would never have gotten it elsewhere, and if even one of them went on to do something with it then thats a positive.

  4. David Campbell says:

    Mikel, that’s actually my point. Fredericton is considerably ‘richer’ than Saint John or Moncton. I’m just saying that if you drive around the outskirts of Moncton, you don’t see the ‘poverty’ that you see in that lower Lincoln, Nevers Road, Rusagonis, Freddy Junction, etc. It’s just an observation.

  5. Anonymous says:

    Re Poverty: I would guess that is a common capital city issue. The capital is a magnet for transits, etc. Just released from prison? Guess what, the first bus goes to Fredericton.

    Re List: These lists are fabricated, self-serving vehicles to pat economic developers on the back. The only thing that matters is if a business can be profitable and the business leadership needs to decide that, not some group of magazine editors or economic developers.

    Re business support: Mathis is a good example of an obviously bad business idea that can go far with media hype and scads of government funding. I am all for supporting local business ideas but only if they have solid market opportunities. Discovering an interesting science concept and being a politically-correct poster child should not be enough to attract $10M in investment on its own. This an excellent example where government funding has been counter-productive.

    Sure, hindsight is 20-20 but let’s learn from our mistakes and remember that ACOA is investing our money. When you invest your money, do you place it on solid business leadership or intriguing science experiments? Yes, ACOA should be taking on more risk than a private investor but please, there are better probability opportunities out there. There has to be a solid business case, not simply neat technology.

  6. mikel says:

    Mathis was a poster child for doing everything RIGHT. They had solid business leadership, were smart enough to not simply have the lead researcher doing the marketing.

    Hindsight IS 20/20 and this would be the opposite argument if one thing were true-Mathis was still in business. Which is better, money pumped into a scientific company where workers can at least relay that experience, or government pumping millions into a gypsum wallboard factory in St. John. Resource jobs have one thing in common-you don’t need as much education, which means why would the population bother spending money to get educated?

    An uneducated population has more problems than just no jobs, as NB makes abundantly clear. So its easy to say, AFTER a company closes its doors, that money shouldn’t have been spent there. It’s a harder thing to do it at the beginning of the life cycle, and since that thinking is so prevalent, thats why ACOA does virtually NO investment in business start ups.

    It’s ironic that ‘solid’ business ideas, like Irving, with billions to back them up, government loans, a protected market, can get billions over its history, when by definition THOSE are the dollars that should come from private banks. Yet they feed off taxpayers. If you told me that my tax dollars were going into fifteen scientific research companies and there was NO chance they’d be economically viable I’d still be quite happy.

  7. Anonymous says:

    I’m just saying that if you drive around the outskirts of Moncton, you don’t see the ‘poverty’ that you see in that lower Lincoln, Nevers Road, Rusagonis, Freddy Junction, etc. It’s just an observation.

    I admit I’m not familiar with Nevers Road, Rusagonis etc.

    Heh, take the back roads thru Albert county sometime and let me know what you think about visible poverty in the Moncton area. If you wait a couple of weeks for the leaves to turn color it’s even a pretty drive.

  8. Anonymous says:

    Mikel –

    You must be very happy. Check out the funding that NSEC, CFIA and the Canada Research Chairs have piled into our universities in pursuit of scienctific research that relays into business and jobs. It has been billions. Tens of millions in NB alone.

    Now, go have a chat with the workers at the Molson plant in Moncton, the converted pulp plant in St.Anne, the IBM call center in Saint John, the UPS call center in Moncton and yes, even the refinery project in Saint John. Talk to our engineering and construction firms who benefit from the mega projects such as Lepreau, the refinery, Coleson Cove or the LNG terminal. Talk to the engineers, many who graduated from UNB or UdeM and the welders, pipefitters and trades people who graduated from our community colleges; these people are working on these projects, buying homes in our communities and raising their families.

    The point is, we need to invest in both university research and businesses.