Category Archives: Business

Feb 24 2014
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Business, Municipal Affairs

If we build it, will more be in store?

If a city measures its civic ambitions by the plans it makes for its downtown areas, then is Moncton poised for a new age of urban renewal?

We can boost and boast till all the pigeons fly their concrete coops along Main Street, but we must admit that the business core – stretching west to Vaughan Harvey Boulevard, east to King Street, north to St. George and south to Assumption Boulevard – has not always reflected the broader community’s tough, entrepreneurial, sophisticated, technologically savvy, and culturally rich attitudes and endowments.

Too many store fronts remain shuttered, too many office spaces are begging for tenants, too many edifices exude that unpleasant aura of dissolution so familiar to urban planners the world over.

And that’s a problem because while other parts of the city can periodically languish without compromising the social and economic integrity of the whole, the downtown is the community’s commons. Its vibrancy electrifies the neighborhoods that surround it, just as its rot eventually spreads throughout the civic body.

Fortunately, we are in no immediate threat of contracting such municipal gangrene. A few years ago, Mayor George LeBlanc offered me a vigorous defense of Moncton’s progress. “Look at what has been happening in just the past five or 10 years,” he said. “In 1996, we had 8,000 people working in the downtown area. Today, we have 15,000. We’ve opened up a public Wi-Fi network, and we’ve seen quite a few high-tech companies doing big things locate in the downtown.”

He wasn’t wrong. In fact, progress is palpable today, even in the downtown, which plays host to thousands of businesses, bars, restaurants and cafes,18,000 office workers, and anywhere from 1,200 to 5,700 residents depending on how you fixes downtown “borders”.

Today, Moncton is a major Canadian customer contact and back office centre with a robust “near-shore” IT outsourcing industry. And it continues to leverage its success with a plan that calls for new partnerships with regional universities to deepen the region’s knowledge economy, diversify the IT economy, and actively promote tech-based entrepreneurship.

Still, a downtown is more than the sum of its moving parts. Like any good and growing garden, it requires constant attention and vigilance – even a little creative experimentation, from time to time.

As The Moncton Times & Transcript reported on Friday, the “proposed Downing Street restoration, a project in honour of Moncton’s 135th anniversary in 2015, is embracing four key themes – Downtown, Celebration, Art & Storytelling and Sustainability.”

The idea is to redevelop the dead-end street – between the Blue Cross complex and the McSweeney Block – that spills out into combined parking lots into an avenue down to the river. “This is an opportunity to explore every possibility,” Mr. LeBlanc said, referring to the plethora of planning options available to the city.

Some may question the value of the project on strictly economic grounds. Shouldn’t we spend our time and money of a downtown events centre? After all, we already expect that such a facility would draw 350,000 a year, generate about $14 million in spending and, in the words of economic development agency Jupia Consultants, “support retail, food service, accommodation and other services in the downtown,” where it “should also support residential growth.”

Meanwhile, another report has estimated that the construction phase, alone, would generate $340 million worth of “economic impacts” for New Brunswick and other parts of the country, as well as nearly $17 million in taxes for the provincial and federal governments. Moreover, it indicated, sales from ongoing operations could easily reach $9.5 million in 2015 (assuming, of course, the centre is open for business by then).

Compared with this, critics may query, what does a road to the river offer?

That, of course, is the wrong question.

The marvelous thing about investing in urban infrastructure is the multiplier effect. Almost any beautification, redevelopment or expansion project yields new opportunities for others.

In this respect, the Downing Street initiative and an events centre complement one another. Both will encourage people to get into the happy and productive habit of spending time (and money) in (and on) our core, of forging the common bonds of community that, in fact, attract and keep industries, entrepreneurs and skilled workers.

In our capacious suburban homes where we park our cars and RVs, we would do well to remember that our downtown areas are not only the manifestations of our ambitions; they are also the means to those ends.

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Feb 14 2014
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Business, Economy, Government

Inequities in the do-nothing budget of 2014

 

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For proof that George Orwell was right, look no further than the 2014 federal budget. There, indeed, all men are created equal, though some clearly appear to be more equal than others.

As, increasingly, modern legislatures confer “personhood” on multinational corporations, we may reasonably consider car and truck makers direct, if not actual flesh and blood, beneficiaries of Finance Minister Jim Flaherty’s munificence. How else would you characterize the $500-million top-up to the Automative Innovation Fund, created in 2008, the last time Chrysler and General Motors came poor-mouthing to Ottawa, caps in hand?

“The automotive industry is among Canada’s leading employers and exporters and is a key contributor to our economy,” the budget sonorously declared. “The sector also directly employs more than 115,000 Canadians in Southern Ontario and across Canada from automotive assembly to parts production.”

Never mind that successive Federal and Ontario governments have had to repeatedly bribe the major manufacturers into keeping their operations in Canada more or less intact. Or should we forget the $3 billion in loans and “non-repayable contributions” both levels of government arranged for the carmakers, courtesy of taxpayers, in 2009?

Back then, the companies complained bitterly about the financial meltdown and the great vanishing act of ready credit. But that was a smokescreen, and not a very thick one. North American automakers, then and now, wouldn’t know good productivity tools if they arrived at their front doors in a fleet of Nissan Sentras.

And, still, their temerity is breathtaking.

Apparently, an additional five-hundred-billion bucks might not be enough to satisfy the ravenous appetite some corporations have for found money. As the Globe and Mail reported this week. “Chrysler Group LLC is seeking a contribution of at least $700 million from the federal and Ontario governments in high-stakes negotiations about the future of its Canadian operation.”

Naturally, that’s a threat – the standing operating procedure of businesses that have grown too big and self-important to fail. They strap governments over barrels because, while they may enjoy legal status as people, they’re the sort of people we typically recognize as sociopaths who have no expectation of ever growing consciences. If they can get away with something, they will.

Alas, twas ever thus and ever thus shall be.

Not so, perhaps, for some of the pricier talent – the genuine humans – who actually occupy the upper management ranks at the car companies. Mr. Flaherty now seems less committed than several of his Cabinet colleagues, to the absurdly wrong-headed and patently unfair income-splitting device for rich folks, for which the budget was overtly paving the way.

“I’m not sure that overall it benefits our society,” he said to his eternal credit this week. “It benefits some parts of the Canadian population a lot, and other parts of the Canadian population virtually not at all. . .I think income splitting needs a long-hard analytical look.”

In fact, it’s already had at least one. Back in 2011, the C. D. Howe Institute concluded, in a special commentary on the subject, “The gains would be highly concentrated among high-income one-earner couples: 40 per cent of total benefits would go to families with incomes above $125,000, and the maximum annual gain from federal splitting would exceed $6,400. The maximum gains from provincial splitting would range from zero in Alberta to $5,750 in Ontario.”

What’s more, the Institute said most households wouldn’t see a dime, while the annual cost to the national accounts would likely exceed $2.5 billion. In other words, “income splitting would fail to achieve its ostensible horizontal equity goal.”

That’s economic-speak for “not fair”.

Still, Mr. Flaherty’s deathbed conversion on the issue (he is widely rumored to be drafting his exit strategy from federal politics) is not likely to convince many of his confreres. The ghosts of Ronald Reagan and Margaret Thatcher are far too comfortable haunting the Conservative corridors of Parliament Hill to brook any collective change of heart among the living.

For them, all men are not created equal.

They never have been and they never will be.

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Jan 17 2014
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Business, Economy, Workplace

The dos and don’ts of reducing disparity

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In an astonishing turn of events, worthy of major international coverage, your humble scribbler finds himself in actual, authentic agreement with the right-wing, free-market- loving think tank, the Fraser Institute.  Sort of.

How this happened is less important than why, which I can summarize thusly: Even a blind pitcher will hit the broad side of a barn once in a blue moon if he’s standing next to a silo. . .or. . .something like that.

The point is when the Institute’s recent report, The Economic Effect of Living Wage Laws, concludes that such legislation in the United States – which is designed to raise poor people’s salaries and, so, reverse growing income disparity – are backfiring, it is largely, albeit lamentably, correct.

“The best available evidence from the U.S. serves as a cautionary tale for us in Canada about adopting living wage laws,” said Charles Lammam, the study’s author and Fraser’s resident scholar in economic policy. “When governments try to legislate wages, there’s typically a trade-off – while some workers may benefit from a higher wage, their gain comes at the expense of others who lose as a result of fewer employment opportunities,”

The press release continues on to explain: “Although activists claim living wage laws can increase wages with minimal costs, the reality is quite different. According to the best available research, a 100 per cent increase in the living wage (for example, going from an hourly minimum wage of $10 to $20) reduces employment among low-wage workers by between 12 and 17 per cent.”

The reason has to do with labour market shock. When living wages are “mandated” to rise regardless of other factors and circumstances, businesses cut back jobs – especially the lower-end ones – and training programs precisely because they are not likewise “mandated” to employ anyone. The relationship between the supply of jobs and the regulations governing pay rates asymmetrically disadvantages workers.

This has the corollary effect of undermining overall productivity and innovation in the private sector despite the fact that Mr. Lammam found evidence suggesting that “employers also respond to living wage laws by hiring more qualified workers and passing over those with fewer skills thereby reducing the opportunity for less-skilled workers to participate in the labour market.”

All of which only means that which we already know: Governments are lousy micromanagers of wages and prices. But can they play any productive role in narrowing the income gap between the rich and the rest? Fraser doesn’t say, but I suspect their answer would be: “a minimal one, thank you very much.”

This is where I (with a sense of great relief) would part company with the Institute.

The socio-economic costs of wage disparities, which are growing rapidly in the western world, are several and serious. As more money flows to fewer people, lobbies and special interests skew public spending priorities.

Suddenly, the infrastructure on which a fair and democratic nation relies – everything from public transportation, roads and bridges to schools and hospitals – becomes less important than tax cuts for the wealthy.

The malign effect on the culture is equally worrying. Prolonged, structural economic inequality creates class systems and all the attendant evils of social immobility: little access to high quality education and jobs; and few, if any, opportunities for meaningful career advancement. In effect, permanent, grinding working poverty becomes the norm for millions until, of course, comes the revolution.

Governments, then, owe it to themselves and to the people – all the people – they represent to be mindful of even the slightest imbalances in the scales of social justice. The role they play is not properly reactive (living wage legislation, as one example), but proactive. Robust, progressive, encompassing social policy designed to create the conditions for broad and general prosperity is what they can and do best.

They should start with a redistributive frame of mind by tithing the personal wealth of rich more aggressively. The notion that economic opportunity trickles down from the top is utterly bankrupt. Rich people spend less of their incomes, per capita, in their local economies than do middle-class wage earners.

Governments should also provide corporate generators of wealth with more incentives for plant reinvestment, job training and apprenticeship programs – for, in effect, a national, private-sector “manpower” program that focusses, once again, on people as much as it now does on profits.

Such are, of course, humble proposals that have, in the current political climate,  about as much chance of being adopted as I have.

On this matter, too, I am certain the Fraser Institute would concur.

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Jan 16 2014
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Business, Economy, Municipal Affairs

Retooling New Brunswick’s economic engine

Resurgo, indeed!

Resurgo, indeed!

This past summer, the Petitcodiac River roared back to life, its tidal bore once more ascendent. Californian surf-boarders came to marvel at its muddy might and frolic in its frothy curl. You Tube went berserk and, for a short, sweet time, Moncton made headlines around the world.

Perhaps, then, it is fitting that the city’s largest downtown hotel, the site of the first economic summit for the municipal region in 20 years, should overlook a waterway whose resurgence holds more than metaphorical meaning. After all, it was not fate that brought back the bore after an absence of 40 years; it was us, mere mortals, who opened the causeway flood gates and kept them open.

As 300 of the community’s movers and shakers from all avenues of life prepare to assemble tonight at the Greater Moncton Economic Summit 2014, one wonders: What new gates shall they open?

Not even the event’s organizers can be sure. “We don’t know what they are going to come up with,” Ben Champoux, CEO of Enterprise Greater Moncton, told the Moncton Times & Transcript. “The tangible result is we are going to have a list of great ideas that are realistic, that are tangible, that people agree with.”

Still, why gather and why now? By every possible yardstick, the Greater Moncton  area has exceeded its own and others’ expectations over the years.

Dieppe, Moncton and Riverview currently comprise the fifth-fastest growing Census Metropolitan Area (CMA) in Canada. In fact, the region has typically attracted at least three times as many people every year than any other area in New Brunswick.

Since 1990, this CMA has added more than 25,000 jobs to its workforce. The annual unemployment rate is one of the lowest in the Atlantic region and substantially below the national average.

In Moncton, alone, home sales in 2011 reached the fourth-highest level in the city’s history. Yet, with an average house price of $158,561, the municipality remained one of the most affordable housing markets in the country.

Meanwhile, the total value of building permits issued in 2011 reached $184 million, the second highest level on record. What’s more, retail sales reached $2.1 billion in 2011, 17 per cent higher than the Canadian Cities’ average.

Then, of course, consider Greater Moncton’s formidable technology sector: major Canadian customer contact and back office operations with a robust “near-shore” IT outsourcing industry. It continues to leverage its success with a plan that calls for new partnerships with regional universities to deepen the region’s knowledge economy, diversify the IT economy, and actively promote tech-based entrepreneurship.

Given the broader context of a fiscally imperiled province and a moribund national economy, Greater Moncton is not only punching above its weight class; its punching above just about everyone else’s .

So, again, why bother brainstorming?

The answer is in the question. And it has something to do with an ounce of prevention.

Summits, conventions, conferences are only marginally useful when their conveners are mired in full-blown crises. Adrenaline and cortisol may be handy hormones to have in a fight. But they are not particularly conducive to rational, creative or innovative thinking.

Greater Moncton’s relatively healthy and prosperous economy permits the sort of blue-sky musings that arc out over the horizon to destinations that remain hidden in bad times. And, of course, the whole point of an idea factory, such as Summit 2014, is to figure out how to avoid the bad times altogether.

What new gates shall open, indeed?

What fresh ideas will be brought to bear on a downtown core that has, frankly, seen better days?

What will impel municipal officials and entrepreneurs to transform the concept of a multi-use events centre into actual bricks and mortar, sooner rather than later.

As Mr. Champoux astutely notes, “The dance floor is more crowded than ever before in economic development and business development. Let’s brainstorm and and define who we are now, what we want and how we are going to get there and who is going to lead that.”

Let us, indeed. Let us begin again.

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Jan 10 2014
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Business, Corporate Responsibility

That’s one for you and 171 for me

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The wretchedly poor are far more likely than the stupendously wealthy to publicly disclose their incomes. After all, the former needn’t ever worry about being kidnapped for a ransom of mac and cheese.

So, we must turn to the Canadian Center for Policy Alternatives (CCPA) to learn that the rich are, indeed, getting richer faster than everybody else in the country.

According to a folio entitled All in a Day’s Work? released last week, the annual compensation packages of Canada’s 100 highest-paid CEOs included, on average, a base salary of $1 million, cash bonuses amounting to $1.73 million, corporate shares and stock options worth $3.93 million, and miscellaneous perks and pensions valued at $1.29 million for a grand total of $7.95 million, giver or take a grand or two.

If anyone is counting, that amounts to 171 times more than the average Canadian wage, which tops up at about $47,000 a year. And, it gets worse (unless, of course, you’re rich, in which case it’s getting better all the time).

“The average wage in Canada increased by 6 per cent between 1998 and 2012 while the average compensation of Canada’s highest-paid CEOs increased by 73 per cent during that same time period (inflation-adjusted),” author Hugh Mackenzie writes. “Reality was harsher for Canada’s minimum-wage workers: If they were lucky enough to have a full-time, 40-hour a week job, minimum-wage workers earned, on average, $20,989 in 2012.”

In fact, another source, the AFL-CIO, says the wage cap in industrialized countries – including Canada – is wider and accelerating faster than even these numbers indicate. In the United States a top CEO, earning an average of $12.2 million annually makes 354 times what a wage-earning stiff pockets in a year. In Canada, the ratio is 205:1. In Germany, it’s 147:1. In England, it’s a downright egalitarian 84:1. “In the past few decades, CEO pay has skyrocketed while the average worker’s pay has stagnated despite increases in productivity,” the union’s website observes.

Of course, the purpose of these timely revelations is not a little political. Neither the CCPA nor the AFL-CIO are especially fond of corporate fat cats. To be sure, the CCPA can’t resist thundering its disapproval: “Five ears after a global recession knocked the wind out of Canada’s labour market, throwing tens of thousands of workers onto the unemployment line and sidelining a generation of young workers, the compensation of Canada’s CEO elite continues to sail along.”

But if such criticisms are expected from the usual assortment of fellow travelers outside the gates and beyond the moat, less predictable is the chorus against excessive compensation rising within the castle keep, itself.

Here’s what McGill University professor of management Henry Mintzberg had to say in a piece he penned for the Wall Street Journal in 2009:

“These days, it seems, there is no shortage of recommendations for fixing the way bonuses are paid to executives at big public companies. Well, I have my own recommendation: Scrap the whole thing. Don’t pay any bonuses. Nothing.”

As Dr. Mintzberg concludes, “Too many large corporations today are starved for leadership – true leadership, meaning engaged leadership embedded in concerned management. And the global economy desperately needs renewed enterprise, embedded in the belief that companies are communities. Getting rid of executive bonuses, and the gambling games that accompany them, is the place to start.”

The larger point is that, ever since much of the world’s financial sector collapsed under the weight of an adept minority’s avarice, fairness and equity (or least some semblance of these scarce resources) have become centerpieces of economic development and job creation among the abused and disaffected majority.

That’s why obscenely high pay packets for CEOs, such as Canadian Pacific’s E. Hunter Harrison who earns a staggering $49.1 million a year, affects public opinion (and perhaps even public policy) more directly today than ever before.

Will it be enough to imbue the system with a little sanity? “Despite the scrutiny and pressure,” Mr. Hugh Mackenzie writes, “the pay of CEOs in Canada and elsewhere has proven to be remarkably resilient.”

All of which suggests a reason other than fear of kidnapping why Canada’s stupendously wealthy are loath to discuss their loot in public: Lest they die of embarrassment.

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Dec 29 2013
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Business, Economy, Energy, Environment, Oil and Gas, Politics

2013: The year of treading water

U.S. economy may be heading for a hard, post-election landing

N.B. economy is heading for a repeat of 2013. . .only worse

New Brunswick enters the new year much as it did the outgoing one: Treading shark-infested waters, praying that the mighty predators will ignore it in favour of fatter, tastier castaways.

Under the grim circumstances, it’s a miracle that the government of David Alward was able to accomplish the little it did.

In 2013, population growth was at a standstill, general unemployment was among the worst in Canada (especially among what remains of the youthful labour force), the participation rate (those actively searching for work) was in a nose dive. About the only bright spot was low inflation and a relatively fixed consumer price index (measured in 2002 dollars).

Worse, perhaps, than any of this was the evident lack of new economic opportunities, without which the annual provincial deficit was fated to hover at $500 million on a structural, long-term debt of at least $11 billion in perpetuity. Theoretically, that meant that every New Brunswicker was on the hook for thousands of dollars.

The reality was that fewer public services were available to a dwindling number of people. And in the absence of any real vision for the future – any sense that timely sacrifices will ultimately yield durable boons – the province descended into caterwauling and complaining.

Some, of course, did their best to reverse the tide of bitterness and recrimination, while acknowledging the patently obvious.

“What we are facing in New Brunswick is a structural, secular decline,” former premier and current deputy chairman of T-D Bank Frank McKenna told me one wintery afternoon in his downtown Toronto office. “The problems we have don’t ebb and flow with the quality of our leadership. There is something more serious going on here. We face circumstances that combine to create a very negative outlook. The entire atmosphere is hugely challenging.”

In fact, he said, “the resource base that remains can be exploited with fewer workers and more mechanization, so it can’t support the number of workers that it once did. Yet, we remain a resource-based economy in a world where the Canadian dollar looks to be in a fairly constant state of parity with the U.S. dollar. So, this, too, is a peril.”

And yet, he said, “Even though I think our situation in New Brunswick is quite pessimistic, I don’t think that it is terminal. There are many places in the world that have faced dramatic challenges. In fact, adversity, itself, became the platform upon which they built sustainable economies. . . This isn’t just a problem of leadership in government. It’s also a problem of followership.

“Our citizens have to understand the full depth and breadth of the dilemma that we are facing, and they have to be prepared to face up to some inconvenient truths. It means that they have to become less reliant on government and more entrepreneurial. It means that they have to take responsibility for their own futures.”

For Mr. McKenna and, indeed, Mr. Alward, taking responsibility for the future means brining Alberta oil east for refining in Saint John – which would create thousands of construction jobs – and developing the province’s nascent shale gas industry.

“The way I look at it,” Mr. McKenna said, “the real win comes when we take our indigenous shale gas in the province and hook it into the Canaport liquified natural gas (LNG) facility in Saint John.”

His voice rose as his enthusiasm peaked. “We have in situ now, calculated by Corridor Resources Inc., 67 trillion cubic feet of gas. That’s bigger than western Canada. It’s a huge deposit. If ten per cent is exploitable, that’s enough to create a revenue source for New Brunswick for decades to come. All in, it would result in about $15-20 billion in investment and 150,000 person years of work. And for governments, it would result in between $7-9 billion worth of royalties and taxes.”

By and large, however, these were mere musings of a former public official. They did little to quell the outrage of a vocal minority of residents – people who firmly believed the provincial government had no business encouraging the development of an industry that they said would poison them.

Would it poison them? Was there, instead, a safe, environmentally responsible approach to the whole affair?

The issue will carry forward into 2014 and, like just about every other issue in New Brunswick, remain there unresolved, as the sharks keep circling.

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Dec 17 2013
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Business, Economy, Energy, Environment, Oil and Gas, Politics

The political art of fomenting depression

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What’s perplexing about the David Alward government’s decision to spend a few thousand taxpayer bucks on TV ads showing New Brunswickers mourning the state of their province’s economy is not that it reflects poorly on our lawmakers’ vision of the future.

What’s perplexing is that our lawmakers seem to believe it reflects well on their own political fortunes.

Less than a year before the general election, the Tories are bringing up the rear in popular opinion. Poll after poll suggests that if the ballot were held today, they’d lose to Brian Gallant’s Liberals by a wide margin.

This somehow impels the big brains who occupy the small offices reserved for government communications to remind New Brunswickers in convincing fashion, and just before the holidays, that the past three-plus years in office have been an unmitigated disaster for the Progressive Conservatives.

The ads show various men and women, who are presumably en route to the oil-black and money-green pastures of western Canada, hanging out on tarmacks and in airport departure lounges, their brows appropriately furrowed.

“I’ve been going for four years,” says one.

“We haven’t got enough opportunities here, we have to go do it out west,” says another.

Finally, up pops the kicker, accompanied by a stern-sounding VoiceOver: “This message is brought to you by the Government of New Brunswick.”

Now, we witness the game, if untried, Mr. Gallant mumbling under his breath and, indeed, over it: “Thank you, Mr. Alward, you just made my day.”

Of course, in the local media, he sounds more like this:

“New Brunswickers don’t need an ad to tell them that there aren’t enough jobs in New Brunswick. This is an ad that is virtually discouraging people to stay and invest in New Brunswick. It’s even demoralizing.”

To which, Premier Alward retorts, “Every day there are families that are living with separation and we believe there are good options long term to see our economy be stronger, our province be stronger, and our people be able to decide to be here and build their communities here. . .It’s a message to all New Brunswickers that we need to be saying yes to allow development to take place.”

Well. . .no, actually.

It is a message to all New Brunswickers that they are at death’s doorstep, and that their only salvation is via the kool aid of shale gas development, which may or not be true. (It’s too early to know anything with certainty).

What I do know, from my years in the marketing communications and advertising industry (I call them my “lucrative” epoch), is that scaring the bejesus out of people is guaranteed to produce only one, durable response: shoot the messenger.

Again, Mr. Alward, Mr. Gallant thanks you.

What’s intriguing about all of this is just how unnecessary it is.

The Alward government holds all the cards in the shale gas industry deck. Its regulations for development are, purportedly, the toughest in North America. It has the benefit of knowing all the best and worst practices. It even has a scientific panel, convened to guide its decisions (though only The Almighty knows when this efficacious advice will be forthcoming).

What’s more, its foes on this file are, though vocal, largely in the minority.

If it truly wants to win the hearts and minds of the majority, why doesn’t it produce ads that speak directly to the issue – spots that fight the fictions swirling around shale gas with facts?

Why not emphasize the positive attributes of an industry that, properly regulated, could help transform the province’s economy – thanks to the money it will generate for public coffers – into an incubator of commercially viable innovations in sectors not specifically related to resource extraction?

Those who argue that the provincial government has no business using public dollars to promote its economic agenda are, among other things, on the wrong side of history. Governments do this sort of thing all the time. In fact, we expect it of them, especially when they don’t do it. What is tourism, except a giant public-sector promotion campaign?

This Tory reign has staked its mandate on transforming the New Brunswick economy through its responsible stewardship of natural resources. Its most recent ad campaign, however, indicates that it has not yet learned how best communicate this otherwise clear and simple message.

Meanwhile, as goes its mandate, so goes any chance New Brunswick has of seizing its future for its now-departing citizens.

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Dec 16 2013
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Business, Government

Canada Post’s long-running vanishing act

The edifice must fall, though this seems unfortunate given the size of the mailbox

The edifice must fall, though this seems unfortunate given the size of the mailbox

Canada Post and I have been playing this game of “now you see me, now you don’t” ever since a letter carrier lost his marbles some years back and emptied the contents of his bag – which included two rather significant items addressed to moi – into the Petitcodiac River before dematerializing, never again to be spied in these parts.

At least that’s how the story – authentic or apocryphal – goes.

Naturally, the guy’s fate became the subject of much speculation around the neighborhood. Some said he had headed west to run a roadside diner along Provincial Highway 63, just outside Fort McMurray. Others insisted he had signed aboard a fishing boat in the Gulf of St. Lawrence. Whatever became of him, we agreed, it had to have been more agreeable than delivering the mail.

As for me, ever since his disappearance, I’ve taken care to scrutinize his successors, of which there have been many.

I usually start by commenting on the weather, and gauging the response.

If the carrier remarks, “Oh you bet it’s frigid, but winter doesn’t last forever,” I grin and return to my work.

If, on the other hand, he starts shaking and ranting about his dental plan, which doesn’t cover the cost of removing the microphones the NSA installed in his mouth, I retreat slowly and, when the coast is clear, dash out to rent a box at the local post office.

It is stunningly good to know that I will not be needing to perform this semi-regular ritual for much longer.

Citing rising costs and dwindling demand, Canada Post has announced that it is phasing out home delivery service in urban centers. By 2019, you and I will have to fetch our own letters, magazines, cheques, bills and summonses by trundling down to one of many neighborhood boxes, the type you see littering the landscape of suburbia.

And I say: That’s fine by me.

Unlike many of my fellow citizens – who, I am certain, will shortly flood this newspaper’s editorial offices with outraged screeds and mournful odes to loss – I do not possess a single, sentimental bone in my body when it comes to Canada Post.

Lest we forget, this is the organization that introduced “Postal Transformation”,   an initiative its website described a few years ago, as a “multi-year program that includes major investments in equipment, technology and processes that will provide reach and access to our customers, across both physical and electronic channels, more targeted communications and opportunities to build customer relationships.”

Within weeks of its implementation, however, the transformation seemed dead on arrival as customers screamed about late delivery and even no delivery. So furious was one Moncton city councillor, he pilloried Canada Post in print, declaring that if it can’t function efficiently, it should be privatized. “This is a serious issue,” Pierre Boudreau said. “It affects the economic well being of our citizens and our businesses. There is no justification – none – for having a letter mailed from Moncton, to Moncton, arriving 10 days or more later.”

Fortunately, service recovered. But Canada Post’s bigger problem is that it is rapidly becoming irrelevant in a world where, increasingly, vital transactions occur over the Internet. Nowadays, even email is often considered passe, as texting and social media communications platforms proliferate. The post office? What’s that gramps?

The sad fact is, the volume of mail in Canada has been dropping by an average of four per cent a year since the beginning of the century. Over the past four years, alone, the annualized decline has been closer to 10 per cent.

Beyond this, Canada Post’s responses to its challenges have always seemed oddly retrograde. The idea that any organization can improve financial performance and the quality of service by making it harder for people receive their service in a timely fashion is, frankly, insane.

Speaking directly about the corporation’s latest home-delivery gambit, former Canada Post CEO Michael Warren told The Globe and Mail last week, “This is a very risky strategy to go very hard on service cuts. . .and then hope that’s going to give you a short-term fix for your borrowing and pension-plan obligations.

Ultimately, this may be the last phase of a game Canada Post has been playing with itself, lo these many years: Now you see it, now you don’t.

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Dec 12 2013
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Business, Security, Technology

Big Brother’s eyes are everywhere

Birds of a feather?

Birds of a feather?

I summon a certain phrase whenever the world’s Internet-traveling tech companies assert their moral authority to protect their millions upon millions of customers from Big Government’s snoops and sneaks: something about foxes guarding henhouses.

In ads in major newspapers across the U.S., and on dozens of websites, Google, Microsoft, Apple, AOL, Twitter, Facebook, LinkedIn and Yahoo (call them the eight horsemen of the digital apocalypse) have announced a new consortium, the purpose of which is to pressure governments everywhere to stop the growing practice of warrantless and unaccountable spying.

That’s a little like asking a gossip to keep a secret. Nevertheless, here’s what they say: “We understand that governments have a duty to protect their citizens. But this summer’s revelations highlighted the urgent need to reform government surveillance practices worldwide. The balance in many countries has tipped too far in favor of the state and away from the rights of the individual – rights that are enshrined in our Constitution. This undermines the freedoms we all cherish. It’s time for a change.”

What’s more, and for their part, “We are focused on keeping users’ data secure –deploying the latest encryption technology to prevent unauthorized surveillance on our networks and by pushing back on government requests to ensure that they are legal and reasonable in scope. We urge the U.S. to take the lead and make reforms that ensure that government surveillance efforts are clearly restricted by law, proportionate to the risks, transparent and subject to independent oversight.”

All of which raises but one question: Do these 100th-of-a-one-percenters, these brilliant geeks who, in some cases, kissed off their Ivy League educations to make billions of bucks in the open market, seriously think we buy their pieties about personal privacy? This is all about business, pure and simple.

That’s what Google CEO Larry Page means when he observes that “the security of users’ data is critical, which is why we’ve invested so much in encryption and fight for transparency around government requests for information. This is undermined by the apparent wholesale collection of data, in secret and without independent oversight, by many governments around the world. It’s time for reform, and we urge the U.S. government to lead the way.”

In fact, the productive relationship between government R&D and the technology sector, has produced most, if not all, of the communications innovations of the past 75 years. That includes everything from the application software that makes your smart phone chatter on command to the Internet, itself. Separating these partners in this continuum of invention would be akin to extracting chlorine from a swimming pool.

What’s at stake is the integrity of Big Data – a jewell so profoundly valuable in the tech world that anything that might cause a public (i.e. consumer) rebellion against its collection and deployment in the service of capitalist enterprise must be quelled. Simply put: When Big Brother overreaches, he hurts the bottom line.

Technology writer, Katherine Arline had this to say in a piece for mobile.pro last month: “Telecommunications equipment maker Cisco Systems announced an anticipated 8 to 10 per cent drop in revenue for the current quarter, sending shares tumbling 13 per cent . . .Cisco said concerns about network security in the wake of Edward Snowden’s disclosures fueled the decline.”

Specifically, Frank Calderone, the company’s CFO said he had seen “a significant increase in the ‘level of uncertainty or concern’ among international consumers. ‘I have never seen that fast a move in emerging markets,’ Calderone said. Cisco customers are concerned that the NSA has backdoors into network hardware from U.S. makers, and analysts think  that companies including IBM and Microsoft are also at risk. Jim Lewis, a senior fellow with the Center for Strategic Studies in Washington, told Reuters that more U.S. companies are likely to be affected. ‘All the big U.S. IT companies are concerned,’ Lewis said. ‘But so far Cisco is bearing the brunt.’”

It may be true that the allegations against the National Security Agency – that it routinely and illegally snoops on average folks by extracting data from unwilling tech companies who must, nevertheless, comply with its edicts – are exaggerated.

But in an industry where reputations are everything and brand loyalty is paramount, perceptions are even more important than reality. Internet-traveling tech companies playing the role of public defender No. 1 is great spin.

Indeed, it might even work.

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Nov 18 2013
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Business, Education

The many-splendored sources of innovation

DSC_0074

No compendium of great inventions would be complete without a nod to the personal computer. Naturally, those born after Blondie first warbled “Heart of Glass” will almost certainly rank the device as mankind’s No. 1 brainchild.

Clearly, the scientists and historians who contributed to The Atlantic’s Technology Issue (this month’s edition) are somewhat longer in the tooth than the average computer geek. For the cover story, “The 50 Greatest Breakthroughs Since the Wheel”, they relegated the near-ubiquitous machine to 16th place.

Meanwhile, the top spot went to. . .wait for it. . .the printing press, because, in the words of one judge, “the invention was the turning point at which knowledge began freely replicating and assumed a life of its own.”

In other words, Gutenberg’s invention (circa 1430) is, arguably, more significant in the history of innovation than a box of transistors and capacitors, because, without it, the pace of technological advancement would have remained stuck in first gear.

That’s oddly comforting to an ink-stained wretch such as myself, who was still writing magazine copy on a Royal portable typewriter as late as 1991.

But, The Atlantic’s exercise, and others like it (The Smithsonian magazine is just out with is “101 Objects That Made America”), is more interesting for what it says about how we perceive innovation than for its actual choices.

Indeed, writes lead contributor James Fallows, “One aspect of the results will be evident as soon as you start looking through them: the debatability of the choices and rankings once you move beyond the first few.”

He continues: “For instance, anesthesia, which, on its debut in 1846, began to distinguish surgery from torture, barely made the top 50, and that was only because one panelist pushed it hard. If I were doing the ranking, it would be in the top 10, certainly above the personal computer. In this case the test for me is: Which would I miss more if it didn’t exist? . . .I rely on personal computers, but I got along fine before their introduction; I still remember a dental procedure in England when the National Health Service didn’t pay for novocaine.”

Here, in Canada, the policy debate about innovation and technology has drawn a line in the sand between researchers and scientists, on one side, and bureaucrats and politicians, on the other.

The thinking, becoming ever more prevalent, in government is that innovations must be “useful” or “relevant” and replete with everyday applications to justify public investment. The National Research Council (NRC),  the Government of Canada’s “premier research and technology organization (RTO)” puts it this way: “RTOs are mission-oriented providers of innovation services to firms and governments, dedicated to building economic competitiveness and, in doing so, improving quality of life.”

Its vision is “to be the most effective research and development organization in the world, stimulating sustainable domestic prosperity.” Its mandate is to work with “clients and partners” and “provide innovation support, strategic research, scientific and technical services to develop and deploy solutions to meet Canada’s current and future industrial and societal needs.”

The language signals a recent and deliberate shift in the NRC’s position in society – one that’s more closely aligned to the interests of industry than to those of academia. And that worries many in the research community.

“You can’t convert a government research agency into a contract research organization,” Peter Morand, former dean of science and engineering at the University of Ottawa and a past president of the Natural Science and Engineering Research Council told the Globe and Mail last May.

Added David Robinson of the Canadian Association of University Teachers in the same article: “It’s a very sad day for science in Canada. . .(The NRC) “was established to develop Canada’s basic research capacity and did perform admirably.”

Still, the root causes of innovation – especially of the technical varieties – are notoriously difficult to pin down. It is more often than not the case that hard science and applied research dance a stately minuet, from which emerge everything from nuclear fission and the telephone to the personal computer and the printing press.

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