Give a man a fish and he will eat for a day. Teach a man to fish and he will eat every day.
The following is taken from a summary of the Federal budget:
Federal support for provinces and territories is at an all-time high, and it will continue to grow. For New Brunswick, this totals $2.7 billion in 2010-11, an increase of $591 million since 2005-06. This long-term, growing support helps ensure that New Brunswick has the resources required to provide essential public services, and contributes to shared national objectives, including health care, post-secondary education and other key components of Canada’s social safety net.
Actually the Feds are being gracious. If they took into account the net EI payments to New Brunswickers (the net above premiums collected) and other transfers to individuals the amount would be likely well in excess of $3 billion in 2010-11 but I’ll let their spin doctors figure that out themselves.
When I read this my first thought was how much of that $591 million increase since 2005-06 went towards investments in building a strong economic foundation in New Brunswick? The run on sentence below the amount is a clear indication. Very little. This funding, we are told, is for public services, national objectives, health care, education and the social safety net.
Couldn’t they have slipped in a single word about ‘economy’?
Of course this is a non-partisan issue. The Liberals under Martin and later Cretien doled out hundreds of millions in new money to help NB pay the bills (hiring thousands of new health care workers) but very little for investments that would have helped build that strong economic foundation I am talking about.
I am tempted here to launch into a discussion about Ontario and the federal panic when the economy of that province started to teeter a little. It was all about the economy in Ontario. In New Brunswick, it’s about the social safety net.
I also don’t want to go into a line by line analysis but we know that ACOA spending on economic development is down. We know that federal spending on R&D in New Brunswick is the lowest in the country. We know that federal agencies such as Invest in Canada barely mention New Brunswick. Most of the big federal funding programs that are meant to catalyze economic development all but by-pass New Brunswick. There are a few. The NRC is doing some interesting things.
Why raise it now?
The reality is that Minister Flaherty has hinted that federal cuts are a comin’ and NB Finance Minister Greg Byrne has been quoted in the press as being concerned about this. He should be. New Brunswick gets 41% of its annual budget from the Feds – more than all other provinces in Canada except little old PEI which gets 43% (and we are closing that gap). Obviously if the feds start choppin’ (and some say they have already started with the AIF) it will disporportionately impact New Brunswick.
Wouldn’t it have been interesting if we had used that fish story in New Brunswick circa 1997 when the federal gravy started to flow again? What if the Feds and the Province had said we have a golden opportunity here to plow a pile of that federal revenue surplus into economic development so that when the next big recession hits (say around 2009), New Brunswick will have dropped its need for federal transfers down to 30% or 25% of its budgetary needs.
Because the problem with the Feds using their funds just to jack up public spending is that when they start pulling back, the expenses are still there. We still have to pay for the doctors.
I don’t know why this doesn’t seem to make sense. Maybe I’m the loon here but one large Microsoft software development studio will generate the taxes to pay for 100 doctors year after year after year. That new Daewoo wind turbine facility in Nova Scotia or the new Samsung deal in Ontario is far more beneficial to the provincial economies in the long run than short term cash for expenses (by the way NS got the Daewoo facility for far less than what Ontario had to pay for Samsung – I guess having that old TrentonWorks infrastructure was the deal maker).
I’ll end with my old argument (it may not be overly robust but it’s all I have). It seems like it is far easier for the Feds to give money to cover the costs of government services than it is to help support economic development. My hunch is that if they give NB $100 million for the ‘social safety net’ Ontario won’t even notice but if they give $100 million to attract a KIA plant to Saint John – every think tank from Cornwall to Kenora would be crying bloody blue murder.
That’s a hunch. I don’t know if it is true or not but it is a working hypothesis. If you were to do an analysis of the top 500 investment attraction projects with at least a few million in federal funding in Canada over the past 15 years (auto plants, aerospace, software, etc.) I would bet there would hardly be a single one in New Brunswick. I would be curious. If there are any federal spinners out there it would be nice for you to share this list with us. Of the billions and billions given out through TPC, auto, sustainable technologies, etc. to attract or expand multinational investment in Canada, how much was given to multinational companies to invest in New Brunswick?
In the end, New Brunswick has a pile of things going against it – no oil, no gas, dwindling natural resources, federal interest in only propping up the social safety net, lack of belief among NB leaders that we can really achieve economic development, etc.
How to break through? Who knows. We keep talking about it here to no avail. Maybe elsewhere in the dimly lit halls of power in Ottawa someone is getting through but I wouldn’t count on it.
Back in the late 1990s Kevin Lynch came to Moncton. I think he was the federal DM of Industry at that point. I remember it as if it was yesterday. About 30 of us were huddled in a cramped boardroom to hear what he had to say. I was shocked when he didn’t dole out the usuable pablum about how the feds are such big supporters of NB. He basically told the people in that room to stop whining and go out and fix the economy. Stop coming to Ottawa with your hat in hand. I swear he said this – not verbatim but pretty close.
Done for now. It’s Friday night and my wife has a foreign movie for us to watch.