There is a lot of debate about what the role of government should be to support economic development. Some prefer a highly interventionist state while others would like government with a light touch. Maybe we should have a kind of Hippocratic Oath for economic development – some guiding principle to try and ‘do no harm’ to the economy. Of course this doesn’t mean economy considerations trump all other concerns but it does mean that when government is making decisions – taxes, regulations, programs, investments, etc. that impact on the economy and specific communities needs to be front and centre.
The forestry industry is a good example. For a variety of historical reasons New Brunswick has kept its land primarily forested (many others deliberately deforested to create agricultural land). We now have a vibrant forest sector with 1,100 firms in 217 of the province’s 273 communities (Census subdivisions). Some 13,000 people are employed in the industry around the province – in jobs ranging from tree planting through to value added manufacturing. Thousands more are employed as a result of the industry in professional services, transportation, retail – across the economy.
By sub-sector, the most firms are in forestry and logging – most are very small firms – active in the management and harvesting activities. We have 173 firms in wood product manufacturing, another 180+ in support activities (such as silviculture) and 18 in paper manufacturing.
On a community basis, Saint John has the most forest products-related employment but in terms of the number of firms there are more in Edmundston, Kedgwick, Saint-Quentin, etc. Fredericton has 24 different firms in the industry.
As a share of total businesses (and in this case the data includes public sector establishments too), many communities have at least 10% of all of their businesses in the forestry sector. The following chart shows communities with at least 10% in forestry-related sectors (and at least 50 businesses in total).
If you add in the multiplier effects, the forest products industry is easily the most important of our export-focused industries. Using Statistics Canada GDP and multiplier data from 2016, total labour income generated in 2016 by the forest products industry = $753 million compared to agriculture/food manufacturing $382 million and fish/seafood processing $294 million.
So, when we start talking about banning glyphosate or allocating far more of our land mass to conservation or other major policy decisions we need to have the economic, employment and small business impacts front and centre in the conversation. Again, that doesn’t mean social, environment and other considerations are not relevant – they are very relevant but we need to have a facts-based public debate on these issues.
Speaking of principles, I am starting to think my ‘skin in the game’ principle (adapted from Taleb) needs to be seriously considered when addressing big public policy issues. It seems to me that increasingly those with little or no skin in the game (nothing to lose) are making decisions (or influencing decisions) that will impact those with a lot to lose.
The farmers, foresters, forest products truckers, people with careers in the industry -and the many small communities involved – should have a higher weight in the decisions – than pensioned off retirees that don’t want pulp trucks rumbling down their rural roads.