Category Archives: Business

Mar 23 2016
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Business, Culture, Economy, Employment

Turn the clock forward in New Brunswick

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Just as surely as light follows darkness, spring follows winter with the eternal promise of warmer, sweeter days ahead. Time marches forward tonight, as we gladly sacrifice one hour of sleep for an extra one of sunshine.

Would that everything in New Brunswick operated according to such progressive principles. Would our budgets suddenly balance? Would our young people instantly find rewarding and remunerative careers? Would our old people never again worry from the threat of imminent penury? Could we snap our fingers and make it all better?

Of course, we tend to talk ourselves into the states of mind we variously inhabit over the course of many generations. If we choose to see ourselves as feckless losers, chances are we’ll find a way to fulfill that particular prophesy. Happily, the reverse is also true.

Nowhere does this seem more eminently clear than in New Brunswick’s innovation sector. Commenting about bad economic news tends to be my stock in trade. But every so often, even I like to stray from my customary song sheet and warble about some of the good things this province is doing.

Things like the New Brunswick Innovation Foundation where you will rarely see a grim face or a downcast glance. This organization describes itself as “an independent, not-for-profit corporation that invests in new growth-oriented companies and applied research activities. With over $62 million invested, plus $348 million leveraged from other sources, NBIF has helped to create over 86 companies and fund 400 applied research projects since its inception in 2003. All of NBIF’s investment returns go back into the Foundation to be re-invested in other new startup companies and research initiatives.”

Its target industries comprise information and communications technology, energy and the environment, biosciences, aerospace and defence, biosciences, value-added food, value-added wood, and education and training. This institutional creature appears to have gotten the memo: If we want to build an innovative society, then we must. . .well, innovate.

A survey of 1,200 CEOs from around the world, conducted by PricewaterhouseCoopers not long ago, found that innovation “now outstrips all other means of expansion, including moving into new markets, mergers and acquisitions, and joint ventures and other alliances. In all, 78 per cent of CEOs surveyed believe innovation will generate ‘significant’ new revenue and cost reduction opportunities. . .But it is highest for those where technology is changing customer expectations. In both the pharmaceutical and entertainment and media sectors, for example, more than 40 per cent of CEOs believe their greatest opportunities for growth come from spawning new products and services.”

That’s certainly the case for many of the NBIF’s beneficiaries. One example serves the point. According to the organization, “Fredericton startup company Eigen Innovations got an international boost (in December), placing third in the Cisco Systems’ Global Innovation Grand Challenge at the Internet Of Things World Forum in Dubai. Eigen was the only Canadian company to make it to the final six, and as the third place winner (received) a $25,000 cash prize plus business opportunities with the network solutions giant.”

Of course, marks of innovation need not garner international recognition to be relevant to New Brunswick’s broader economy. Those businesses (and people) who innovate quietly, regularly and reliably in this province hold the keys to the economy’s future. They are worth celebrating and emulating, especially during the long winters of our fiscal and social discontent.

Now, as light follows darkness and spring follows winter with the eternal promise of warmer, sweeter days ahead, they are steadily, progressively turning all our clocks forward.

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Mar 04 2016
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Business, Economy, Energy

To frack or not to frack

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Finally, there hovers on the horizon of New Brunswick’s energy future voices of reason.

The most compelling statements contained in the final report of the province’s Commission on Hydraulic Fracturing – appointed by Premier Gallant nearly a year ago – are these:

“New Brunswick’s economy needs to transition to a new economic and environmental reality: New Brunswick needs to generate more wealth. To do this, the private sector must accelerate its transition to a value-added resources and knowledge-based economy.

“Value-added industries rely primarily on technology, productivity and skilled labour to create products and services, often from natural resources, that are sold at premium prices. Energy can play a key role in getting us there, but only if we change how we think about it.

“New Brunswickers need to regard energy investments as part of the larger advanced technology story rather than simply as a commodity as we have done in the past. This will stimulate greater investment in energy technologies, particularly those that can help us transition to a more affordable, cleaner energy future. . . To meet existing regional and national climate change goals New Brunswick residents, businesses and governments will need to change the way we produce and consume energy.

“The Commission heard from individuals, companies and governments that are either ready to begin this transition to a low carbon society or want to accelerate what is already underway. Determining the role of natural gas in New Brunswick’s current and future energy mix is an important part of this conversation.”

Exactly, and I couldn’t have stated the case better.

We have to stop thinking about fossil fuels as cheap, seemingly endless resources we burn in our cars, homes, businesses, and industries for heat and light. Rather, we must begin to deploy them as means to a clean-energy future – the feedstock that powers new manufacturing technologies and processes, which ensure that environmentally neutral alternatives actually gain footholds in the commercial and popular imagination of this country, this region, these hometowns.

In this sense, in this respect, the Commission’s report is a rare call to action for a government-appointed body. It infers from the consultations it has conducted that most people are ready for productive, progressive change; it implies that only political and bureaucratic laziness is stopping what clearly should be the most important technological transformation since the western world’s Industrial Revolution.

It’s not alone. Robert Arthur Stayton, a university and college teacher and solar-energy advocate based in California recently blogged, “Is it a contradiction to burn fossil fuels to build renewable energy? The transition to a solar-based economy will require expending a great deal of energy to build solar and wind energy systems. Because our current energy systems are largely based on fossil fuels, this effort will add significant new usage of fossil fuels, and thereby increase our carbon emissions. Opponents of solar use this fact to say that we should not pursue renewable energy because that makes the climate problem worse. They have it exactly backwards.”

Instead, he contends, “Non-renewable fossil fuels should be considered as our means of getting to a sustainable renewable energy system. The finite cache of fossil fuels is our one shot for getting to an energy system that is essentially infinite in time (if maintained). Every kilowatt-hour expended building solar and wind equipment will yield many kilowatt-hours of clean energy over time. We should consider that to be the highest use of fossil fuel. . because it moves us toward our goal of a sustainable and clean energy system.”

Finally, voices of reason may prevail.

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Feb 19 2016
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Business, Economy, Government

Between ‘The Rock’ and a hard place

Newfoundland's debt is as immoveable as a neolithic obelisk

Newfoundland’s debt is as immoveable as a neolithic obelisk

For an object lesson on the capricious nature of economic dependence on fossil fuels, we need not cast our weary eyes westward to Alberta. We need only scan the eastern horizon to where Newfoundland and Labrador hover into pale view.

Not long ago, we may recall, this province was Canada’s miracle child – for decades, a perpetually slow learner that, seemingly overnight, became the highest achiever in the land.

Oil and gas reserves were plentiful (they still are) and commodity prices went through the roof. The province of fish and cut bait was reborn as the proverbial one of milk and honey. Public coffers were full to brimming with billions of bucks. Incomes in St. John’s soared, as did house prices. Road works and other infrastructure projects dotted the craggy landscape.

Then, a funny thing happened on the way to the Big Rock Candy Mountain: The bottom fell out. A reckoning was nigh. In fact, it’s right about now.

According to a recent report by the Fraser Institute, a private think tank based in the West, writing about the newly benighted East, “Newfoundland and Labrador’s provincial finances are in a dire state. The government’s latest projections have the province facing a nearly $2 billion operating deficit, equivalent to almost a third of its total annual revenue. After adjusting for the size of its economy and population, Newfoundland and Labrador will have by the far the largest deficit among the provinces in 2015/16.”

Indeed, says the Institute, “It gets worse. The government currently projects deficits averaging approximately $2 billion from now until 2020/21. Meanwhile, provincial net debt (a measure that adjusts for financial assets) is set to almost triple in nominal terms from the recent low of $7.8 billion in 2011/12 to $22.9 billion in 2020/21.”

What’s the cause? It’s simple: Overspending based on rosy projections about a singularly fickle industry.

Says Fraser’s researchers: “A popular narrative holds that falling revenues are to blame, particularly as the energy sector and consequent government revenues have been hit by depressed commodity prices. And there is no doubt revenues have taken a big hit in recent years, declining by 31 per cent since 2011/2012 and placing considerable pressure on government finances.      “Nevertheless, the view that declining revenues alone are responsible for the province’s fiscal problems ignores the important role that provincial spending growth has played in creating the crisis.

“Government spending in Newfoundland and Labrador took off after 2004/05, coinciding with the commodity boom when energy prices and development began to rise. Subsequently, the provincial government continued to aggressively increase spending as revenues quickly poured into the provincial coffers. In fact, program spending is now almost 80 per cent higher in nominal terms than in 2004/05. From 2005/06 to 2011/12, the government increased program spending by a whopping 8.4 per cent each year on average – much faster than the rate needed to keep pace with increasing overall.”

All of which may only prove that governments, when faced with a windfall of found money, are loath to replenish their “rainy day” funds in favour of spending like sailors on shore leave.

In any case, by comparison, New Brunswick’s rather ill fiscal condition looks almost robust. After all, with a population about the size of Newfoundland and Labrador’s, our $400-million deficit and $13-billion debt seems almost manageable.

Still, it only seems this way. Unless we begin to diversify and innovate, own resource-based, commodity-dependent economy will surely find itself in the circumstances those of our brethren to the northeast now face:

Between a rock and a hard place.

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Feb 12 2016
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Business, Economy, Wealth

Circling the jobs drain

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It’s not hard to understand why politicians vying for elected office routinely proclaim the number of people they intend to put back to work, if only the great unwashed would be so kind as to hand over the keys to the garden.

After all, job creation is the lowest-hanging fruit on the vine of campaign promises.

Who, among us, doesn’t understand the importance of a fully employed, adult citizenry? More to the prosaic point, who doesn’t want steady, reliable work for himself? And who isn’t, at least once, willing to swallow whatever sweet and succulent promise a politician offers, especially if it has to do with one’s livelihood.

Still, the problem with low-hanging fruit is that, all too often, it’s past its ‘best before’ date.

New Brunswickers witnessed this during former Progressive Conservative Premier David Alward’s term in office, in which he promised to create jobs across the broad spectrum of the provincial economy, only to preside over losses approaching 4,500.

Now, perhaps, we prepare ourselves for a repeat performance by the Liberal government of Brian Gallant (different party, same story), which, according to its own Department of Finance, appears fated to watch the provincial labour market shed hundreds, perhaps even thousands, more by 2018.

The reasons are pretty straightforward, and can apply to any government in this age of perennially straitened circumstances, regardless of ideological stripe and partisan palaver.

According to the Economic Outlook 2016-2017, which accompanied the most recent New Brunswick budget, “Weaker growth at the national and global levels, challenges in the export and manufacturing sectors, slower-than-expected growth in investment and continued weakness in the labour market contributed to subdued growth in 2015. . .Real economic growth of 1.3 per cent in 2015 (is estimated), down from 1.8 per cent projected at budget last year. This estimate is consistent with the latest consensus among private sector forecasters.”

On the other hand, “Economic activity is expected to be tempered by demographic realities, private sector investment, fiscal measures and the recently announced suspension of operations at the Picadilly mine. Private sector forecasts may not reflect the latter development, which will put downward pressure on their projections.”

In fact, “Growth conditions will be further limited by PotashCorp’s announcement that it was indefinitely suspending operations at the Picadilly mine. The economic impact will be partially mitigated in the short-term by transitional measures being offered by the company. However, the effect of the suspension will continue to be felt well into 2017.”

Add to this boiling cauldron of trouble New Brunswick’s rapidly aging population and low birth rate and you have the perfect recipe for moribund economic conditions and, at best, stagnant job prospects. Or, as the finance department’s report observes, “Looking ahead to 2017, external demand and further government capital spending will drive economic activity. However, an aging workforce, overall population decline and weak private sector investment will curb growth.”

Naturally, all this translates into job losses, not growth.

Indeed, evidence of deep-rooted rot in the province’s economic garden has been extant for several years. And, except for specifically dunderheaded moves by certain elected officials, none of it is actually any individual’s or even government’s fault.

It’s a product of decades of short-sighted policy, calcified programming, and uncompetitive and complacent private-sector players. And, don’t underestimate the effects of rolling, increasingly deep recessions on resource-based, export-oriented jurisdictions, such as New Brunswick’s.

Despite their proclamations, politicians don’t create employment in the private economy.

But when they fail to deliver the fruits of their campaign promises – jobs – perhaps it’s only right that they should lose their own.

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Jan 27 2016
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Business, Economy

New Brunswick’s Picadilly’s circus

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It came, it saw, it conquered; and now it leaves with practically no notice, but with some apologies.

Mark Fracchia told a packed news conference in Fredericton last week that he was utterly bereft: “This is just a very sad day for all of us. Most of all to the people who have given us so many years of loyal service, for the community of Sussex, for the province generally and certainly for all of us at PotashCorp.”

Mr. Fracchia, the honcho of the Saskatchewan resource company’s New Brunswick operations, was subdued as he announced the indefinite suspension of the conglomerate’s Sussex-based Picadilly facility built scant years ago at a cost of $2 billion.

Of course, the bottom line spins a slightly different tale: Through this move, the international conglomerate saves $50 million this year and as much as $135 million the following in capital spending, according to a CBC report.

Meanwhile, 430 people in rural New Brunswick lose the salaries they once used to pay for food, rent, mortgages, and their kids’ education.

Care to wager who, in this particular situation, is more devastated?

To be sure, PotashCorp. is promising to relocate at least 100 of these disenfranchised workers out west to work in its Elysian Fields. (Gee, folks, just what we need in a province that exports its talent as readily as it does its lobster). And, Mr. Fracchia, does appear genuine when he declares, “We had high hopes for Picadilly and my heart goes out to all the people who have worked so very hard for so long.”

Still, the rotten-egg-stench surrounding this full-scale route is as malodourous as it is familiar in this neck of the southern tundra.

To begin with, why weren’t people who worked for the company and live in the surrounding communities informed of its intentions? Local political representatives said that they were, in effect, gob-smacked by last week’s announcement.

But were provincial government officials also astonished by the pull-out of such an important employer at a time when they were assiduously pursuing their elected bosses’ agenda to build 5,000 new jobs in the province?

How likely is it that none of this reached the highest levels of political attention at cabinet well before the Christmas break?

Then, there are the stated reasons for the move, some of which simply don’t pass any sort of smell test. According to the CBC, Mr. Fracchia insisted “the New Brunswick (Picadilly) mine was the most expensive of its operations because of the geology in the province.” He also said “the decision had more to do with global market forces and (that) there was little the provincial government could have done to help the corporation.”

If this quote is accurate, then the obvious question is: Which is it?

Is the problem related to the “geology” of the province? In that case, why did a supremely successfully exploration and development company, with worldwide operations and the best scientific and engineering advice available to it at the drop of an email, throw two billion bucks into what, it must have known, years ago, would eventually become a losing proposition?

Or is the problem a function of “global market forces” – that is, low commodity prices, which are afflicting almost all resource-extraction industries? Again, though, companies of PotashCorp’s size, reach and sophistication know when to, in effect, hold ‘em and when to fold ‘em.

Was the unavailability of shale gas in New Brunswick a factor?

Gosh, does the sun rise in the east?

Or does it merely set with no notice, but merely apologies?

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Jan 27 2016
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Business, Culture, Government, Society

Where the barrel hits the road

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We New Brunswickers are enormously adept at imagining the worst possible future for ourselves.

And why not?

After all, we endure among the most deleterious financial predicaments in the nation (a $500-million annual deficit on a long-term debt approaching $13 billion in a province that supports barely 750,000 souls).

Our economy teeters between states of mere sustainability and outright failure, especially outside the small cities that do manage to keep the overall employment rate at a steady, if still shameful, 8.9 per cent.

Meanwhile, our poverty rates are rising; our income inequality gap is widening; our energetic, educated children continue to leave in droves, though, likely, not to Alberta, any longer.

Our entrepreneurial start-ups are suffering; our fiscal relationship with the federal government hangs in limbo; oil prices are down; food prices are up; and everywhere malaise hangs like a funk over the body politic, whose members believe that almost nothing issuing from the mouths of provincial and federal politicians is even remotely trustworthy, let alone hopeful.

Granted.

But, what if, for one glittering moment, we imagined the best possible future for ourselves? Again, why not? What, exactly, do we have to lose?

Only this: our shopworn certainty in the specious value of whining constantly about how others, elsewhere in Canada, have calumniously wrecked our various lots in life.

Imagine, for a moment, a small province of a vast nation that, overnight, stops grieving over past sleights and starts examining the ways and means, within its own borders, through which it may become a world-beating center of excellence for the founts, modes and foundations of durable enterprise.

How, indeed, would that future appear?

It might begin with a full-court social compact on the crucial importance of early childhood education, universally accessible across New Brunswick and fully integrated into the public school system. The objectives would be nothing less than full literacy in both English and French languages, regardless of family resources and geographic location.

Paying for this might involve nothing more than identifying underused bricks and mortar in individual communities at which to install highly skilled teachers and cutting-edge pedagogical techniques and technologies.

At this point, do we actually need to build new schools?

A superbly literate student body matriculating into any one of New Brunswick’s magnificent institutes of higher education might then find any avenue of opportunity on which to travel. Imbued with the benefits that first-class language studies purchases for critical thinking, this province’s youth would find more opportunities than challenges: In business, marketing, global finance, engineering, the arts, and sciences.

If, then, New Brunswick’s universities convened, in the most collegial ways, their administrative characters and charters to establish a joint bureau of educational innovation that dismantled barriers to student mobility between institutions, the likelihood of retaining brain power in this part of the country would rise precipitously, if only because the labour pool of intelligent, educated, breathlessly hungry young people would remain focused on the lands and coasts and towns and cities from which they came.

Imagine that, for a moment.

Imagine the best possible future for New Brunswick: An incubator of ideas; a center of private and venture capital to commercialize those ideas; a durable and long-term vector, thanks to our innovation, for compellingly reducing the province’s deficit and debt; the ways and means to build our future without regard for the past that has, for far too long, persuaded us that we can’t, and won’t, do much about our chances in the great, grey world.

Imagine, for once, that we are enormously adept at hope.

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Jan 27 2016
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Business, Democracy, Energy, Oil and Gas, Politics

Running on empty in New Brunswick

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We become what we think we are.

If we believe that we are weak, uneducated and profligate, the chances that we will lie down, refuse to crack a book, and spend whatever money the state sends us to load up on Kraft Dinner and past Christmases’ chocolate treats rise precipitously.

If, on the other hand, we are convinced that we are strong, innovative and prudent, the odds of our crafting a real future for our neighbours and ourselves – one we build with reason, critical thinking, social deliberation, and daily service – improve significantly.

New Brunswick sits uncomfortably somewhere between those two poles of conscience.

On the one hand, in this province we are gorgeously engaged, generous and rational. On the other, we are thicker than a sack of hammers at the bottom of the Petitcodiac River.

We, for example, continue to muck and moil over the possibilities of a shale gas industry in this province even though we know that market forces, combined with our own government’s foot-dragging, have effectively shut the door on that avenue of commercial enterprise.

With the price of Texas crude spluttering just below $32 a barrel, the entire oil and gas industry in Canada is in suspended animation (if not actual free-fall). Now, there is almost no point in imagining a future in which we control the uses to which we put our indigenous fossil fuels (if we ever have).

Still, as Adam Huras of the Saint John Telegraph-Journal reported earlier this month, New Brunswick Energy Minister Donald Arseneault thinks “the 12-year lows facing natural gas prices could buy the province more time to get the industry right – that’s of course if the province decides to go in that direction.”

Says Mr. Arseneault: “In terms of lifting – or not – the moratorium (on shale gas development), even if there is down time, it gives people more time to get better educated with the issues. . .and it will give government more time to review the report submitted to us by no later than March 31.”

He refers, specifically, to the research his department has commissioned from a three-person panel on the environmental, social and economic efficacy of hydraulic fracturing in the province. The question now becomes: Is he kidding?

He’s right in one sense. What, exactly, is the rush? Given the industry’s pricing structures these days, we have all the time in the world to, effectively, decide not to decide, which is, after all, what this provincial government has desperately desired for this fractious issue since the beginning of its mandate.

Again, we become what we think we are. If we believe that we are, by nature, cautious and conservative, then we will rejoice in every opportunity that removes risk from the process of democratic decision-making.

Sure, let’s take this whole shale-gas thing and give it a good look-see. It’s not as if the issue matters much these days. The market has bottomed out; exploration companies are no longer testing, drilling or producing; and as for public debate, well, all is quiet on the eastern front of environmental protest.

Still, what if we applied that standard to every other challenge the province faces?

Should “wait-and-see” become the new motto we teach our children as we ask them to find their personal and professional bliss elsewhere in Canada or the world?

Should we “be” in this place or merely sleep in it?

Are we timorous or bold and forthcoming?

It’s a decision we choose for ourselves, and it always has been.

In the end, we become what we think we are.

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Jan 26 2016
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Business, Economy, Government, Politics

Debt does not become us

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Is New Brunswick officially a black hole?

In cosmology, the phenomenon generally refers to a gravity well that’s so dense, so impenetrable that not even photons escape its event horizon.

Here’s what Canada’s national debt clock says about our particular partner in Confederation: $12.8 billion in arrears to domestic and international creditors, which translates into more than $17,000 for every man, woman and child in New Brunswick. (Add that to your mortgages John and Jane Doe if, that is, you’re lucky enough to have them).

The right-leaning Fraser Institute likes to portray this province as one of Canada’s weaker sisters. I, in turn, like to portray the Fraser Institute as a bunch of fatuous blowhards. But, alas, not this time. This time, they appear to be right on the money, which they keep in their big, fat billfolds.

Still, consider their latest analysis: “The growth in government debt over the past eight years reversed a positive trend from the mid-1990s to late-2000s when Canada’s federal and provincial governments made considerable progress in reducing their debt burdens. After a period of debt reduction, combined federal and provincial debt reached a low of $833.8 billion in 2007/08.

“However, the economic recession in 2008/09, combined with the significant increases in government spending that took place in 2009/10, meant that every government fell into deficit in either 2008/09 or 2009/10. This started Canada’s governments down their current path of persistent deficits and growing debt. The trend has largely persisted since then and will likely continue in 2015/16 through the upcoming round of federal and provincial budgets.

“Total debt in 2015/16 is estimated to be just shy of $1.3 trillion. This growth in combined federal and provincial debt has not been limited to just a few jurisdictions. The federal and every provincial government increased their debt levels between 2007/08 and 2015/16.”

In New Brunswick, for example, the provincial government now pays $685 million a year to service its long-term debt. That’s money that does not go to improve and expand health care, public education, city streets, and cultural venues. It’s a giant’s share of a shrinking pie that does not feed the poor, educate the illiterate, invest in private-sector innovation, bolster entrepreneurial diversity, or keep our universities and colleges vibrant, relevant places where our children might purchase a real sense of hope in this region.

In fact, we’ve all been circling the drain for some time in this province. So have Nova Scotia, Newfoundland and Labrador, and Prince Edward Island. We’ve all been living on borrowed time and money. It’s merely a cold comfort to be reminded that so has the rest of the country.

“Canadian governments (including local governments) collectively spent an estimated $60.8 billion on interest payments in 2014/15,” the Fraser Institute’s analysis concludes. “That works out to 8.1 per cent of their total revenue that year. To put the amount spent on interest payments in perspective, it is more than what is spent on pension benefits through the Canada and Quebec Pension Plans ($50.9 billion), and approximately equal to Canada’s total public spending on primary and secondary education ($62.2 billion, as of 2012/13, the last year for which we have finalized data).”

Ouch, indeed!

Of course, New Brunswick has a way out of this black hole, this gravity well. Embrace, for once, the idea of community. Reject the partisan bickering that keeps good notions on the lonely blueprints of policy wonks.

Recognize that New Brunswick must prepare for a new event horizon, where imagination escapes pessimism at the speed of optimism every time.

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Jan 26 2016
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Business

Innovation in NB is alive and well

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Daily journalism can be a truly Oz-like experience for those who travel down the yellow-brick road only to pull back the curtain and find utterly confused, old codgers pulling the levers that keep our steam-punked imaginations firing on contradictory versions of reality.

A case in point emerged recently in the pages of Canada’s self-anointed national newspaper, the Globe and Mail. On the one hand, noted columnist Barrie McKenna insisted that the nation’s innovation agenda is a complete disaster; on the other, labour economist Jim Stanford declared that value-added manufactured exports (which rely on innovation) from here are enjoying a late-season renaissance.

Says Mr. McKenna: “Every two years, the federally appointed Science, Technology and Innovation Council issues a status report on how Canada is doing in the global innovation race. The council has now produced four such reports, the latest released this fall. And each time, it’s the same distressing finding: Canada’s business sector is not stepping up to the plate. Companies are investing less now in research and development than they were in 2007, and every year they’re falling further behind the countries that lead the world in generating great ideas and economic growth.”

Then, there’s this from Mr. Stanford in his own Globe commentary: “There is growing evidence that the national economy is starting to pivot away from its past over-reliance on the extraction and export of raw natural resources. Instead, Canada’s high-technology industrial base is starting to flex its muscles once again. And the first place this economic reorientation is becoming visible is in recent data on international trade.”

He continues: “Statistics Canada defines five broad categories of ‘value-added’ merchandise exports – industries that rely primarily on technology, productivity and skilled labour, instead of just the availability of natural resources. These sectors include industrial machinery, electrical and electronic products, motor vehicles and parts, consumer goods, and aircraft and other transportation equipment. These technology-intensive products typically command premium prices on global markets, in contrast to depressed commodity prices.”

Of course, these pundits are both right and wrong in their own special ways, and the only question reading both of them raises is: Whose version of the world do you want to believe?

If I were forced to choose between the doom and gloom of Mr. McKenna and the hope and sun of Mr. Stanford, I would, with no reluctance at all, select door No. 2. Here’s why.

One of the very few economic bright spots in New Brunswick these days is home grown innovation. Given the province’s fiscal woes and perennial lack of financial resources, that seems like a paradox worthy of economic pundits. Nevertheless, it appears to be durable.

The New Brunswick Innovation Foundation reported last month, for example, that Eigen Innovations, a Fredericton-based start-up “got an international boost placing third in the Cisco Systems’ Global Innovation Grand Challenge at the Internet Of Things World Forum in Dubai. Eigen was the only Canadian company to make it to the final six, and as the third place winner will receive a $25,000 cash prize plus business opportunities with the network solutions giant.”

The company’s main product “tells operators and engineers the where, when and how processes or product quality is starting to degrade within highly complex manufacturing systems. . . .After a series of elimination rounds, Eigen made it onto the list of 15 semi-finalists, announced in October 2015.”

Sadly, daily journalism too often fails to capture the stories of these jewels of hope and opportunity. We’d do better to pull back the curtain and discover the utterly brilliant among us.

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Dec 02 2015
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Business, Economy, Government, Politics

Don’t fear the reaper

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Sooner or later, the horseman with the scythe was always coming to New Brunswick, brandishing his blade to cut down the high and low among us. Still, who knew he would materialize in the form of a 33-year-old lawyer-cum-politician from a Sleepy Hollow known as Shediac Bridge?

Premier Brian Gallant, and his operatives in government, are deadly serious about reducing the province’s annual spending load by $600 million, hoping, in turn, to replenish the public accounts and avoid structural bankruptcy before bond-holders on Wall and Bay Streets get wise to the fact that we haven’t known, for years, what we’ve been doing (economically and fiscally, at least) to Canada’s picture-perfect province.

We know now; and it boils down to this: With a $600-million deficit, a $12-billion debt, a population tipping 750,000 on a good day, and an out-migration rate that rivals historical exoduses in almost biblical terms, we simply can’t afford ourselves. Under these circumstances, who could?

Of course, we may know this, deep in our East Coast bones, but do we accept the consequences of our perennial profligacy? Do we actually “get” the fact that we are the authors of our own misfortune? After all, to paraphrase the inimitable Bob Dylan, the hour is late and all along the watchtower, princes keep the view. . .Outside in the distance a wildcat does growl. Two riders are approaching, and the wind begins to howl.

That’s winter for you in southeastern New Brunswick; but one of the riders who now visits us is an all-season, equal-opportunity reaper and nothing, it seems, will distract him from his appointed rounds.

Here’s the latest on the issue from the editorial desk of the CBC last week:

“The New Brunswick government is proposing a long list of cuts, measures to boost revenue and ways to overhaul the delivery of government services to eliminate the province’s $600-million structural deficit. Health Minister Victor Boudreau, the minister responsible for the strategic program review, announced the report at a news conference on Friday.”

Specifically, the minister said, “We want to provide for more opportunity for New Brunswickers to comment on the report. But it is not necessary (to conduct)another round of public consultation, like I did before.”

That’s code for: “Yeah, we’ve talked to New Brunswickers till we’ve gone blue in the face; so, dear citizens, deploy the public porto-potty of open opinion, or. . .well, vacate the pot forthwith.”

Here’s what’s heading towards the political abattoir over the next few months: The idea that drivers get to ride the roads in this province for free (some form of tolls for casual and industrial wheel-men and women are practically inevitable); the notion that smokers and drinkers will be saved from another hike in the cost of their so-called vices (of course, we’d quit, if we didn’t understand how valuable our shekels are to the provincial economy); and the long-standing, utterly absurd protest against a prudent hike in the Harmonized Sales Tax.

As for this last measure, a two per cent increase (from 13 to 15 per cent), accompanied by reasonable exemptions for low-income New Brunswickers, would generate an additional $250-million a year for this province.

Regardless, the horseman comes, brandishing the tools of his trade.

Now, it remains for us to duck his scythe by building the innovative, inventive, productive private sector that will prevent us from ever again laying down our heads on the chopping blocks of economic necessity. 

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