Category Archives: Economy

Aug 29 2015
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Arts, Business, Economy

The downtown party starts

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Just because Greater Moncton, after years of hand-wringing and teeth-gnashing, has finally awarded itself a modest sports and entertainment complex in the western heart of the city, doesn’t mean the controversies have concluded.

In fact, in all the most significant ways, they’ve only just begun.

Exactly what sort of a facility will (should) this be? Has the community had a proper chance to review the planning options? What will transform the venue from an expensive hockey arena into a vibrant cultural space and back again. Indeed, how will the various clients and tenants shake hands to benefit all? And what, pray tell, is the deal with parking?

It may be a certain comfort to know that almost no capital project of this type or size at a downtown location in a metropolitan area of Canada (actually, anywhere) has ever proceeded without also generating a riot of objection and opprobrium. That is the nature of this particular beast.

Many reviled Maple Leaf Gardens in the heart of Toronto’s financial district as a monstrosity when it flung open its doors in the early 20th century. Yet, here’s what the Historic Sites and Monuments Board of Canada wrote about it in 2006 upon its designation as a National Historic Site: “One of the most renowned ‘shrines’ in the history of hockey. . .the largest arena in the country when it was built, it was one of the country’s foremost venues for large-scale sporting events such as boxing matches and track meets, and non-sporting events such as concerts, rallies and political gatherings, religious services and opera. . .the Gardens holds a special place in the country’s popular culture: here Canadians welcomed a wide range of cultural icons from the Beatles to the Metropolitan Opera, from Tim Buck to Team Canada vs. the Soviets, from Winston Churchill to the Muhammad Ali-George Chuvalo fight.”

All of which suggests that the birth pangs and growing pains associated with integrating a brand, new cultural edifice into a community that maintains, at best, an ambivalent relationship with its downtown core will eventually subside. But not without effort, and not without a broad appreciation for the hard-won successes other cities have somehow managed to manufacture.

Consider, as examples, the two Londons – the original and its Canadian namesake. The former is home to the redoubtable Southbank Centre; the latter hosts the less expansive Budweiser Gardens.

Established in 1951, Southbank Centre has evolved by effectively engaging the neighbourhoods that surround it. Today, it boasts three main buildings – Royal Festival Hall, Queen Elizabeth Hall and Hayward

Budweiser Gardens, on the other hand, better resembles in both form and function, the as yet unbuilt and unnamed Moncton facility. Again, according to Wikipedia, the sports and entertainment facility opened in 2002 as the new downtown home of London’s Ontario Hockey League team, the London Knights. Significantly, though, over the years it has also become an important venue for other worthy distractions: “Budweiser Gardens was launched as a concert venue with Cher’s ‘Living Proof: The Farewell Tour’ in 2002. In 2007, Meat Loaf’s ‘3 Bats Live’ DVD from the ‘Seize The Night’ tour was recorded here. Cirque du Soleil chose Budweiser Gardens to stage its first-ever arena show, a rebuilt production of Saltimbanco.

Sting performed during his Symphonicities Tour on July 21, 2010, along with the Royal Philharmonic Orchestra. In 2010, Budweiser Gardens was awarded as the Canadian Venue of the Year at the Canadian Music and Broadcast Industry Awards.”

For Moncton, the controversies will surely continue. Eventually, though, we, like other cities, will get our downtown centre right.

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Aug 29 2015
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Business, Democracy, Economy, Government, Politics

This bromance might backfire

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He’s young, fit, energetic and, more importantly, telegenic. He has a smile that could set 1,000 campaign managers’ hearts a flutter. And that hair – don’t get me started on that hair.

If I didn’t know better, I’d swear that the Grit Premier of New Brunswick, the unstoppable, unflappable Brian Gallant (who considers the environs of Greater Moncton his natural hunting ground for Ottawa-fed Tories) is preparing to wage electoral battle this fall.

In fact he is – just not his own.

It is, of course, customary – nay, expected – for the premier of this province to support in every rhetorical way possible the principals, priorities and plans of his federal counterparts heading, as we presently are, into a general election. After all, what good is the rapport Mr. Gallant evidently enjoys with Liberal Party of Canada Leader Justin Trudeau, if he can’t splash it onto the front pages of local newspapers?

Still, the premier’s buddy routine comes perilously close to crossing the line he, himself, drew a month ago when he insisted he would not campaign (officially, at any rate) for Mr. Trudeau, but would, instead, meet with any federal leader who wanted to discuss issues critical to the province’s future, including the so-called “fiscal imbalance”.

Only last week, however, a far less circumspect-sounding Mr. Gallant delivered a politically charged tirade that could have been ripped from Mr. Trudeau’s own choir book.

“We have a Canadian economy that’s going in the wrong direction,” he thundered. “The current federal government has a bad plan for the Canadian economy, and we’ve seen that not only New Brunswick, but in many provinces across the country and, in fact, I would argue, in all of them. Some of them have had slight growth, but it’s been minimal.”

What’s more, Mr. Gallant continued, “We are in (a) recession and the current federal government refuses to change its strategy and plan. I would imagine it was because there was a 78-day federal election campaign coming.”

If nothing else, the outburst underscores the dangers of a political bromance between Messrs. Gallant and Trudeau that’s grown just a tad too fond for its own good.

Imagine, for a moment, the tone and temper of a conversation about fiscal imbalance today if the federal leader sitting across the table from Mr. Gallant happened to be Prime Minister Stephen Harper who, rumour has it, does plan to pop in to New Brunswick sometime before Election Day.

Naturally, none of this would be problematic if Mr. Trudeau’s fortunes at the ballot box were secure. They’re not.

Ottawa pollsters reckon the campaign is a virtual dead heat, with the NDP’s Thomas Mulcair slightly ahead of Mr. Harper in popularity. The young Liberal leader’s outlook is decidedly downcast and has been for weeks. Where once he enjoyed a 42 per cent approval rating, he now endures one in the range of 24 per cent.

Even here in the Maritimes, where the federal Liberals could once count on a majority of support, the NDP have gained ground. The two parties are virtually tied for public approval in New Brunswick.

Beyond any of this, though, the window dressings and pomp of campaigns only emphasize the real challenges Mr. Gallant doesn’t appear to be tackling in New Brunswick, the ones that are far closer to home and heart than a red tide in Ottawa: rising unemployment, deepening public debt and no convincing plan to stimulate economic revival and diversification.

The premier would do best to apply his inestimable energy to the issues that outlast even this, the longest of election campaigns

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Aug 13 2015
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Economy, Municipal Affairs

Will Moncton’s downtown dreams come true?

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The hole in the heart of this fair city is about to be filled. The question is: with what?

That 11-acre scar between Highfield and Cameron Streets along great Main now stands as a testament to either a promise fulfilled or a promise broken.

It is, in fact, astonishing how inured we can become to ugliness, lassitude and dereliction. Harder still to calculate are the imaginings of civic pride in the absence of something to behold: a structure to regard, an edifice of iron, concrete and glass to observe.

Still, that will be for later.

For now, Moncton City Council has voted (8-3) to dream and to dream big. Barring acts of God, Parliament and the winds of economic fortune, a multi-use sports and entertainment facility will rise in the urban centre sometime within the next three years.

This has been a long time coming – at least seven years, and likely more. That’s nearly a decade of studies, economic impact analyses, debates, arguments, public consultations, and more debates.

It is only human nature that makes us cool, over time, to something we once burned to have when we were younger, braver and less complacent. And so we now witness a sizeable chunk of Metro Moncton’s populace wondering whether any of this was worth the wait.

It’s a fair question. After all, what does $100-million buy these days?

Will the final product be a fancy, extraordinarily expensive hockey arena? Or will it be a true cultural space, where sporting events shake hands with ballet companies, theatrical tours and musical concerts?

Will it be a monolithic, concrete gulag that incarcerates its patrons with foggy front doors, rotten fast food, and more parking space than anyone has a right to expect in a city that’s less than half the size of Oshawa, Ontario?

Or will it be an elegant, nuanced commons for athletes, artists, performers, and prestidigitators of all stripes and fashions? Will it be a place to gather and ruminate and appreciate just how marvellous civic life in the public square can be when thought transforms both the form and function of everyday life into art and sport and, finally, durable memory.

Imagine walking downtown, years from now, in a blizzard and finding, instead of an empty lot, a place to warm your ears as the convivial roar of a practice hockey game fills an arena while a final, public dress rehearsal of the Atlantic Ballet Company concludes to stupendous applause.

This thing we’ve conjured over the years – this mythical centre, now made manifest – is less a state of bricks and mortar than it is a state of mind. It becomes anything we choose; anything we want to make of it.

The economic effects of a facility like this are, frankly, inarguable. Managed intelligently, it will pay for itself within 15 years of its door opening. After that, it will return millions of dollars in tax revenues to the metropolitan area, year after year, generating untold direct and indirect economic benefits.

But more than this, far more than this, it will anchor a beautiful little city’s spirit to itself. It will mend the tear in the fabric of a community that should never have considered its downtown area – where 18,000 office workers ply their trades and skills and, in high season, 50,000 tourists gambol for fun and profit – irrelevant, a vast parking lot, a hole that can’t be filled.

Then again, what sort of facility will we erect to repudiate this claim? What is the promise?

And will it be broken?

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Aug 13 2015
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Economy, Municipal Affairs

No summer recess for Moncton

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The happiest communities in the Maritimes, it’s fair to say, are those that routinely make their own luck when misfortune grumbles like a storm cloud on the horizon.

Greater Moncton has always demonstrated a special proclivity for resilience, if not outright reinvention, in the face of uncertainty. This summer proves the rule again.

Economists are by no means unanimous in their opinions about the condition of the Canadian economy. Some state firmly that the nation is in a technical, if mild, recession. Others say, “pish-tosh, let’s stop scaring our fellow citizens, lest we talk ourselves into a real downturn.”

Into the sky-is-almost-falling camp parachutes Randall Bartlett, a senior economist at TD bank. “Looking further ahead, the yawning output gap in Canada due to the weak economic performance in 2015 has also pushed back our expectations for any future hiking cycle,” he observed in a note to investors last month.

Joining the hold-your-horses gang earlier this week was Steve Ambler, a professor at the University of Quebec at Montreal’s management school and the David Dodge chair in monetary policy at the C.D. Howe Institute, and Jeremy Kronick, a senior policy analyst at the Institute.

In a newspaper commentary, they wrote, “After a 4-per-cent fall in export volumes over the first five months of 2015, Canada’s sales to foreigners came roaring back, with a 4.8-per-cent increase in June alone. Imports also decreased in volume by 0.9 per cent from May to June.”

But even if the country manages to skirt the abyss without losing all traction, a general malaise descends upon the land practically everywhere.

Still, practically everywhere doesn’t actually mean here.

Early indications are that tourism in southeastern New Brunswick, especially Greater Moncton, is more robust this year than in any other in almost a decade. You can see the evidence in the diversity of license plates, voices and faces on the bustling, downtown streets.

Meanwhile, the tri-city area is enjoying (if that is best word) one of the busiest private and municipal construction seasons in many years. To get anywhere by car these days is a bit like playing a game of steeplechase.

Of course, one could argue that these happy developments have less to do with Greater Moncton’s special talent for driving its own civic agenda and more to do with circumstances beyond its control (the same principle behind recessions, but with more efficacious results).

After all, the surging tourism trade owes as much to the anaemic condition of the Canadian dollar, which makes local amenities immensely desirable to comparatively rich Americans, as it does to our friendly service with a smile.

And if the tri-city area is in the thick of a building fever, look no farther than the federal government ­– whose pre-election purse strings have become, not surprisingly, loose over the past few week – for a likely reason.

Still, neither of these arguments explains why the tourists keep coming back to this location or even, for that matter, why city works officials are perfectly happy clogging most major arteries at peak times of the day if it means squeezing every last dime for infrastructure before the pot finally runs dry.

It’s called initiative, and it comes in all shapes and sizes in Greater Moncton regardless – or, perhaps, because of – unearned adversity.

At this writing, Moncton City Council was deciding the fate of a new downtown event centre, a facility that would almost certainly inject new life and economic opportunity into the community.

Let us hope that city fathers and mothers are, once again, choosing to make their own luck.

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Aug 06 2015
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Climate, Economy, Energy, Government

Mum’s the word on climate change

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Whole election campaigns have been sacrificed on the altar of global warming. Entire political careers have been cremated under the magnifying glass of climate change. Remember poor Stephane Dion?

Is it any wonder, then, why this year’s contenders for the democratic throne of Canada are treading gingerly around the subject?

Well, for the most part.

NDP Leader Thomas Mulcair had a moment earlier this month when he told a Hamilton radio talk-show host that the federal government’s inaction on climate change is tantamount to wartime isolationism.

“Whenever we’ve taken on these big fights internationally, we were always one of the smaller players,” he said.

“But it didn’t mean that we didn’t go in. In the Second World War, the same argument could have been made. ‘Oh, we only represent a couple of per cent of the forces.’ But we knew that we had a job to do. This is a battle that the world has to take on. Climate change is real. Reducing greenhouse gases has to be made a priority. It can be done. Mr. Harper doesn’t believe in the science of climate change, so he’s not doing anything.”

In reality, what the current prime minister has never done much of is talk about global warming. That’s been both deliberate and shrewd. For the cunning and the calculating, there is almost nothing to be gained by weighing into the debate (let alone becoming a thought-leader, as did Stephane Dion) in a country where attitudes are so mightily polarized. Indeed, there’s every indication that they’re about to grow even further apart, thanks to research released last month by the National Oceanic and Atmospheric Administration.

According to an article by Katherine Bagley, writing for InsideClimate News, “The long-debated hiatus or pause in global warming, championed by climate denialists who tried to claim it proved scientists’ projections on climate change are inaccurate or overblown, probably did not happen at all.

A new study by researchers at the National Oceanic and Atmospheric Administration finds that the world’s warming never really stalled during the last 15 years – it was just masked by incomplete data records that have been improved and expanded in recent years.

Remarked Tom Karl, the director of NOAA’s National Centers for Environmental Information and principal author of the study: “The rate of temperature increase during the last half of the 20th century is virtually identical to that of the 21st century.”

That’s the sort of comment that gets “denialists” howling mad. Just ask New York based financial and business writer John Steele Gordon. In a recent Wall Street Journal commentary, he insists, “climate science today is a veritable cornucopia of unanswered questions. Why did the warming trend between 1978 and 1998 cease, although computer climate models predict steady warming? How sensitive is the climate to increased carbon-dioxide levels? What feedback mechanisms are there that would increase or decrease that sensitivity? Why did episodes of high carbon-dioxide levels in the atmosphere earlier in Earth’s history have temperature levels both above and below the average?”

Indeed, he ponders pointedly, “If anthropogenic climate change is a reality, then that would be a huge problem only government could deal with. It would be a heaven-sent opportunity for the left to vastly increase government control over the economy and the personal lives of citizens.”

In a country – namely ours – that depends so heavily on greenhouse-gas emitting fuels, politicians (with a few notable exceptions) have clearly decided that when it comes to climate change, discretion is the better part of, if not valour, political survival.

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Jul 28 2015
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Economy, Politics

Hoisted by their own petard

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There was never anything essentially wise – beyond the obviously political considerations – about the Government of Canada’s white-knuckled determination to balance its budget come hell or Armageddon.

In their quietest moments even the fiscal hawks among us must admit that into all lives, some red ink must fall. Individuals, banks, commercial enterprises and, yes, even governments do, from time to time, deficit-finance their way to durable prosperity. That’s simply because the coincidence of opportunity and solvency is not always – in fact, never – perfect.

Knowing this, then, we ought not become the saps that campaigners on the hustings seem to think we are when they point to their debt-defying antics as proof of their unimpeachable sagacity.

Of course, the Harper government isn’t the first in this country to claim that it, and only it, has the best interests of the average tax payer at heart when it refuses to consider any alternative to a bottom line that reads: zero.

The problem is this ambition just doesn’t appear sensible, or even achievable, at the moment.

“Rotten Luck”, thy name is Torytown.

Oil prices are slumping more deeply than anyone expected. The economic revival in the United States is losing steam. The tragi-comedy that is the Grecian formula for European recession unfolds even as a downturn in our Greater Canuckistan’s resource-fired economy conjures the dreaded “R-word” here.

Now, the Parliamentary Budget Officer, Jean-Denis Frechette, says all of this is becoming a lethal cocktail for Conservatives.

According to a CBC report last week, “The government had projected a slim, $1.4-billion surplus for 2015 in its budget, which was presented last April.

The PBO estimates a budget outlook updated with the lower GDP numbers alone would show a $1.5-billion deficit at the end of this year and a $0.1 billion, or $100 million, deficit in 2016-17. Canada would be back at a $1.5 billion surplus in 2017-18, according to the PBO projection.

Added the public broadcaster: “But that’s not the whole picture. Weak GDP growth, the budget office says, would be partially offset by higher inflation and lower interest rates. Once those are taken into account, the projected deficit is $1 billion this year, with a small surplus of $0.6 billion, or $600 million, in 2016-17, and $2.2 billion in 2017-18.”

In fact, writing in the Globe and Mail earlier this year, Jim Stanford, an economist with Unifor, had this to say:

“From the outset, the battle to slay the deficit was all about political optics, not economics. Canada’s deficits after the 2008-09 meltdown were among the smallest in the world. Our debt burden (the more important concern) is small compared to those of other countries and other periods in history. Indeed, as a share of GDP, the debt has been shrinking since 2012. So whether Ottawa has a small surplus or deficit any year is irrelevant.

“For this government, though, it’s a political imperative. Nothing will prevent the Conservatives from forecasting balance next year.”

Nothing, so far, has. Ignoring the writing on the wall has become a singular pastime in Ottawa. And no one plays the game more stubbornly than Finance Minister Joe Oliver who continued to insist – despite the rather compelling, new evidence to the contrary – that the government will better than balance the budget.

“We have looked at our numbers and we are very comfortable that we will have a surplus this year,” he said last week.

Such insistence, once merely economically unwise, is now becoming politically perilous to the self-described standard-bearers of wise money management.

Are certain petards about to hoist certain MPs, after all?

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Jul 27 2015
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Economy, Municipal Affairs

The Moncton Miracle strikes again

To the surprise of precisely no one in New Brunswick’s Hub City, Moncton has scored another top finish in the race to be known perpetually as the pluckiest, little urban area in Canada.

It is, perhaps, unbecoming to dwell on one’s civic greatness, but what the heck. . .let’s do it anyway.

According to the Conference Board of Canada’s latest Metropolitan Outlook, “Moncton and Saint John are among the five fastest-growing medium-sized (municipal) economies in Canada this year. . . On the other hand, St. John’s, Newfoundland, is on track to post the slowest economic growth among the 15 cities covered in the report.”

Specifically, the analysis finds that Moncton’s real “GDP is forecast to rise by a 10-year high of 3 per cent this year, thanks to healthy gains in manufacturing and the broader services sector. In particular, the local transportation and warehousing sector, whose outlook is closely tied to that of manufacturing’s, is expected to expand at a vigorous clip. The solid economy will translate into decent job and income gains, which should encourage consumers to continue spending.”

Meanwhile, up the highway a piece, Saint John will benefit from “a recovery in manufacturing and in resources and utilities sectors.” This will push economic expansion the Port City to about 2.3 per cent this year.

In fact, manufacturing and resources and utilities will rebound thanks to a comparatively weak Canadian dollar (relative to its U.S. counterpart) as well as “stronger housing demand south of the border.”

As if to invite a chorus of “We Told You So,” St. John’s economy is forecast to tank, dragged down by plummeting oil prices and steady declines in resource investment and production.

Still, the Conference Board chirps optimistically, “things will be better than last year when total output fell by 2.3 per cent. This year, St. John’s (GDP) is forecast to grow by 0.5 per cent, as solid gains in manufacturing, in wholesale and retail trade, and in finance and real estate are offset by declines in resources and utilities and in construction.”

All of which should comprise a heady argument for steady, efficacious diversification in mid-sized metropolitan economies. This is, of course, the not-so-hidden secret of Moncton’s success over the past 25 years. Hard experience has taught this city that one-horse towns are just fine until the horse breaks a leg and has to be shot.

Instead, this greater urban area has worked assiduously to develop a broad array of economic clusters, any one of which can, and does, imbue this region of the province with business and employment opportunities without – it should be emphasized – a disproportionate degree of help from provincial and federal governments.

As a consequence, Moncton-Riverview-Dieppe’s entrepreneurial verve has placed it first over the finish line repeatedly in KPMG’s annual survey of the most likely and winsome communities for economic growth in North America.

Our urban dynamo is also, by deliberate design, one of the “smartest” cities on the continent – if we measure intelligence by the sophistication and coverage of our telecommunications and information technology infrastructure and services.

Indeed, as other communities in this province suffer from their dependence on seasonal, resource-based industries, Moncton’s economy remains buoyant year-round.

There is, perhaps, no better reason than this to expect steady, self-perpetuating success from a new, multi-purpose downtown events centre – for if any community in this province can build a solid business case for such a project, it’s this one.

And it’s with our characteristic foresight and determination that we must proceed without delay, if only to preserve our reputation for promise and pluck.

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Jul 26 2015
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Culture, Economy, Personal History

What old Guysborough town teaches

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When the mid-summer sun shines sweetly on the roads of Guysborough town, and a breeze brings news of waves breaking on the far shore of Chedabucto Bay, you know it is high season – that time of the year, after the last black fly and before the first frost, when this village of 400 at the eastern tip of mainland Nova Scotia is at its best.

Up and down the main street – which may be only as long as quick breath on lover’s lane – evidence of revival is everywhere. Bunting flies at pretty cafes and shops festooned with homemade goods and specialty fare.

There, along the boulevard, the Rare Bird Pub & Eatery jostles the Skipping Stone Cafe and Store. Not far away, the Full Steam Coffee Co. shakes hands with the Harbour Belle Bakery. Elsewhere, the Osprey Shores Golf Resort caters to those of a clubbier mindset, and the DesBarres Manor Inn provides a year-round destination for romantic foodies of every inclination.

Here was where Prince Henry Sinclair was rumoured to make landfall in 1398. Here was where peripatetic Acadians settled between 1604 and 1659. Then, in the 18th Century, came the Scots and the Irish, fresh from the Napoleonic wars.

My original forebear, a fellow by the name of James, apparently sailed from Scotland with a land grant of 100 acres, given to him as a reward for his military service in Europe. Of course, in the late 1700’s, there were no roads to speak of, let alone physicians. So, when a tree fell on the poor sap’s head, he did what most transplanted Scots of good, sturdy character did at the time: He died.

Still, the family he sired and the community he helped build persisted which is, all things considered, a minor miracle.

One of the more urgent conversations in Atlantic Canada concerns the plight of its rural areas, most of which can boast notable provenances. Faced with aging and dwindling populations, inadequate access to educational opportunities, crumbling transportation and communications infrastructure, and winnowing industrial bases, many are on the brink of extinction.

In fact, more than once in both distant and recent memory, Guysborough, itself, has flirted with calamity.

Once, lumbering and shipbuilding dominated the local land and seascapes. Not anymore and for all the reasons familiar to coastal communities across the region (changing technology, a shrinking pool of skilled labour, shifting government policies and priorities).

Commercial fishing, a traditionally vital engine of employment, came to a screeching halt during the 1980s and ‘90s in the wake of the federally imposed cod moratorium. Since then, stabs at long-term economic development have enjoyed only mixed success, though don’t utter such a blasphemy anywhere in Guysborough County, lest you prepare yourself for a long debate.

Still, the deeper truth is, as prominent Maritime writer Harry Bruce (pater familias to me) once noted, “Wave after wave after wave of Maritimers have left their beloved homeland, rolling westward again and again to seek jobs up and down the Atlantic seaboard, in the American midwest and far west, in Quebec, Ontario, the Prairies, British Columbia, and the northern territories . . . Maritimers, more than other Canadians, have had to keep their eyes on the horizons, and Leaving Home has long outlasted the golden age of sail as part of their heritage.

Yet, now that Alberta has given up the ghost of its oil and gas promise, we may live long enough to witness a mass return of Maritimers to these shores.

Perhaps this is all that old Guysborough town teaches: faith.

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Jul 22 2015
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Economy, Employment

Don’t fear the “R-word”

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Economists tremble at the appellation’s very utterance. Politicians descend into denial at the term’s deployment in the mainstream media. And, when the “R-word” hovers into view, regular folks batten down the hatches and check the condition of their rainy day funds stored neatly under their mattresses.

But are recessions really all bad, after all?

Sure, they tend to increase the amount of joblessness in society. They devalue personal savings and investments. They dampen business opportunities, and they generate the sort of fear and loathing that a 100-year blizzard often engenders.

Now that Canada is in one (a recession, that is), despite protestations to the contrary of our fearless, federal leaders, we might properly expect a slow, agonizing grind in the months, or even years, ahead.

Still, it ain’t necessarily so.

According to an item on the investopedia website, posted by financial writer Chris Seabury, recessions enable economies to “clean out the excesses. During this process, inventories drop to more normal levels, allowing the economy to experience long-term growth as demand for products picks back up.”

What’s more, these cyclical downturns – typically identified after the gross domestic product shrinks in two consecutive months – have an almost refreshing, levelling effect. As Mr. Seabury writes, “Recessions. . .help keep economic growth balanced. If the economy grew unchecked at an expansionist rate for many years, this could lead to uncontrolled inflation. By having recessions. . .consumers are forced to cut back in response to falling wages. These falling wages force prices to drop, creating a situation in which the economy can grow at normal levels without having prices run away.”

They can also “create massive buying opportunities in huge asset classes. As the economy runs its course, the markets will readjust to an expanding economy.”

Notably, perhaps, “economic hardship can create a change in the mindset of consumers. . .(who) stop trying to live above their means (but) within the income they have. This generally causes the national savings rate to rise and allows investments in the economy to increase once again.”

In fact, writes Stijn Claessens and M. Ayhan Kose in the International Monetary Fund’s research department, “There were 122 completed recessions in 21 advanced economies over the 1960–2007 period. Although this sounds like a lot, recessions do not happen frequently. Indeed, the proportion of time spent in recession – measured by the percentage of quarters a country was in recession over the full sample period – was typically about 10 per cent.”

So while recessions can clean out the pipes and tune up the engine of any economy, they don’t last forever, even if it only seems that way.

In my adult life, I’ve gamely weathered four downtowns – 1981-82; 1991-1993; 2000-2001; and 2008-2009. They didn’t kill me. In fact, I might even say, they made me stronger. Certainly, they made me smarter about debt, equity, and never taking anything for granted in the precarious, capricious world of money management and the revolving doors of the labour market.

None of which is to say that economic dislocation is preferable to long-term stability. Still, it’s worth noting that droves of Canadians endure near-permanent states of recession thanks to patently unfair, negligent policies of various governments at every level.

And, as this country appears to be heading into another one of its multi-month, economic head colds, only the mighty among us will truly fall.

In this company, of course, belong politicians who overpromise and underestimate their own power to affect the course of human affairs just in time for a general election.

They do, indeed, need fear the “R-word”.

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Jul 16 2015
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Economy, Politics

Who let the dogs out?

New Brunswick Premier Brian Gallant has sicced his political terriers on the federal Tory government for an array of alleged abuses he claims are ruining the province’s economy. The problem is, those dogs won’t hunt.

In an open letter earlier this week, the premier stipulated that, “provinces have been unduly burdened by the federal government’s approach to balancing the books. Provinces have been left between a rock and a hard place as they try to stretch every dollar to deliver the most important services Canadians rely on. The federal government has the capacity and the obligation to step up and play a greater role.”

He went on to state, “The upcoming federal election is an opportunity to discuss how the federal government can partner with us in creating jobs for New Brunswickers and focusing on supporting services and initiatives in education that will lead to long-term growth that will benefit all Canadians and this country’s economy.”

Specifically, Mr. Gallant wants, “equitable support on federal investments in energy and natural resource projects”, more investment in “infrastructure renewal in New Brunswick”, and more material help “fostering success for New Brunswick’s key industries”.

He also demands that the Feds review their tough stand on the Temporary Foreign Worker Program and reverse their policies concerning the Employment Insurance program, which he claims puts seasonal workers in the province at an unfair disadvantage relative to unemployed people elsewhere in the country.

“We want to work with the federal government to prioritize and invest in initiatives that will create jobs and help families,” the premier wrote. “Our government’s focus is on creating the conditions for job growth and economic development. We look forward to discussing these items with party leaders, the candidates in New Brunswick, and with policy-makers from the respective parties.”

All of which drew New Brunswick Conservative MP John Williamson from the shadows, his six-guns blazing away.

“There is a fiscal imbalance,” he snorted. “It’s between provinces that develop their economies and those who choose not to. The federal government cannot force the provinces to develop their resources. I’m not going to sit here and let the premier blame others when we have the solution as New Brunswickers to fix our problems, to grow our economy, to keep and attract people here.”

Referring to Mr. Gallant directly, he said, “This is the beggar begging for more.”

As intemperate as Mr. Williamson’s characterization may be, he’s more right than wrong.

The New Brunswick government has within its grasp the tools to fix the provincial economy without barking for more money from Ottawa. It has, for example, an entire shale gas industry it refuses to develop, despite spending countless hours checking and re-checking the safety and efficacy of hydraulic fracturing.

We are, however, unaccustomed in this province with doing for ourselves; and its a condition we had better reverse without delay.

For, even if Mr. Gallant is correct about the putative “fiscal imbalance” between Freddy Beach and Fat City, no amount of baying and snarling will ever change Ottawa’s mind about what it does, or does not, owe in federal transfers to the provinces.

If anything, the Liberal premier’s deliberately public complaint about the big, bad feds and their parsimonious ways merely persuades a dubious electorate that Mr. Gallant is an ideological shill for Justin Trudeau and the national Grits. And those folks have dropped from 44 to 22 per cent in popular support in less than a year.

Maybe it’s time for Mr. Gallant to call off the dogs – if only for his own sake.

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