Feb 05 2016
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Government, Politics

The deficit facts of life

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Balance the budget, certainly; but not just yet. In a nutshell, this was what New Brunswick Finance Minister Roger Melanson told assembled ladies and gentlemen of the press and other observers at Tuesday’s provincial budget announcement.

Still, though it seemed to take almost everyone off guard, the news that annual deficits – despite this year’s combination of tax hikes and spending cuts totaling nearly $600 million – would be facts in our lives until at least 2020-21 was not actually surprising.

In fact, a careful review of the budget measures reveals that some sort of pernicious shortfall was always in the cards.

On the revenue side, yes, the Gallant government raised the Harmonized Sales Tax to 15 per cent, from 13 per cent, effective July 1. And, yes, it also goosed the corporate income tax rate to 14 per cent, from 12 per cent; increased tobacco taxes by three bucks a cigarette; boosted the one-time property transfer tax; and hiked capital tax rates on banks.

On the other hand, the finance department decided against tolling any roads in the province, and even snuck through a modest decrease in the income tax rate the province’s top earners face.

On the spending side, yes, the government announced it was slashing 1,300 civil-service jobs over the next five years; 30 per cent of middle-manager positions were on the chopping block. And, yes, it also terminated the Gagetown ferry; amalgamated its 40 contact centres across the province into four; and froze operating grants to universities.

Again, though, it left both the departments of education and health virtually untouched – at least, in any significant way. Both Mr. Melanson and Health Minister Victor Boudreau recently confirmed that there’s very little appetite among the voting public for dramatic cuts to these, the province’s largest and most expensive program portfolios.

The results, then, are largely predictable: a deficit this year of $347 million; a deficit of $267 million in 2017-18; $167 million in 2018-19; $49 million in 2019-20; and a yet-to-be determined surplus in 2020-21.

Said Mr. Melanson about his “fun-with-figures” exercise over the past few weeks: “The decisions we are announcing today on expenditures and revenues will lead us to a balanced budget and meet our commitment to get our finances in order. This is very important because we currently spend more on serving our debt than we do on post-secondary education.”
Complicating matters, of course, is the economy, which isn’t broadcasting especially cheerful signals these days. “Economic activity is expected to be tempered by demographic realities, private-sector investment, fiscal measures, and the recently announced suspension operations at the Picadilly mine,” Mr. Melanson reported.

Naturally, what frustrates close political watchers in this province is the fact that a $300-million tax-revenue boost haul will have only a modest impact on New Brunswick’s bottom line.

The deficit is now running at approximately $466-million. If the Province’s projections prove to be accurate (and, be honest, when have they ever?), the next-year-over-this-year improvement in the annual shortfall will be somewhere in the neighborhood of $100-$120 million.

That’s not bad, but it’s nothing to write home about. And it’s certainly not likely to quell the concerns of business lobbyists, who think taxes are the devil’s work, and fiscal hawks, who believe New Brunswick can find multiple savings in its health and education systems if its political leaders are willing to close surplus classroom, consolidate hospitals and clinics and take a meat cleaver to the associated labour force.

To be fair, though, who’s going to do that?

Our deficit, it seems, will be with us for a while.

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Feb 03 2016
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Economy, Government, Politics

Our feet of clay in a cold place

The hole we're in

The hole we’re in

If hell freezes over in New Brunswick, it doesn’t actually solidify until Canada Day 2016, when the sun warms us just enough to let us know that we owe, we owe, and, so, off to work we continue to go.

July 1st is when the Brian Gallant government has decided to impose a two-percentage-point bump in the harmonized sales tax – from 13 to 15 per cent. His second budget makes his reasoning clear. As Finance Minister Roger Melanson explained in his speech on Tuesday, “When we completed our review of the books, it was clear that there would be no way to lay the foundation we need without an HST increase or significant cuts to education and health care. . .New Brunswickers made it clear that they do not want deep cuts in education or health care.”

For years, here, raising the HST has been a bedevilling proposition for every political party. Only more controversial has been a full-court embrace of shale gas development and highway tolls. Times have changed.

In this budget, the Grits have neatly embraced the fiscal fix that former Prime Minister Paul Martin imposed in 1991 to balance the federal books at that time. Indeed, rip a page from the old Red Book, and you will find the 33-year-old Mr. Gallant holding the hands of the old, Grit guard.

Still, he’s not wrong; he’s just late. And so were his federal predecessors, when Ottawa’s brain trusts dropped the federal (GST) portion of the HST one point to six per cent, and again in 2008 to five per cent, leaving N.B.’s HST at 13 per cent.

Consider where this province might be today had successive provincial governments – those under Messrs. Shawn Graham, David Alward, and Gallant – possessed the political courage to hike the HST two points back then and applied its proceeds to economic diversification, innovation and . . .oh yes. . .the humungous, horrific deficit and debt we now so cheerfully enjoy.

Why, just for fun, we might even conduct a work-back of lost revenues, lost opportunities and truly myopic public policy and service.

The Gallant government now claims that its hike to the provincial portion of the HST will net a total of some $300 million over the last nine months of the current fiscal year. Had it introduced such a measure when it rode into office back in 2014, it would now have in the bank a total of $800 million with which to cover New Brunswick’s pernicious and perennial deficit and chomp a commanding chunk out of its multi-billion-dollar long-term debt. What’s more, through appropriate tax rebates to middle- and low-income earners it would have done so with nary an argument.

Now, had former premier David Alward pursued a similar course while he was in Freddy Beach, those savings, today, might actually amount to a budgetary surplus.

As it is, despite the Gallant government’s efforts to balance the books, the annual deficit in New Brunswick this fiscal year is likely to amount to something close to $300 million, as the long-term debt rises to $13.4 billion. That’s nearly $18,000 for every man, woman and child of less than 750,000 benighted, underemployed, anxious souls in this province.

Higher consumption taxes were never the way out of this mess; they were, in the minds of thoughtful people, a means to an end, the point of a spear. That end remains building a more durable, innovative, productive economy without having to constantly check the balance in the public bank account.

Will we do this now, before our hell truly freezes over?

Feb 03 2016
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Democracy, Government, Politics

Vision becomes us

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There have been times in the storied history of the Atlantic region when meaningless, self-destructive, icy battles over trade, skills and labour mobility between and among the provinces have almost melted away under the warming sun of common sense. But those times have been rare.

Prior to Confederation, a century-and-a-half ago, Maritime political leaders gathered in Charlottetown, originally to consider establishing a united, regional economy. Then, of course, certain Upper Canadians, led by John A. Macdonald, crashed the party and rewrote the agenda. Suddenly, the urgent conversation was about creating a bi-coastal nation (without, at that time, a railway to connect is disparate bits).

How’s that for vision?

How’s ours on the East Coast in the second decade of the 21st Century?

We might just remember an almost-concerted effort to forge closer, more efficacious economic ties, leading to some sort of durable political union among Nova Scotia, New Brunswick and Prince Edward Island in the mid-1960s. But as the counter-argument went at the time, “Where would we put the capital?”

Twenty years later, the debate flared again. This time, though, the political class in this part of Canada had no appetite for the concepts of either economic or political union; for they had become too complacent, too inculcated in the status quo thanks to decades of federal government welfare (transfers) to prop up their perpetually underperforming public accounts.

Now, when the rest of Canada reflects on us, it conjures a region of people wise in the ways of the sea, determined to give the shirts off our backs, willing to throw down a kitchen party. This, it seems, is the stereotype we gladly proffer in return for free money from other parts of the country. As long as Ontario and Quebec can laugh their rumps off at our expense, we court jesters can count on a cheque in the mail.

Again, how’s that vision thing going for us?

Each year or so, Atlantic Canada’s provincial premiers and their mandarins gather in capital cities around the region to consider how best to work together, how marvellously they may transform their tiny economies into what they have recently termed a “global force” of growth. At the same time, they just can’t seem to figure out how to rationalize the rules concerning the transfer of honeybees and booze across their provincial borders.

This small collection of principalities remains one of the most economically divided of any in the developed world. We make it virtually impossible, in this region, for university students to transfer their credits from one institution to another; for skilled tradesmen and women to find meaningful work if they choose to leave the jurisdiction in which they received their accreditations; for doctors, lawyers and veterinarians to move between provinces without first obtaining professional papers proving that the practices of law and medicine are, somehow, locally relevant and compliant.

Certainly, each Atlantic province must develop its own vision for economic and social security, And, indisputably, each jurisdiction should maintain the right and responsibility to protect and preserve its cultural heterogeneity.

But do these priorities obviate the common sense in pursuing the stock of our common story along the East Coast?

Should we continue to ignore the fact that the tales and travails that unite us are richer than those that currently divide us?

Shouldn’t this propel us to write the next chapter of a region that embraces its constituents as members of the same extended family of social, economic and political players?

All we need is the vision.

Once again, always again, let’s have that now.

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Feb 02 2016
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Humour, Personal History

The countdown begins

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A word to the wizened, if not always the wise: Only 35 shopping days remain before spring raises its lovely, garlanded head. Unless, of course, you count the weekends which, given the lack of money in various bank accounts around the region these days, why would you?

I like to pretend that in a little more than a calendric month, we in southeastern New Brunswick will be well on our way to a long, beatific summer. Of course, I like to imagine a lot of things that only rarely come true.

About this time last year, I was feeling pretty much the same way as I am today about the universe. In the first place, it looked like we had, for once, dodged the great, white bullet of winter. No more talk of polar vortexes, Alberta clippers and Nor’easters. Only sunny skies and gradually warming temperatures stretching ahead as far the mind’s eye could see.

We all know how that worked out. Two days before the official start of spring 2015, the Weather Network, with its irritating, trademarked cheerfulness, recapped the winter that was:

“According to unofficial totals as of March 18, this winter has now brought snowfall amounts that crack the Top 5 in Moncton, N.B., Saint John, N.B., and Charlottetown, P.E.I. As of Tuesday, March 17, Moncton was only 2 cm away from reaching the Top 5 with a snowfall total of 450 cm. As of 9:35 a.m. AT Wednesday morning, Moncton unofficially reported about 4 cm, which would put them in the no. 5 spot, knocking off the 1991-1922 winter.”

Still, what gives me hope that February and March of this year won’t, again, prove me a liar to myself is another Weather Network bulletin issued just last week. To wit: “The past two winters were dominated by a particularly resilient weather pattern, which kept the warm influence of the Pacific confined to the West Coast, and left the Eastern US open to persistent outbreaks of brutal Arctic cold. The winter of 2015-2016 finally looks to bring an end to this stubborn setup.”

Ah, yes. Good, old El Niño, the oceanic phenomenon that typically brings milder-than-average weather to the eastern seaboard, and chillier-than-seasonal temperatures to the southwest. The continent is experiencing an usually strong one this year. Or as the Weather Network reported a couple of months ago, “El Niño set a new record for heat in the central Pacific Ocean this week (November 24). Is it on track to become the strongest El Niño we’ve ever seen, and what could this mean for the winter?

“So far, El Niño 2015 has been very unusual. Teasing NOAA (National Oceanic and Atmospheric Administration) orecasters with signs and signals through 2014, it ultimately procrastinated in its actual development until early 2015 and it has been growing since, into a rival for some of the strongest El Niños we have on record. As of now, it has already set a new record, though. Weekly measurements of temperatures in the central Pacific ocean are now 5.4 degrees Fahrenheit above normal for the very first time in the quarter century that these measurements have been taken.”

On the other hand, as in all things weather related in this region, we hold our breath in abeyance of any certainty that our faith will be rewarded. For my part, I’ve lined up my seven shovels on the front veranda as if to challenge the first truly big blow to hit the city.

C’mon, I dare ya!

Tomorrow, it’ll be a mere 34 shopping days till spring. And I’m on a roll to blossom time.

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Feb 01 2016
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Humour, Personal History

How winter’s bone tests us

Permanent winter for a Moncton events centre?

We may remember the dreaded winter of 1992. Perhaps we choose to forget in the Hub City, which took the brunt of one of the worst white dumps in the recorded history of the province.

My sister was living here at that time and she remembers – so well, in fact, that she rarely sets foot in this fair town after the fall equinox and before the summer solstice.

The snow in 1992 reached the second-floor window of her apartment near Steadman Street. To escape, to get, say, milk and eggs, she crafted a makeshift bunny hill on which she slid to ground. (How she returned to her abode, I’m not entirely clear; something about climbers’ axes and pitons hovers into my long-fossilized mind).

The point is, as rough as we’ve had it recently in New Brunswick. . .well. . .it’s been rougher.

Nineteen-Ninety-Two was also the first full year of a brand, new tax introduced in a brand, new recession – the HST. As the snow continued to fall, joblessness in this province rose well above 15 per cent. Poverty and illiteracy rates were among the highest in the country. Violent crime was a daily occurrence in Moncton’s downtown core, which was, by the way, easily mistaken for certain boroughs of the burning, benighted southern reaches of London, England, where hooligans and punks roamed the streets nightly.

Last winter, one snowplow driver told Global News, “We’ve got as much snow now as we had then (in 1992). But then it came kinda all in like two or three days where this has taken a week. Then, we could not even drive with the truck with the wing down.”

All of which is to reiterate that notwithstanding last winter’s absurd “White Juan”, which seemed to last for weeks (trust me, it did; I have the pictures to prove it to my Los Angeles-based, Venice-Beach hovering, muscle-bound brother), we’ve actually had it pretty good in Moncton over the past two decades.

We’ve rebuilt our local and surrounding economies. We’ve diversified away from solitary, single industries and into integrated, diverse ones. We’ve embraced the notion of cultural and linguistic duality so completely that we’ve managed to host a baker’s dozen of major, international francophone events without materially or socially threatening anyone in this community who can’t (or doesn’t) speak and read the French language.

We have become, in effect, what we intended to become: a cosmopolitan city that welcomes newcomers with a shake of the hand and a slap on the back; an urban centre of 140,000 people that, on a good day, habitually behaves as if its region is ten times larger, as if its heart is 20 times as big, as its census data routinely reports.

We may one day remember the dreaded winters of 1992, 2015 or, indeed, the one we’re in.

In the meantime, the HST will surely rise. Toll fees will surely smack travellers on provincial highways. Income taxes might rise.

But all of this won’t stop us from inventing better tools for digging out from under an avalanche of debt and deficit. We are, in the end, remorselessly resourceful; we will outlast this particular winter.

And if we do eventually touch that rim at the edge of the world – on a hot summer day when the clouds gather over the ocean, and the sun shines through and onto New Brunswick – it will be ours to grab.

We will have sacrificed the memories of bad times to erect those of good ones, when winter’s bone does not so easily test us.

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Feb 01 2016
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Economy, Employment, Energy, Government, Politics

The palaver over pipelines

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In fact, he does looks like the kind of fellow who could tell the nation’s provinces, leading mayors and other assorted high-profile camera moths to, in effect, knock it off – and even get away with it.

On his worst day, New Brunswick MP and Government House Leader Dominic LeBlanc presents and comports himself like Hollywood’s latest incarnation of an emerging mafia Don – though, an uncharacteristically friendly version of the cinematic phenotype.

Not that there’s anything wrong with that. I quite like his latest declaration to the press about the most recent, and utterly mindless, fracas over pipelines in this increasingly God-forsaken land of ours.

In the aftermath of some 80 mayors from Quebec, and that province’s premier, declaring their opposition to the proposed Energy East pipeline traversing their respective territories en route to tidewater facilities in Saint John, Mr. LeBlanc had this to say to local newspaper reporters this week:

“We’re prepared to deal with the tough issues and recognize that the (federal) government has an important responsibility to help get natural resources to market. The whole country has benefitted from the Alberta resource economy, so I think it would be helpful that everybody lower the tone, allow the regulatory and review process to run its course and then the government will have to make a difficult decision.”

He’s not kidding.

Gosh, what shall we do with all that Alberta oil and gas? Truck it just so that poor roads and driver inattention may slam it into a government-built tourism kiosk somewhere outside of Thunder Bay? Rail it just so that poor tracks and conductor inattention conspire to blow up another small town in the middle of Great White North Country?

Or shall we finally recognize that as long as we need fossil fuels to power our domestic and export economies, the safest, cleanest delivery system is still the lowly pipeline – properly built, scrupulously regulated and strenuously monitored by officials of the Departments of Natural Resources and those of Environment Canada?

Still, even the logical choice is fraught with political peril. And Mr. LeBlanc knows this perhaps better than anyone outside the Prime Minister’s Office.

Any delay in the construction and activation of eastern and western pipelines automatically aggravates the Conservative west, whose political agents in Ottawa are prepared to make hay with their talking points about the hegemony of the Liberal east.

Conversely, anything other than rigorous, proof-providing research showing that pipelines are, indeed, the safest technologies currently available for transporting evidently toxic materials over long distances is sure to inflame the environmental lobby and their confederates at the municipal level of government.

Tough issues, indeed, with which the federal government seems determined to deal. Ultimately, Mr. LeBlanc says, it’s Ottawa’s choice to make. And that choice, he insists, “will be based on the information that comes from the robust independent review (underway). It won’t be based on someone’s news conference. I’ve always thought that the government decision should be based on evidence, on science, on environmental analysis, on expert opinion.”

Of course, I take one issue with this declaration: It already is.

According to a recent piece in the Financial Times, “Moving oil and gas by pipeline was 4.5 times safer than moving the same volume the same distance by rail in the decade ended in 2013 in Canada, according to a new study by the Fraser Institute public policy think-tank.”

By all means, Mr. LeBlanc, complete your analysis, ensure that it is correct and then let’s get this oil flowing in the safest, most economically expedient means possible.

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Feb 01 2016
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Economy, Politics

For whom the road tolls

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“Popular” is not exactly the word that leaps to mind when talking about toll roads and tax hikes, but if you’re contemplating steps to render both as facts of life for New Brunswickers, a little spin goes a long way.

So it was earlier this week when the provincial minister of the Gallant government’s strategic review, Victor Boudreau, and Finance Minister Roger Melanson, very nearly spilled the beans, observing that of all the options for eliminating the provincial deficit they’ve presented to the public, the most “popular” were tolling roads and raising the HST.

Of course, neither Liberal MLA spoke directly to either issue in advance of next week’s budget, preferring, instead, to issue vague assessments of the vox populi’s current mood on the twin subjects of spending cuts and revenue raising.

Mr. Boudreau: “There has been a lot of work being done over the last number of months. I do think you’re going to see something that is going to, at the end of the day, address the fiscal challenge we are facing as a province, but doing it while maintaining. . .balance.. . .New Brunswickers have made it clear they don’t want to see deep cuts to health care and education.”

He also allowed that the debate over toll roads has been the most interesting component of the consultations: “A lot of people want tolls, but very few people want to pay for them.”

There you have it, ladies and gentlemen: This province’s existential problem in a nutshell. We New Brunswickers want to lasso the moon; we just don’t want to buy the rope.

In this, of course, we’re no different than anyone else. Still, our unique set of economic circumstances insists that we adopt a colder-eyed approach to solving our shared problems than ever before.

When Mr. Gallant began his review of government spending months ago, he declared that everything was on the table – on both the expenditure and revenue side of the ledger.

If that’s true, then next week’s budget should reveal a dramatically reduced (in both size and cost) civil service, with those savings redirected into strategies and programs that are likely to grow the economy and create jobs and, in so doing, goose tax revenues to public coffers.

But let’s not kid ourselves. We are well past the point where even the most efficiently run government and bureaucracy can pull our fat from the fire. This is not an overnight proposition. It will take years of lean, mean management in the public sector to keep the ship of state of a steady keel.

In the meantime, emergency measures are urgently, if lamentably, necessary. And that means tolls and taxes, neither of which, incidentally, need be especially onerous.

Virtually every economist I’ve consulted over the years stipulates that taxes on consumption are eminently more efficient and fundamentally fairer than levies on income. What’s more, those who subsist below a certain standard of living ought to receive rebates equal to their HST outlays.

Indeed, if all provinces along the East Coast actually harmonized again their harmonized sales taxes into one 15 per cent regime for all, as Nova Scotia Premier Stephen McNeil suggests they do, the unfair competitive pressures on the private sector would melt.

Tolls are somewhat more difficult to administer and collect than taxes without undermining the monetary value of the exercise, itself. But it can be done, and to great effect, as it is in other jurisdictions across North America.

Think of taxes and roadway fees as temporary measures that, nonetheless, toll for thee.

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Jan 27 2016
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Government, Municipal Affairs

Altogether now

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Imagining that Moncton (“The Hub City”), Saint John (“The Port City”) and Fredericton (“Freddy Beach”) have it within their independent wheelhouses of determination to come together as one, driving urban force for New Brunswick is a little like conjuring the offspring of a duck-billed platypus and a giraffe.

Still, that doesn’t stop municipal mothers and fathers from occasionally musing about the good ideas that such a miracle of nature might produce. What say you, the apparent mayor for life of the province’s capital city, nestled along the flood plains of the mighty St. John River?

“We’re a small province and as I have always said, I don’t consider Saint John and Moncton to be the competition, and I don’t think they think any differently. It makes no sense to pull 25 jobs out of Saint John and move them to Fredericton or pull them out of Fredericton and move them to Moncton. It doesn’t do anyone any good. So, we need to make sure that we have our own little pockets to nurture.”

Those words from Fredericton Mayor Brad Woodside, courtesy of some nice reporting by the Saint John Telegraph-Journal’s John Chilibeck, amount to some of the funniest observations to issue from a local public official in many a tidal bore.

Really, Your Honour, wouldn’t it be more genuine to admit, despite your evidently good wishes, that none of the province’s major cities are at all prepared to join hands and screech kumabya at the top of their municipal voices simply because such a display of solidarity runs counter to time-tethered, shop-worn approaches to municipal development?

After all, the thing about having one’s own little pocket to nurture is that it naturally invites competition, especially when you’re counting on two other levels of government to help finance your commercial and economic aspirations.

Just as soon as Fredericton scores a big deal in the IT sector, Moncton whines about the fact that, infrastructure-wise, it’s a far “smarter” city than its “bland” and “white-bread” rival to the northwest. Dude, so not fair!

Just as soon as Saint John snags a deal with the feds to do. . .oh. . .anything, actually. . .Fredericton throws itself down on the tiles and pitches a fit. Mama, where’s my soother?

Still, Mayor Woodside may yet be in possession of a kernel of imagination on this matter. It may be possible, in fact, to forge a tri-city social and economic development agreement – one that leverages the strengths of each community for the benefit of all.

A multilateral agreement on infrastructure spending that keeps the highways and byways among these municipalities in the best shape possible (girded by a concerted and collective effort to negotiate with the provincial and federal governments) might be a productive start.

An all-city development board that spends its time examining ways to reduce the costs that each city shares in duplication, and explore ways to goose economic opportunity across the southern, urban swath of the province might also provide a sense of communitarian purpose.

Apart from this, though, the Sea Dogs and the Wildcats will forever battle for the sentiments of their respective fans. That’s not necessarily a bad thing. In fact, it’s inevitable. Within this context, though, we might still grow closer together.

So, what shall the new capital conglomerate be called? Greater Hubportbeach? Greater Portbeachhub? Greater Beachubport (pronounced: beech-a-pore)? I like the ring of that last one, if only because it drops an unnecessary consonant. You’re welcome, burgermeisters.

Dear me, can Maritime union be far behind?

What a miracle of nature that would be.

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Jan 27 2016
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Economy, Employment, Wealth

The dread pirate “Wagegapper”

We could sell the snow. There's plenty of that

We could sell the snow. There’s plenty of that

Pity the poor rich man. In this economy, he just can’t catch a break. Oh sure his castle continues to glisten in the rising sun. His moat is pristine and his crocodiles are well fed. But can he actually accumulate money. . .you know, the way he used to?

According to a Bloomberg/HuffPost Canada post this past August 8, “The stock market rout gripping the world last week and today is bad news for just about anyone who uses money, but when the value of assets collapses, it’s the richest who lose the most.

“Take, for instance, Facebook founder Mark Zuckerberg, who lost $1.9 billion U.S. in a day’s trading on Friday; or Amazon co-founder Jeff Bezos, who was down $1.8 billion; or famed investor and Berkshire Hathaway head Warren Buffett, who lost $1.7 billion. And that was all last Friday – before Monday’s even wilder ride on the stock market.

“According to the Bloomberg Billionaires Index, the world’s richest 400 people lost $182 billion in wealth last week. It was the largest drop ever seen in the index, but it only launched last September. The recent drop in stock markets around the world means the world’s 400 wealthiest people have in total lost money this year, with their combined net worth at $3.98 trillion, down $75 billion from the start of the year.”
Under the circumstances, we in the Atlantic Maritimes should count ourselves lucky. We have managed to avoid such calamitous outcomes concerning money, as we don’t have any.

According to Environics Analytics two years ago, the median family income in New Brunswick was just about $57,300 – the second lowest in Canada, just ahead of Prince Edward Island. Since then, the numbers for both provinces have dropped by more than seven per cent (about the rate the central bank has reduced the cost of borrowing for businesses and consumers).

Meanwhile, unemployment in this region has spiked as wages have fallen. In fact, the Atlantic region has become a jurisdiction of “wagegappers”.

In economic terms, that simply means the more desperate an individual is for work to pay his or her bills, the more likely those with money will prey on his or her fears. This calculus drives down the cost of labour, and the vicious cycle of downward spirals ensues, further separating the moats of the rich from the slush puddles of the working poor (a class we once called bourgeois).

It’s not like we oughtn’t to have seen any of this coming. Back in 2013, Christine Saulnier and Jason Edwards of the Canadian Centre for Policy Alternatives had this to say in a widely circulated opinion piece:

“Statistics Canada released new data on high income trends in Canada with nary a mention of the Atlantic Provinces. From a Canadian comparative perspective, the data told a story that was more striking for most of the rest of the country and in particular, Alberta, Ontario, B.C. and Quebec where 92 per cent of the top 1 per cent of tax filers are found, with only 3.4 per cent in Atlantic Canada. These data reveal that the Atlantic Provinces are all significantly less equal today than they were in 1982. The trends are. . .not surprising.”

Indeed they were not, and they are not today in this region, where the income gap between the rich and the poor has widened.

Pity the wealthy for their losses of late? Absolutely.

After all, they may soon join the club around the burning barrel beyond the moat in the deep, dark woods along with the rest of us.

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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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