While there is considerable discussion about the growth of federal government transfer payments to New Brunswick over the past 15 years, less focus has been put on the rise in federal government public administration GDP over that time frame.
In 1997, federal government public administration GDP (economic activity associated with the administration of federal government activities – think ACOA, DFO, gun registry in Miramichi, etc. – was $993 per New Brunswicker (in constant 2002 dollars). By 2011, it had risen to just under $1,500 per person – the fastest growth rate among the 10 provinces across Canada over that time frame. This province went from less than $100 more federal public admin GDP per capita than Ontario to almost $400 more per capita – a point that I am sure the folks in Ontario are making to their federal counterparts.
As we struggle to try and precisely figure out why New Brunswick`s economy is in the doldrums and how long it will last, we need to understand the impact of federal government austerity. We won`t have hard data on this for a while but my view is that federal austerity – transfer growth stagnation, federal employment and overall spending cuts – is a big contributor to NB`s challenges – now and for the foreseeable future.
Per Capita Federal government GDP – by province (2011 and % change since 1997)*
*shown in 2002 dollars. Source: Statistics Canada CANSIM Tables Table 379-0025 and 051-0001.