Tag Archives: Atlantic Institute for Market Studies

Small business to the rescue?

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We could put aside any thought of rational problem solving and simply erect a wall along the perimeter of our fair province. Henceforth, anyone who wants to travel in, or through, New Brunswick must fork over fifty bucks.

After a few dozen years, I figure, the provincial debt will be settled, the wall paid for, and the 346 people who stubbornly remained, like crumbling Flowerpot Rocks, almost never worry about a guaranteed minimum income in their golden dotage.

Failing this eventuality, though, we’re stuck with what we have – a province that, last month, lost 5,700 jobs and posted its highest unemployment rate since the Great Recession. That’s not to say we are entirely bereft of ideas.

John Chilibeck, the Saint John Telegraph-Journal’s legislature staffer did the province a small favour the other day by asking leading pundits and academics what they would do, if given the chance, about New Brunswick’s ailing economy.

“Fixing the economy is the central question today,” said Marco Navarro-Genie, president and CEO of the Atlantic Institute for Market Studies. “Obviously, there are more important things than money. But in order to take care of more important things that we love or are fond of – family, education, health – it’s hard to imagine how that can done without an economy. How do we stop our children and our grandchildren from feeing the place seeking opportunity?”

How, indeed?

There is, of course, no consensus. How could there ever be? But one approach that warms the cockles of my self-employed heart is a renewed commitment to supporting small-time entrepreneurs.

You remember those folks? Once, not long ago, governments fairly tripped over their double-wide brogues seeking to curry favour among members of the enterprise class – the reasoning being that if you can’t supply enough jobs in the economy, create the necessary conditions for people to create their own.

A federal government report published a few years ago stipulated that “The birth rate of new firms that have paid employees is consistently higher than the death rate, which means that the pool of businesses with entrepreneurial potential is being replenished regularly. The birth rate improved from nine per cent in 2001 to approximately 12 per cent in 2006. Canada compares well in this regard with virtually every country.

“New firms in Canada have high survival rates at both the one-year and the five-year point. Again, Canada compares well with the other countries. The proportion of Canadian manufacturers that are rapidly growing rank among the best (in the world).”

The study continued: “With respect to Canadian small and medium-sized businesses (SMEs) and their owners, between 2003 and 2008, there has been an increase in the percentage of working Canadians who are self-employed and own an incorporated business. Canadian SME owners are becoming more diverse and more educated, and this trend is likely to increase the number and the innovativeness of new businesses.

As Pierre-Marcel Desjardins, an economist at UdeM, argued cogently in the T-J piece, “The big projects are sexy and if they work, fantastic. But economic development isn’t always a grand slam; it’s a marathon. You’ve got to look at three, four, eight jobs being created here or there. If you only have a few very large employers, you’re vulnerable.”

In other words, let’s start considering what’s actually scalable in a province as small and modestly equipped to handle big or sudden growth as New Brunswick.

In the end, putting all our eggs in one or two economic baskets makes about as much sense as erecting a wall around the province and charging an admission fee.

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Are government workers servants or syphons of prosperity?

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Do civil servants in Atlantic Canada earn too much money for what they do? Are too many of them routinely showing up at the public trough?

These are two, separate questions, and as provocative as they are, they tend to conflate in the hands of traditional, market-driven advocates who are convinced that small government – in the absence of no government, at all – represents the best of all possible worlds.

Almost no one, these days, talks about efficient government, a notion that once held a place of prominence in the thinking rooms and chat parlors of the early 1960s across North America – and, of course, never again.

But does efficient government mean fewer workers doing less work or a greater number of workers doing more important work?

The Halifax-based Atlantic Institute for Market Studies (AIMS) is convinced that the regional economy will be improved by radically cutting its various civil services.

“In all four Atlantic provinces, the public sector workforce is significantly larger, relative to population, than the national average,” writes Ben Eisen, director of research, and Shaun Fantauzzo, policy analyst, at AIMS, in a recent commentrary.

“Furthermore, the gap in average compensation between public and private sector workers is larger in the region than in most other parts of the country. As governments across the region seek to identify strategies to control deficits and net debt, working gradually to reduce the public sector wage bill is one option that deserves careful attention.”

Additionally, they contend, “according to recent data from Statistics Canada, in 2013, the civilian public sector in Canada accounted for 18 per cent of all jobs nationally. By comparison, this figure is 23 per cent in Atlantic Canada, where all provinces exceed the national average on this metric. In Prince Edward Island, the figure is 23 per cent, in Nova Scotia it is 22 per cent and in New Brunswick it is 20 per cent. In Newfoundland and Labrador, 28 per cent of all jobs are found in the civilian public sector, the highest level in the country.”

To which an unaligned observer might wonder: So what?

Don’t these folks who work on the public dime also pay taxes, buy houses, enroll their kids in day-care programs, contribute to charities, underwrite the cost of their children’s university educations?

Are they not, in so many regards, just like the rest of us?

It’s not the salaries and benefits they earn, or even their numbers, that should concern us. It’s what they do with their time in the course of their daily duties. And that has everything to do with the frigid, disingenuous corporate culture they endure and to which they are too often inured.

Successive federal and Atlantic provincial governments have, in recent years, forced their bureaucracies to carry the water buckets of public opprobrium. After all, why not? Civil servants are easy targets, easily manipulated to do their political masters’ bidding on pain of various employment adjustment programs and other vile euphemisms for: “You’re fired and you have five minutes to clean out your desk.”

Now, we perceive in New Brunswick a wholly cynical move to buy public approval  by curtailing the legal bargaining powers of unions that represent civil servants.

Or, as the province’s duly appointed Czar of strategic review, Health Minister Victor Boudreau, told the Saint John Telegraph-Journal not long ago: “What happens in settling some of these wages is a bit of what they call a leap frog, where one province settles with a particular union. . .and then in the next province, their contract is up six months later, so they want to be two per cent higher than the province that just settled.”

Again, so what?

Should we not wheel this issue back to the central discussion where it belongs?

Which civil servants in Atlantic Canada earn too much money for what they do? Which ones arrive at the public trough with little or nothing to show for their slight effort to make an appearance?

The issue is not, ultimately, about big government versus small government.

It’s only about good government.

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