Category Archives: Business

Nov 04 2013
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Business, Economy, Environment

Pipelines hold both promise and peril

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Canada is one of the world’s great energy behemoths; a constipated behemoth, yes, but a behemoth, nonetheless. All it needs is a fact-acting laxative or, as Saskatchewan Premier Brad Wall advises, a few more oil pipelines to. . .well, stay regular.

Here endeth the metaphor (you are welcome), but not the over-arching point, which is accumulating currency in political circles across the country these days: Canada’s natural resources, particularly oil, promise untold prosperity from coast to coast to coast, if we could only get them to markets.

At a Canadian Chamber of Commerce event last week week, Mr. Wall sounded downright dejected. Another “country with all this (oil) would find ways to move energy to tidewater, to improve the return to Canadians for the resource, to ensure there are jobs for the future for all of us – including First Nations – for the entire country,” The Canadian Press quoted him.

“We would do everything we could to ensure we had this great resource working not just for today’s economy  but helping for the economy of tomorrow. We have to get our head around moving that energy.”

In fact, it would seem, most Canadians agree with him. Research company CROP Inc. has released a survey that indicates that people in this country are generally keen on at least the idea of pipelines. According to the Telegraph-Journal’s Chris Morris,  “The survey suggests that more Canadians agree with the major pipeline projects, including the Energy East proposal to bring oil to New Brunswick. The results found that 57 per cent of respondents endorsed the project compared to 25 per cent against.”

Meanwhile, “83 per cent of respondents said they are favourable to to the development of the oilsands,” though “41 per cent believe development should be slowed down, while 42 per cent are happy with the current pace.”

So, the solution to Canada’s energy stultification seems obvious. Or does it?

A recent CBC News investigation suggests the issue is a tad more complicated than the pro-pipeline lobbyists would have us believe. The public broadcaster reports that “pipelines regulated by the federal government – which include some of the longest lines in the country – have experienced a swell in the number of safety-related incidents over the past decade.”

Specifically, documents the CBC obtained under access-to-information from the National Energy Board (NEB) show that the number of “overall pipeline incidents”, which include leaks, spills and fires, has jumped by a factor of two since the turn of the century. The number of spills, alone, have tripled.

“More than four reportable releases happened for every 10,000 kilometres in 2000, or 18 incidents in total, according to NEB data,” the CBC reports. “By 2011, that rate had risen to 13 per 10,000 kilometres, or 94 incidents.”

In fact, that may not sound like much, given that 90-odd companies operate roughly 71,000 kilometers of pipe in Canada. And, in the context of this summer’s  devastating events at Lac-Megantic – at which a derailment of train cars carrying heavy oil exploded, killing dozens of people – pipeline leaks seem the far lesser of two evils.

Certainly, the NEB doesn’t appear overwrought about the numbers, attributing their rise to better reporting standards. “We’ve been out there talking with industry associations and the companies themselves to ensure that they are fully aware of what the reporting requirements are and I think that’s why we’re seeing an increase right now,” the NEB’s business leader for operations, Patrick Smythe, told the CBC.

It’s entirely possible he’s correct. But even if he is, that doesn’t change the fact that pipelines are, like any other piece of transportation infrastructure, vulnerable to the inexorable onslaught of time and weather. They must be maintained. And, just as importantly, they must be seen to be maintained.

In the end, nothing halts energy development in Canada with greater force than a distrustful, angry, agitated public.

The current shale gas debate in the pristine countryside of fair New Brunswick – where a pipeline might well wend  – proves definitively that industrial-strength spin has its limits.

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Oct 11 2013
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Business, Climate, Government

Counting down the days to the Great Transformation

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The world as we know it has been coming to end for years now. We haven’t had to look far to perceive the portents of impending doom: in the entrails of Wall Street corpses; in the tea leaves of governments that no longer work; in the uromancy that predicts widening income gaps between the rich and the rest.

We just haven’t been able to reliably nail down a year for the Great Transformation. Until now.

A researcher at the University of Hawaii, who used to work at Dalhousie University in Halifax, N.S., thinks he knows. The point of no return will arrive. . .wait for it. . .in 2047. . .give or take.

Camillo Mora, who studies numbers for a living, tells the Globe and Mail’s science reporter Ivan Semeniuk that, overall, this is the year in which climate change will become a permanent feature of life on Earth. . .more or less.

According to the article, “The turning point arrives. . .as a worldwide average, if fossil fuel consumption continues unabated; as late as 2069 if carbon emissions are curbed. City by city, the numbers are a bit more revealing. In Montreal, for example, the new normal will arrive in 2046, and for Vancouver not until 2056. But the real spotlight of Dr. Mora’s study is the tropics, where profound changes could be entrenched in little more than a decade.”

As the good doctor says, “Today, when people talk about climate change, the images that come to mind are melting ice and polar bears. People might infer from this that the tropics will be less affected.”

People would be wrong.

But, then, there’s nothing new about that.

Once, not very long ago, people assumed that economic globalization would insert several chickens in pots from Beijing to Kalamazoo – that gross domestic products around the world would rise like juggernauts, heedless of any and all counterforces they may encounter.

Once, not very long ago, people assumed that democratically elected governments served the best, common interests of the majority of voters – that reason and circumspection would effectively quell fanatical and reactionary figures intent on reshaping the public sphere in their own ideologically pinched and impoverished image.

Now comes word from the International Monetary Fund (IMF) that, generally speaking, the world’s got itself in an economic ringer – one from which it is not likely to emerge any time soon. Welcome to the age of slow growth.

“Emerging economies have cooled off,” an item in The New York Times reveals. “Europe remains in the doldrums. The United States is facing fiscal uncertainty, and its powerful central bank is contemplating easing up on its extraordinary stimulus efforts, with potentially global ramifications.”

As things stand, the IMF “foresees the world economy increasing by about 2.9 per cent in 2013 and 3.6 per cent in 2014. That is down from 5.4 per cent in 2007, before the global recession hit.”

If its predictions pan out, a few will be spared, thanks to their impenetrable cocoons of wealth and privilege. But most can expect lower standards of living, fewer good jobs, higher costs and increasing poverty and homelessness.

Meanwhile, over in Washington, D.C., legislators are twiddling their thumbs.

“The federal government shutdown and looming deadline to raise the debt ceiling have merged into one major problem on Capitol Hill, though neither issue has a resolution in sight as the government shutdown heads into its second week,” CBS News reports. “Democrats and Republicans (have) dug further into their respective positions: Republicans are calling on Democrats to negotiate over a short-term spending bill and a debt-ceiling increase, and President Obama says he is ready to negotiate over any topic – once the Republicans pass legislation to re-open the government and raise the U.S. borrowing limit without any conditions.”

All of which prompted Laurence Booth of the University of Toronto’s esteemed Rotman School of Management to tell the Toronto Star, “Any sane person obviously believes the U.S. isn’t going to default. That would cause an earthquake in financial markets around the globe.”

Of course, once upon a time, any sane person obviously believed that climate change could very well spell the end of the world – at least, as we know it.

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Sep 18 2013
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Business, Politics, Society

Another day, another plan to fix New Brunswick

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Somewhere, beneath the florid appeals to New Brunswick’s angels – to its fairness, justness, competence, impartiality, integrity, and respect – lies a plan to exorcise the province of its equally durable demons, its languishing labour force and perishing skills.

Thus begins the David Alward government’s glittering, new Labour Force and Skills Development Strategy, inscribed as if on tablets come down from the mount: “New Brunswick has a proud history of innovation and national and international leadership. We have flourishing multinational companies and thriving small- and medium-size enterprises.”

And yet, o brothers and sisters, woe still walks among us: “New Brunswick is, however, facing challenges that cannot be solved quickly. . .a median population age that is older than all other provinces, a shrinking youth age group, a decreasing birth rate, and an adult literacy rate that limits employment options for some.”

What shall we do? For starters, we shall engage in the making and reading of charts, specifically the “GNB Strategy Map”, in which a “stronger economy” and an “enhanced quality of life” are possible even though we must, henceforth, live “within our means”.

This implies that “all working-age New Brunswickers and newcomers” will have “an opportunity to participate in the labour market” provided “that they have the right skills to match provincial labour market needs.”

How shall this be accomplished? It has something to do with stimulating “the creation of quality jobs” for citizens, fostering “private sector business growth” and “driving economic development efforts” to, in the final analysis, “provide value for tax dollars. . .achieve a sustainable budget” and “prioritize, optimize and improve processes” in government.

All of which suggests, if little else, that this government is no slouch in the report-writing department. And, to be fair, the document does contain no fewer than 44 “action” items, some of which actually make sense.

Still, one can’t help suspect that, a mere 12 months before the next election, many of these measures have lost much of their utility. They would have been more effective three years ago when the problems that beset the province’s labour force were just as clear, if not as acute, as they are today.

“In coordination with other partners,” the government intends to “develop labour market information products to assist with selecting relevant post-secondary education and employment opportunities in New Brunswick.” What’s more, it will encourage “employment counsellors” to “visit students beginning in middle school and again in high school to provide awareness of occupational forecasts and related skills requirements.”

The strategy is also big on collaboration to wit: “Government will develop a coordinated approach with departments and other partners to ensure that all parties entrusted with growing the economy, work together and are aware of each others strategies and programs, i.e., New Brunswick Business Council, Conseil économique du Nouveau-Brunswick.”

It will also “work with employers to increase their knowledge of the benefits and opportunities surrounding posting of jobs on the Job Bank and assist them in developing job and position descriptions.”

In fact, the key to the plan’s success, it seems, is its “many-voices” approach, for “to meet (the) challenges facing the province, strong, collaborative partnerships are required not only within government, but with communities, industry, businesses, educators, and labour to ensure that New Brunswick has the human resource capital to meet the needs of the labour market.”

Again, though, we’ve known this for years. What’s different now, apart from the fact that things are getting worse?

The frayed achilles tendon of this report – indeed, of virtually every version of a prosperity agenda since before Bernard Lord was premier – is the specific who, what, where, when and how much.

It’s one thing to declare that “Government will work towards ensuring that all high school students have a transition exit plan prior to graduation” or that it will likewise “work with the early childhood education sector to strengthen the sector’s capability to administer high-quality programming by its members for the benefit of young children.”

It’s quite another to spell out the actual mechanics. That’s what a proper, useful  strategy does.

One must assume that this government has a real plan.

Sadly, this particular document, as loftily well-intentioned as it may be, just isn’t it.

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Sep 17 2013
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Business, Media

The tragicomedy stylings of the expert elites

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Every so often, when a major newspaper musters a considerable pool of expertise to explain what it regards, with solemn conviction, as an enormously complex tale of hubris and woe, I am struck not by how difficult but by how strangely easy it is to follow the human saga.

This, despite the fact that the customary, editorial waiver clearly alerts me, like a warning label on a pill bottle, that what I am about to consume may cause drowsiness, confusion or even nausea.

So it was a few days ago when, on the fifth anniversary of the global liquidity  meltdown, I had occasion to delve into the Report on Business’s (ROB) cover story, “The financial crisis: Through their eyes,” in which no fewer than nine senior reporters presented the results of their interviews with 18 “key players” in Canada’s capital markets, including Finance Minister Jim Flaherty, former Bank of Canada Governor Mark Carney and three private bank CEOs.

Part testimony, part confession, the piece reads a bit like a transcript of a group therapy session for capitalists still suffering from the effects of post-traumatic stress disorder even as, the ROB notes, “the visible scars of the financial crisis are fading.”

But if I had expected, while reading the piece, to fight a battle for illumination with only dim certainty of winning – if I had assumed that I would necessarily marshall every weapon in my intellectual arsenal to fully understand what really happened to the global economy in 2008 and 2009 – it became quickly apparent that no such effort would be required of me.

These experts, these “key players”, are no more lucid on the subject today than they were a half-decade ago. Their most revealing observations are entirely familiar, thoroughly explicable, and could apply to any catastrophe the fates and furies periodically visit on hapless souls.

“In July of ’08, I attended what’s called the international pensions conference, [attended by] CEOs of the 40 largest pension plans, corporate and public,” Jim Leech, who was a senior vice-president of Teachers’ Private Capital in 2008, tells the ROB. “They were pretty oblivious to what was going on.”

Mark Carney: “The summer of 2008 was awful because the system was coming apart and people didn’t appreciate what was happening.”

Louis Vachon, CEO of the National Bank of Canada: “It’s definitely not the end of financial crises. I think there will be more. Will we see something as bad, and as socially impacting as we saw in ’08? I think the odds of that occurring again are very, very low in the next few decades. From my lips to God’s ears on that one.”

That all of us – common investors and financial adepts, alike – were “oblivious to what was going on” and that “people didn’t appreciate what was happening” and that avoiding a repeat performance at some point down the road may hinge on some sort of supernatural intervention confirm what we already suspect, and have suspected all along: None of us really know much about anything, especially the big things in life.

Still, David H. Freedman, a regular contributor to The Atlantic, thinks he knows just enough about the blind spots in human comprehension to write a whole book on the subject. In his 2010 effort, Wrong: Why Experts Keep Failing Us – And How to Know When Not to Trust Them, he observes, “Economists weren’t exactly lining up in late 2007 and early 2008 to warn us all that national economies, global financial institutions, and real estate markets were rapidly spiraling toward a black hole of potential collapse.”

That’s because they didn’t know. At least, they didn’t know the larger story as it grew unwieldy, elaborate and, ultimately, out of control.

In fact, I like to express the limits of expertise almost algorithmically: Specialized knowledge grows increasingly superficial and unreliable in direct proportion to the degree of complexity built into any system of human endeavor. This goes for financial markets, political regimes, Greek tragedies, Norse sagas, and the comedy routines of the late, great George Carlin.

Of course, I could be wrong about this. I’m no expert.

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Sep 03 2013
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Business, Economy, Politics

Taking our economic bull by the horns

 

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It is a fitting chapter in a saga that is becoming as familiar to New Brunswickers as olympian economic woes are to Greeks.

Promising technology upstart makes headlines with its innovation and ingenuity; sells itself to an international company for a pretty penny; vows, nevertheless, to remain a vigorous, job-generating player on the provincial landscape; has the rug pulled out from under its head-office-manacled feet; lays off a hefty chunk of its workforce; waits for something else to happen.

It’s the waiting for something else that is the recurring theme in New Brunswick’s beleaguered commercial sector. And Radian6 of Fredericton is just the most recent, unhappy example.

Last week, the tech firm’s parent company, Salesforce.com of San Francisco, announced it was trimming about 200 jobs worldwide, roughly 67 of them in this province. The move came after the global social media monitoring operation purchased ExactTarget, an email marketing outfit, for $2.5 billion. The move, it said, was necessary, though it didn’t bother to explain why or how.

In a statement, Salesforce declared, “Combining ExactTarget with our existing Marketing Cloud provides synergy, and we will be reducing our total headcount . . .to reflect this opportunity. . .We care deeply about our employees and we’re providing resources to position them for success in the next step of their careers – whether that’s a new position within Salesforce.com or a new opportunity elsewhere.”

That’s mighty decent of them, only it’s not entirely clear where the surplus “headcount” will actually land in a province where the track record of job losses is now more entrenched than in any other part of Canada.

The many layers of poignancy in all of this are hard to miss.

Salesforce.com’s 2011 purchase of Radian6 – whose homegrown technology enhanced the American firm’s competitive position in the marketplace – for $326 million was heralded by all, but a few who wondered about the efficacy of offshore ownership, as a coup, positive proof that New Brunswick companies can succeed internationally.

Only last year, the provincial government offered Salesforce.com a payroll rebate totaling $3.8 million to help Radian6 create 300 jobs in Saint John and Fredericton by 2018. According to news reports, it has already dispensed about $500,000 of the fund, though Premier David Alward is at pains to explain why this is nothing to fret about.

Talking to reporters last week, he said, “There are significant accountability mechanisms or processes in place between the department and the company and I have full confidence that those will be followed and that the company will live up to their responsibilities under the agreement.”

Translation: Even though Salesforce is cutting its staff in New Brunswick today, it is still obliged to boost the total number of jobs by 300 over the next five years.

Still, that’s a remarkably optimistic posture for any government to assume regarding any foreign-owned entity operating within its backyard. Global economic trade  winds (or headwinds, as the case may be) routinely shred “agreements” to play nice with the locals. Ribbon cuttings, alas, are far less frequent than the cutting of losses.

In fact, none of this was even remotely preventable. We should expect such blips in jobs – up or down – as log as business flows more-or-less freely across national borders. Where New Brunswick’s private and public sectors must train their attention is on the urgent need to inject greater diversity, better capacity, more durable self-sufficiency, into the provincial economy.

We must start generating new opportunities that will load our cities and smaller communities with options. For every Radian6 that rises to prominence, there should be sixty others percolating with promise. Our provincial innovation agenda should have less to do with payroll support for existing (and exiting) enterprises and more to do with animating early-stage growth among commercially viable startups – export assistance, plant development, skills development, technology adoption.

For all the talk of pipelines and shale gas – opportunities (or challenges) over which we have little control – we must stop waiting for things to happen to us.

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Jul 11 2013
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Business, Economy

Is a corp’s big difference always better?

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In the category of “tell us something we didn’t know,” fit for summer reading beside the bonfire, a major international market research firm’s report confirms that most people think private industry is better equipped than politicians to save the planet.

To which the only appropriate response is: “Of course it is, as it has all the money; but will it?”

The latest word from Ipsos Global@dvisor – a monthly, online survey of “consumer citizens in 24 countries” – concludes that 63 per cent of its target sample “believe that corporations can make a bigger difference in the world than politicians, who only got a 37 per cent preferential rating.”

The company’s news release continues jauntily:

“Surely both corporations and government get a bad rap for one thing or another any day you turn on the news or look at social media posts. Could the great disparity in confidence have to do with the partisanship that seems to keep some governments from moving forward with any speed?

“Is it that the Warren Buffets and Bill Gates of the world have shown the great potential big business has to cure disease, feed the hungry and invent game-changing technology? Is it that corporations have better PR machine(s) than government(s)? That’s research for another day. Meanwhile, we hope both groups give us ample reason to keep our confidence growing.”

We hope, indeed. But, given recent track records, our faith does not spring eternal on the subject of corporate social responsibility.

Not so very long ago, we may recall, the world’s richest governments effectively united to prevent the international financial system from collapsing under the weight of its own malfeasance. They did so by throwing countless billions of taxpayers’ dollars at big banks in every western nation, save Canada.

In the years since this orchestrated salvation, it’s been business as usual for high finance. And corporate America has never been better positioned to commodify the fruits of its greed.

“Corporate profit margins just hit an all-time high,” Henry Blodget, a former analyst on Wall Street who runs the Business Insider website, wrote a year ago. “Companies are making more per dollar of sales than they ever have before. (And some people are still saying that companies are suffering from ‘too much regulation’ and ‘too many taxes.’ Maybe little companies are, but big ones certainly aren’t).”

Meanwhile, he noted, “Fewer Americans are working than at any time in the past three decades. One reason corporations are so profitable is that they don’t employ as many Americans as they used to. . .Wages as a percent of the economy are at an all-time low. This is both cause and effect. One reason companies are so profitable is that they’re paying employees less than they ever have as a share of GDP. And that, in turn, is one reason the economy is so weak: Those ‘wages’ are other companies’ revenue.”

In March, marketwatch.com reported, “The company bottom line is faring a lot better these days than the average American’s weekly paycheck. In 2012, corporate profits as a share of the economy hit the highest level since World War Two, but the overall compensation of workers fell to a 57-year low. . .Last year, the profit of corporations rose to 12.4 per cent of gross domestic product. . .By contrast, compensation slipped to 54.6 per cent of GDP in 2012 from 55 per cent in both 2012 and 2011, according to the Commerce Department.”

Canadian companies were not quite as fortunate. In May, Stats Can reported that the nation’s corporations posted a mere $74 billion in operating profits during the first three months of the years. That was down by a 1.2 per cent, following a 1.4 increase in the final quarter of 2012.

Of course, the corporate world is in no way obliged to part with its loot just because the resources it consumes are, by and large, the common property of all.

But must we continue to delude ourselves that the “bigger difference” it can make in the world is necessarily for the better?

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Jul 02 2013
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Business, Economy, Environment, Government

A cold-water wake-up call from Mother Nature

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As the flood waters in Calgary begin to abate, the question turns – as it so often does in such cases – to the issue of culpability. Who’s to blame?

Was Mother Nature having an especially bad day when she dumped more than 100 millimeters of rain in less than a day on the western city? Or was there more to the deluge than met the eye? Did we humans exacerbate the hydrological cycle through global warming and then promptly ignore the predictable consequences?

In his commentary, which appeared in major newspapers across the country last week, nationally award-winning energy writer and Calgarian Andrew Nikiforuk answers definitively. “If nothing else the city’s often arrogant elites have been reminded that the province’s Chinese-style economic growth is vulnerable to extreme events,” he notes. “A crowded and overdeveloped province of four million is nowhere near as resilient as a province of one million. . .Albertans have also learned that climate change delivers two extremes: more water when you don’t need it, and not enough water when you do. The geographically challenged have also become learned, once again, that water travels downhill and even inundates flood plains. So climate change is not a mirage. Nor is it weird science or tomorrow’s news. It is now part of the flow of daily life.”

In fact, according to a Global News report (also covered by other print and broadcast outlets), “Strategies to prevent another devastating Albertan deluge sat on the provincial government’s desk for more than half-a-dozen years. George Groeneveld headed a flood mitigation committee after record-breaking rainfall and river levels soaked the Calgary region in 2005. They were tasked with figuring out how to lessen the risk of a recurrence and spent a year coming up with 18 recommendations.”

The suggestions included ensuring the Alberta Environment “coordinate the completion of flood risk maps for the identified urban flood risk areas in the province; develop a map maintenance program to ensure that the flood risk maps are updated when appropriate; identify priority rural flood risk areas that require flood risk mapping and develop a program to prepare the maps.”

In an interview with Global News, Mr. Groeneveld said “Of course I’ve always been disappointed. . .People have very short memories with floods: Go through one good year and they start to relax again.”

The signature feature of climate change is the increasing occurrence of extreme weather events. On the East Coast, that means the number and severity of hurricanes is rising. On the Great Plains and prairies, the number of super cells producing supremely destructive tornadoes is on the upswing. It means more and longer droughts; more and deadlier wildfires; and it means more water falling from on high. Much more.

According to an item in the Calgary Herald, John Pomeroy, a Canada research chair in Water Resources and Climate Change, says the floods in the Alberta foothills has “changed changed the Rockies. . .forever. . .He says the overflowing waters have changed everything from how the landscape will handle future flooding to the animals that live in it. Pomeroy says Alberta towns and cities will need much better flood defences in the future to handle high rainfall events. He says the Bow River has swallowed so much silt from eroding banks that its status as a blue-ribbon trout stream is in doubt. Pomeroy says many of the developments that have been affected by the flooding should never have been built in the first place.”

Given the crucial role Alberta now plays in the Canadian economy, these so-called “natural disasters” are no longer local calamities; they are clear and present threats to national security.

And while it may be one thing to turn a blind eye to the science of global warming, it is quite another to reject the evidence one’s own eye gathers as the sky proceeds to fall on one’s head.

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Jun 12 2013
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Business, Municipal Affairs

No more detours for Moncton events centre

Resurgo is action in latin. And that's a dead language. Get 'er done boys and girls

Resurgo is action in latin. And that’s a dead language. Get ‘er done boys and girls

Asking development consultant David Campbell and university economist Pierre-Marcel Desjardins to assess the likely commercial impact of a downtown events centre in Moncton was a tactically masterful maneuver. For City Council, it was also a courageous, even risky, one.

No one, it’s fair to say, knows more about how this municipality ticks than either of these two Hub City residents, who spend their days taking the pulse of the province and of its variously successful, variously struggling, communities. When they speak, as the tagline goes, people listen.

So, had Messrs. Campbell and Desjardins concluded, after careful examination, that a centre would not be worth the $100-million price to build, that would have been the end of it. That they have, in fact, found just the opposite suggests that city mothers and fathers no longer have any credible reason to pump the brakes on a project that would, almost certainly, resuscitate the urban core.

Not that many of them need much convincing. As Mayor George LeBlanc makes plain in a video posted to the city’s website, “Pursuing a new downtown, multipurpose sport and entertainment centre has been one of my key priorities for Moncton. . .It will make the downtown more vibrant and prosperous. It will be a catalyst for. . .development.”

How much development now seems clear.

According to Mr. Campbell’s presentation to Council this week, a new centre will annually “attract between 317,000 and 396,000 people. . .generating between $12 and $15 million in spending.” In the process, it will “support retail, food service, accommodation and other services in the downtown,” where it “should also support residential growth.”

Meanwhile, Mr. Desjardins 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, he indicated, sales from ongoing operations could easily reach $9.5 million in 2015 (assuming, of course, the centre is open for business by then).

But the important point, which Mr. Campbell argues rigorously and cogently, is that a new centre is not – as some have proposed – a luxury; it is quite nearly a necessity.

“Downtown – only 1.5% of the city’s land area – generates nearly 10% of the total assessed tax base and over 14.4% of property tax revenues,” he notes. In fact, the urban core “generates nearly 11.5 times as much property tax revenue, compared to the rest of Moncton, on a per hectare basis.” What’s more, “the cost to service the downtown is much lower compared to many other neighbourhoods and commercial areas around the city.”

Yet – though it plays host to 800 business, 3,000 bars, restaurants and cafes 18,000 workers, and anywhere from 1,200 to 5,700 residents (depending on how one fixes downtown “borders” – the area is in a state of disrepair.

“The economic engine is showing signs of weakness,” Mr. Campbell laments. “There is currently over 350,000 square feet of vacant office space in the downtown. Office space vacancies across Greater Moncton have risen from 6.6% in 2011 to an estimated 13.5% in 2013. Residential population in the core declined by 9.1% between 2006 and 2011. Including the expanded downtown, the population dropped by 3.3%. (This) compared to a robust 7.7% rise across the city.”

Given the fundamental importance of the downtown district to the city’s overall economic condition – and its evidently lackluster performance in recent years – a new centre, deliberately designed to breath life into the area, seems both right and logical.

Naturally, some will continue to argue that the virtues of such a project are merely ornamental. Certainly, City Council has employed a go-slow approach in deference, perhaps, to these voices and sometimes to its own bemusement (a graphic on the municipal website depicts its “step-by-step decision points” beneath images of waddling turtles and the headline, “Downtown Centre: Not a Done Deal”).

Still, with this new research in hand, surely the time has come to quicken the pace and proceed as this city has done so many times in the past: with cheerful assertiveness, if not abandon.

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Jun 11 2013
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Business, Economy, Environment, Politics

New Brunswick’s biggest natural resource is fury

Seeing the forest for the trees in hydraulic fracturing

Seeing the forest for the trees in hydraulic fracturing

Those who believe that New Brunswickers are apathetic about their futures need only survey the province for visible signs of outrage, which are everywhere. Apparently, we are mad as hell and we’re not going to take it anymore.

The question is: What is the “it” we refuse to “take”?

Once upon a time, it was the sale of NB Power to Hydro-Quebec. The contretemps over that issue brought down a government already reeling from the outcry over its proposals to establish a network of polytechnics in the province and reform French language instruction for Anglophones.

These days, it’s cuts to the public service, education and health care that have ignited the pyres of dissent from Sackville to Edmundston.

No issue, however, is as incendiary as hydraulic fracturing, with its dark promise to pollute and sunder communities wherever the shale gas industry sinks its wells.

Last week, the RCMP arrested three people – about 120 kilometers north of Moncton – who were protesting SWN Resources seismic testing (advance work in the exploration of tight petroleum plays). The cops said the trio refused to make way for trucks. Other observers at the scene said the authorities overreacted.

For his part, Brad Walters a professor of environmental studies professor at Mount A, called it a sign of the times, to which we should grow accustomed. He told  CTV it reflects “a combination of things coming together here. . .There is this network of over 30 groups across the province who are talking to each other and are very strongly opposed to shale gas development.”

Call it the immoveable object that meets an unstoppable force, but opposition to shale gas in this province has become a permanent feature of the landscape. No careful ministrations by the provincial government, promising to enforce the “toughest” regulations in North America – no vows by industry representatives to adhere to only the highest standards of environmental stewardship – are likely to placate the critics.

This worries people like Susan Holt, president and CEO of the New Brunswick Business Council, which commissioned a report, released recently, on the economic potential of shale gas in the province. “Some of the opposition is a little bit disconcerting to industry because it appears to be general industry opposition rather than specific,” she told the Telegraph-Journal’s Chris Morris. “When New Brunswickers resist general industrial activity, that is more nerve-racking for our folks because it begs the question, how do we develop our economy?”

How, indeed?

Legitimate concerns about water and soil degradation and principled stands against fossil fuels warming the planetary orb only partially explain the current antagonism. At the heart of the hostility to shale gas is a position against which there is no defence: People simply detest the idea of it. Onshore petroleum development somehow cuts against the weave of the province’s social fabric.

The identical mental dynamic was at work when potash was first developed. It was in even planer view when wind turbines began dotting the countryside. Lest we forget uranium?

Logic is a blunt instrument of persuasion when passions are running high, as they tend to do when statements from the provincial Department of Energy and Mine declare that “Nine companies hold a Crown license to search and/or lease within New Brunswick. These include a total of 71 rights agreements, covering over 1.4 million hectares, for the exploration and production of oil and natural gas.”

In fact, the Province has spent a good deal of time touting New Brunswick as the undisputed nexus of the emerging tight oil and gas industry in Atlantic Canada. Estimates, it likes to say, peg the volume of natural gas trapped between layers of sedimentary rock hundreds, or even thousands, of meters beneath the soil’s surface at close to 77 trillion cubic feet.

What it – and industry, itself – hasn’t spent much effort doing is reminding New Brunswickers that no one yet knows whether the resource is even commercially viable. Nor have they attempted to explain (until very recently) the safeguards that must attend its extraction and development.

Now, it may be too late to expect a sea change of attitude.

It’s a shame we can’t harness the energy from all the outrage we generate.

If we could, we’d never again worry about the future of our province.

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Jun 05 2013
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Business, Energy

What are true benefits of an eastern pipeline?

As New Brunswick Premier David Alward fluffs the pillows and hoovers the welcome mat for his oil-rich, Alberta counterpart, who arrives for a chin-wag in Fredericton later this week, hope – with just a hint of desperation – is in the air.

Almost nothing, it is safe to say, has so animated this government’s aspirations for long-term prosperity than the promise of a west-east pipeline terminating at Saint John, where the mighty petroleum empire of Irving Oil holds sway over the Fundy basin. Indeed, Mr. Alward has designated the endeavour – still only a happy preoccupation – the crown jewel of his economic portfolio.

Some months ago, in an interview, he told me, “We’re investing significant energy in this. We’re meeting with leaders right across the country to see if there is a business case. We believe this could be as important to this century as the railroad was in the past.”

Naturally, then, Premier Alison Redford’s visit is about as propitious as it gets. According to news reports, she will tour Irving Oil’s refinery, address the Saint John Board of Trade and say a few words to the legislative assembly. Presumably, the VIP treatment will extend to the moment she boards a plane for her return trip home.

All of which is an entirely understandable, even reasonable, way for New Brunswick’s political elite to behave. After all, steering the provincial economy to even the semblance of a safe haven is proving tougher than fracking gas from a tight play (the other illusory gem in the diadem).

Still, it’s not the 6,000 or even 10,000 jobs a pipeline would immediately generate  during the construction phase that principally matter. It‘s the degree to which the enterprise – should it come to fruition – manages to change the economic culture of the province – from one that is, too often, underachieving, unimaginative and impassive, to one that is assertive, innovative and responsive.

Historically, Atlantic Canada has measured its economic well-being by the number of mega-projects it undertakes. The Atlantic Provinces Economic Council (APEC) – arguably, the region’s leading, independent think tank on such matters – leads the news whenever it releases its annual compendium of major industrial initiatives. This week is no exception.

“It (APEC) says the 388 projects in Atlantic Canada account for a record $115 billion worth of investment, an increase of 15 per cent over 2012,” The Canadian Press reported yesterday. “In Newfoundland and Labrador, investment in major projects is up 12 per cent over the previous year, with 113 developments totalling $54 billion. Nova Scotia trails behind in investment with 156 projects worth $40 billion, an increase of 23 per cent over last year mostly due to a proposed $5-billion liquefied natural gas export facility at Goldboro. The council says the potential for a west-east oil pipeline in New Brunswick and new housing projects in P.E.I. have also contributed to the increase.

It says current-year spending on major projects in Atlantic Canada has grown by five per cent to a record $14.3 billion.”

The news source quoted APEC’s major projects director Patrick Brannon, who said in an interview, “It’s catching national attention. Certainly people are looking now to Atlantic Canada for opportunities. There’s a growing investment from foreign companies in Atlantic Canada. They see the opportunities of our commodities and our resources as a future growth area for them, and they’re focusing their funding in this region now.”

Well, yes and no. Only a few months go, APEC painted an entirely different picture of the region’s economic condition, calling it “weak” and blaming it for the persistent and pernicious deficits and debts that plague the provinces. “New Brunswick had the largest deterioration in fiscal performance in the Maritime provinces in 2012/2013 with its deficit more than doubling to $411 million,” it said in a news release. “The government is examining a number of revenue measures, such as raising its Harmonized Sales Tax (HST), introducing a health care premium or retracting previous income tax reductions in an effort to return to balance.”

This is the economic dialectic of our region: booming and busting; cycling up and cycling down; hoping and despairing.

An west-east pipeline is an enormous opportunity for New Brunswick, but only if we learn how to sustain its immediate impact durably; in a culture of novelty and innovation.

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