Tag Archives: Atlantic Canada

An Atlantic Canadian field guide to surviving recessions

The one thing Atlantic Canadians manage better than almost anything else is recession.

When the economic wind blows cold, we throw another log into the wood stove and cinch our collars.

When our spending money runs short, we whip out a tin of beans and tighten our belts.

When others across the country tremble at the mere thought of stock markets circling the drain, we cast a rueful eye to the storm clouds gathering on the near horizon and mutter, “Yeah, what else you got?”

Of course, we’ve had plenty of practice. Recessions – or weathering them – are kind of our thing. After all, two consecutive quarters of what experts call “negative growth” is, relatively speaking, a permanent way of life along the East Coast. It’s certainly no reason to panic.

But just tell that to the chattering class.

In times of yore, when the mighty wanted to know the shape of things to come, they would instruct an augur to read the entrails of a small animal. Today, they’re more likely to consult an economist.

Are we, in the western world, barrelling toward another recession?

Yup, says Martin Feldstein, a former chairman of the Council of Economic Advisers and a professor at Harvard University. “Ten years after the Great Recession’s onset, another long, deep downturn may soon roil the U.S. economy,” he wrote in a recent edition of the Wall Street Journal.

Maybe or maybe not, thinks The Toronto Star’s David Olive, who wrote this fall, “The Canadian financial system is among the world’s most stable. . .

But that is small comfort for Canadians. The global financial system is intimately interconnected. . .At all times, the world’s 300 or so biggest banks, including Canada’s Big Six, have enormous short-term loans outstanding to each other. Which means that the failure of just one giant financial institution could bring them all down.”

Anyone ready for a second helping of entrails?

Never mind. Here are some hard-won – if not exactly failsafe – tips for surviving the next recession in Atlantic Canada:

Avoid obvious and precarious flights of fancy. I once worked for a guy in the United States who truly believed that starting a magazine in the middle of a downturn was a grand idea. After all, there’d be no competition. Advertisers would surely flock to his venture, begging to spend their marketing budgets. The lesson learned? Don’t start a magazine in the middle of a downturn.

Still, don’t be afraid to embrace the big, wide world. If we have jobs, we should do everything we can to keep them. But if we don’t, because, well, we just don’t roll that way, we ought to double-down on our enterprising instincts. Is there a promising, new revenue stream just waiting for our particular talents and experiences? Are there two or three or even four? Indeed, when the world finally comes up for air again, our bank accounts will thank us.

Be pennywise, but not essentially miserly. It’s important to know the difference, which is sound advice even when good times roll. Ask ourselves whether the dollar we’re planning to spend will vanish like rain on a sun-caked riverbed, or germinate the seeds of new growth. We might take a course that will upgrade our suite of professional skills. But, unless the world’s supply of wicker suddenly dries up, we should ensure that course is not applied basket weaving.

Finally, float like a boat. If history teaches anything about Atlantic Canada it’s that periodic highs and lows in the regional economy are like Fundy tides: They come, they go, and there’s nothing we can do about them.

So, we throw another log on the fire. We crack open a tin of beans. We wait for the light.

Meanwhile, we manage.

We always do.

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Away in a manger

It’s a sign of the times, perhaps, that federal and Atlantic provincial leaders chose to meet in a barn the other day. After all, as any farmer will testify, barns are where the action is.

In fact, this particular barn was more of a renovated convention space located on federal Agriculture Minister Lawrence MacAulay’s bucolic property in rural Prince Edward Island, but the significance of the location wasn’t lost on anyone observing the rare conclave of government officials. They had come, ostensibly, to get things done. And, by all accounts, they succeeded.

According to a news release, “The Government of Canada and the governments of the four Atlantic Provinces are working together to build a vibrant economic future for Atlantic Canada by focussing their efforts and resources to stimulate the region’s economy, support the middle class and address both long standing and emerging regional challenges.”

Specifically, the group – which included premiers Stephen McNeil, Brian Gallant, Wade MacLauchlan and Dwight Ball, and federal ministers MacAulay, John McCallum, Scott Brison, Dominic LeBlanc, Navdeep Bains, and Judy Foote – announced a new plan to “stimulate the region’s economy, support both innovative and resource-based industries, and increase job opportunities for Atlantic Canadians.”

High on the list was a commitment to boost immigration to the region. According to the post-meeting communiqué, “The first area of action focuses on skilled workforce and immigration with the introduction of a new three-year immigration pilot project aimed at addressing the unique labour market challenges in Atlantic Canada.

“When in place, the pilot project will help to better match the needs of local employers with the skill sets of immigrants while helping to improve the attraction and retention of newcomers in Atlantic Canada. Through this project the Government ‎will admit up to 2,000 immigrants and accompanying families in 2017, with rising numbers in the following years depending on performance. This is a substantial increase, amounting to almost half the current number of provincial nominees in Atlantic Canada. The federal and provincial governments will continue to undertake cooperative actions that will bring stable and long-term economic prosperity in Atlantic Canada and additional joint actions will be unveiled over the coming months.”

This is eminently good news, and for a variety of reasons.

For one thing, it demonstrates, for the first time in a very long time, that federal and provincial leaders are both able and willing to work together. Gone, one hopes, are the days of table-thumping and hand-wringing that were so unproductively numerous during the years of Conservative reign in Ottawa.

Secondly, and even more importantly, the decision to actively increase immigration to the region – a crucial bulwark of long-term prosperity for each of the Atlantic Provinces – is a clear indication that our elected officials not merely understand the key challenges facing the economy, but are actually equipped to do something about them.

Said Wade MacLauchlan, Premier of Prince Edward Island, in a statement: “To build on our successes and create sustained prosperity for Prince Edward Island, we must grow our workforce and continue to foster an environment of innovation and entrepreneurship. Working together with our Atlantic, federal and community partners, we will grow our population and create economic opportunities for the Atlantic Region.”

This might not sound like much. But consider the rising tide of acrimony, anger and outright hate welling in other parts of the world. The Atlantic region, and Canada as a whole, stands in sharp contrast to the vicious anti-immigrant rhetoric in the United States and Europe – a beacon of light, as it were, from a barn by the bay.

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Our four solitudes must come together


When the rest of Canada reflects on its eastern shores (as it actually does, if only from time to time), it conjures the Atlantic Provinces as a tightly knit region of folksy, friendly people wise in the ways of the sea, perpetually determined to give the shirts off our backs, fiercely independent to a fault yet broadly willing to throw down a kitchen party.

The truth is more complicated and, frankly, disappointing.

This small collection of principalities – hosting all of 2.5 million souls at last count – remains one of the most economically divided, socially backward and culturally anxious of any in a nation that stretches from the Atlantic to the Pacific and up to the Arctic Circle.

Although we are the putative birthplace of Confederation, we consistently maintain the worst track record in the country for interprovincial free trade. In fact 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.

Sometimes, we litigate those who challenge the status quo, even if they had no intention of doing so.

Consider the shameful case against one Gerard Comeau who – not realizing he was on the wrong end of the judicial system – was caught crossing the border from Quebec into New Brunswick with 14 cases of beer and three bottles of liquor in 2012. According to an antiquated Prohibition-era law, that’s still a criminal offense, punishable by fines and jail time.

This summer, Mr. Comeau was on trial for violating the New Brunswick Liquor Control Act, which states that individuals are permitted to bring one bottle of wine or liquor or 12 pints of beer into the province at any given time.

According to a CBC analysis of the historical context underlying the case, “The Canadian law regarding the shipping of alcohol was meant to thwart bootleggers, and led to a gradual devolution of federal responsibility to the provinces in matters relating to liquor. Each province established an agency that oversees the distribution, sale and consumption of wine, beer and spirits.”

According to more than one legal expert, the regulation is both anachronistic and absurd. Declared Mark Hicken, a Vancouver attorney who specializes in interpreting Canada’s quirky interprovincial trade regulations: “A lawyer down in California once said to me, ‘You can’t understand any North American liquor laws unless you trace them back to Prohibition.’ You look at any regulatory structure in North America and if it was examined in a global perspective, you’d look at it in stunned disbelief, like ‘What is going on here?’ It really does go back to the Prohibition mentality of control.”

This mentality of control extends far beyond regulated substances in Atlantic Canada. It has to do with energy agreements, food, real estate and river rights. In fact, it has to do with how we live and work each and every day in a region where ancient, restrictive provincial laws concerning commerce and labour mobility no longer apply but are still rigorously and ludicrously enforced.

Unless we break these structures down to the ground, we will always be, in this region of Canada, our own worst enemies.

We will never be able to be winners in our own backyards. We will never be able to sell to one another, to support our friends and neighbours with jobs and entrepreneurial opportunities, to become the fiercely independent, yet the friendly, folksy and integrated Atlantic Canadian community, we have managed to persuade the rest of the country that we are today.

Our four provincial solitudes must finally come together in common cause. We need each other’s passions, energies and ideas, if only to tightly knit the best of our reputations with the truth of them.

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Fun and games with fanciful figures


David Chaundy of the Atlantic Provinces Economic Council (APEC) asks a question of such thoughtful irrelevance, it’s stunning that no other professional numbers-cruncher has, to my knowledge, raised it.

If you had $56 billion what, would you do with it?

Mr. Chaundy’s challenge to readers of one of his recent commentaries for APEC is equal parts whimsy and gravitas; it stems from a metaphorical gauntlet he threw down to delegates to a recent business outlook conference.

The context, he writes, is the federal government’s Fall Fiscal Update of November 12, in which the finance department “revealed a projected $56 billion in surpluses over the next five years, beginning in 2015/2016. . .Since the government is not going to make you and your friends into overnight billionaires, how would you use these projected surpluses to advance Atlantic Canada’s economy?”

There is, of course, a catch. The feds have already committed to spending $26 billion over five years by introducing the Family Tax Cut, or income splitting ($10.3 billion); increasing the family child care benefit ($13.4 billion); raising the limit on tax-free savings account contributions ($2.3 billion); and investing in infrastructure ($1.3 billion).

That leaves you with a mere $30 billion with which to go to Hawaii and, as the accountants say, get permanently lost or, in the alternative, save the Atlantic Canadian economy for Queen and country.

The honourable route is not as easy as it looks, but Mr. Chaundy embarks jauntily, nonetheless . “Adjust transfers to the provinces,” he advises. “Ensure sufficient infrastructure funding (and) focus on globally competitive innovation.”

Regarding his first prescription, he notes astutely, “By tying the size of transfer programs such as Equalization and the Canada Health Transfer to the growth in the overall economy, the federal government has provided itself with greater fiscal certainty and largely insulated itself from the fiscal impacts of population aging. This is not the case at the provincial level.”

Mr. Chaundy endorses the Parliamentary Budget Office’s recommendation to restore the Canada Health Transfer growth rate to six per cent and factor a sliding scale of regional benefits based on provincial age demographics. Such moves could mean an addition $500-600 million to the Atlantic provinces over the next five years.

As for infrastructure, he writes “The Canadian Centre for Policy Alternatives estimated that underinvestment in infrastructure in Canada amounted to a gap of $145 billion: Canada needs to spend $20-30 billion a year for ten years on top of current spending to return infrastructure spending to historic levels.”

Atlantic Canada’s portion could amount to some $670 million annually if the funding formula was a per-capita calculation. “But if distributed according to need, the Atlantic provinces would receive proportionately more due to the region’s older infrastructure.”

Finally, on the subject of innovation, Mr. Chaundy is as clear as every other economist in the developed world: No amount of spending on social services or, indeed, infrastructure will actually goose a jurisdiction’s earned incomes and overall net worth. “What is critical for the region’s growth are firms that are export oriented and that have differentiated their products and services in the global market through their proprietary technology, specialized competencies or superior quality of their products or services.”

Mr. Chaundy suggests the federal government ponies up an additional $1 billion a year. (That’s not, in fact, a heck-of-a-lot when you consider the several, different diverse economies functioning within individual provinces. Does Newfoundland and Labrador’s offshore oil and gas industry resemble, either in the skills it requires or the technology it deploys, anything remotely comparable on Prince Edward Island?)

The new money could be used to help businesses leverage private sources of funding for innovation, technology commercialization, strategic alliances, mergers, and expansions.

All of which makes eminently good sense and, in fact, always has.

For several decades, two of Atlantic Canada’s great fiscal burdens have been the cost of providing for its disproportionately older workforce and comparatively ancient infrastructure. Both have siphoned off public money that might otherwise have been spend on economic capacity-building exercises of the type Mr. Chaundy describes.

Still, these mind experiments always remind me of those times when, in weak and weary moments, I daydream about winning the lottery.

Let’s see. . .If I had a million dollars, $10 million, $50 million. . .what would I do?

Something or someone always arrives to shake me out of my reverie.

This time, it’ll be falling oil prices.

Hello resource economy.

Goodbye surplus city.

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Fat and poor: What’s not to love about the East Coast?

Evidence of Atlantic Canadian exceptionalism mounts with each day that passes. Judging from the headlines, our position within Confederation has never been more secure, our role never more crucial.

Do we serve the rest of Canada as both the butt of their jokes and the source of their ire? Of course we do, and with brio, mister.

Merely consider the following from the Globe and Mail, Canada’s self-assured, self-identifying “national” newspaper, the other day:

“The number of obese Canadians has tripled since the mid-1980s, a phenomenon driven by a sharp rise in the number of extremely overweight adults whose health complications are expected to place a heavy burden on the health-care system.”

And where, pray tell, will we find the highest rate of corpulence in Canada?

“(The) burden is not spread evenly, with the highest proportion of obese adults in the Atlantic provinces and the lowest in wealthy and healthy British Columbia, according to a new study that predicts the country’s weight problem is only going to get worse, especially in the fattest provinces.”

What’s worse, the piece goes on to say, “the study warns that, if the trend continues, more than one in five Canadians will be obese by 2019. In five provinces – Newfoundland and Labrador, Nova Scotia, New Brunswick, Saskatchewan and Manitoba – there will be more adults who are overweight and obese than adults who tip the scales at a healthy weight that same year.”

Oddly, there’s no explanation for why Prince Edward Island, alone among East Coast provinces, is missing from the list. It’s conceivable that with a smaller population than Metro Moncton’s, the Island failed to impress itself as a province upon the study’s authors, one of whom is, herself, a resident of Atlantic Canada.

“We have a growing number of these people (overweight and obese) and we haven’t really sorted out the treatment. ” Laurie Twells, a prof in the faculty of medicine at Memorial University in St. John’s. “We’re not actually curing it (obesity). We haven’t managed to help people lose weight and keep it off, other than through something like bariatric surgery.”

Now, as other research links obesity with straightened socio-economic circumstances, it should come as no surprise to anyone that Atlantic Canada is not only home to the nation’s highest proportion of fat people; it’s also home to the highest proportion of poor ones.

According to Statistics Canada’s The Daily a year ago, “the income gap between the top one per cent and the rest of filers has widened over time. In 1982, the median income of the top one per cent of filers was $191,600. This was seven times higher than the median income of $28,000 for the other 99 per cent of filers. By 2010, the median income of the top one per cent of filers increased to $283,400, about 10 times higher than the median income of $28,400 for the rest. The income of top filers was increasingly dependent on their jobs, rather than on investments.”

Meanwhile, “in 2010, four provinces – Ontario, Alberta, Quebec and British Columbia – accounted for 92 per cent of the 254,700 people in the top 1 per cent.

Ontario had 110,300, followed by Alberta with 52,200, Quebec at 42,600 and British Columbia with 29,500. Between 1990 and 2010, Alberta’s share of the top 1 per cent of filers doubled from 10 per cent to 20 per cent, while Ontario’s proportion fell from 51 per cent to 43 per cent.”

The only reason why no Atlantic province gets a mention is that the incidence of conspicuous wealth in the region is so rare, it’s statistically insignificant.

On the other hand, reported the Globe last year, “new data shows the share of individual income that comes from government transfers is highest in the Atlantic provinces. Three of those provinces. . .receive slightly more transfers than the total taxes they pay. The main factors appear to be higher unemployment in Atlantic Canada – but also an older population.”

Uh, no kidding Sherlock.

To be sure, though, we along the seabound East Coast might yet salvage some dignity. A new Scotiabank poll finds that Atlantic Canadian small business owners are more inclined than their counterparts elsewhere in the country to work until they drop.

That, too, makes us special among our countrymen.

Still, who’s complaining? As long as it keeps our minds off the junk food.

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