I am in St. John's this week on business. First time here. That is the reason I am tardy with the podcast edition. Anyway,
here it is.

This is a serious question. I have been meeting with government officials the past couple of days and this issue keeps burning in the back of my mind. Someone please provide an answer based on some knowledge of the question.

Why wouldn't the Prime Minister of Canada get on a plane with the Premier of New Brunswick and go visit Company X (a huge lead let's say) and pitch the merits of investing in this province?

Because I don't really buy this argument that it wouldn't be 'fair'. Ontario is running TV spots in global markets and advertisments in some of the most read publications in the world. Quebec the same. It seems to me that the larger provinces in Canada might not even need the PM on an investment visit. But smaller provinces like New Brunswick, with no international brand, having the PM and the country in question ambassador opening the door, I bet that they could get a meeting with Volkswagen or Microsoft or Nokia or Tata or whatever.

It just seems to me that the PM would accrue so much good will by doing a few of these each year - I can't believe it doesn't happen. Why the PM doesn't want to associate directly with efforts to fix NB's economic problems is a mystery to me. Helping site a 1,000 person manufacturing plant in Bathurst would endear him far more to the people of Northern New Brunswick than just about anything else he could do.

The top Geek on Ice (no diving here) has been pushing the idea of an NB IT association. One of the older veterans of the NB IT scene, has some concerns.

I am of a mixed mind on this. There are reasons why a provincial association has never worked in the past. Plus, if all the association does is set up golf tournaments and publish a directory - there's not much there.

I would rather we built a strong provincial strategy to grow the IT industry through attracting good firms and helping to foster an environment where local IT players can expand. An association could be a part of that.

Here is the latest report on the animation software industry in Canada. When your industry is not even big enough to register with less than 1% - there's not much here.

Unbelieveable. I don't know what is more annoying. All the diving in the NHL these days or the Elections NB advertisments.

On the former, I remember three guys trying to take down Mark Messier and he dragged them along. You couldn't knock down most of those old NHL stars with a bazooka. There were a few guys known for diving but it was almost a dishonourable thing to do. Now these guys - Crosby is the king of this - dive for a living. Sidney Crosby has the upper body strength of a horse but can collapse on cue. It's tough to watch.

On the latter, I don't know if you have seen these Elections NB advertisments promoting the importance of voting in local elections. They use cute skits to tell us all these reasons why we should vote - and the economy is not mentioned.

So much for alignment. Someone should call up Elections NB and say the primary reason to vote should be to put in a team of local leaders that can help make the community attractive for business investment and expansion.

It's almost like any possible interest in economic development has been systematically bred out of the New Brunswick civil service - with the obvious exception of Business New Brunswick.

I still think this is a huge impediment to economic development. When you have the Deputy of the largest department of government disparaging any attempts to have her department think about economic development, when you have Elections NB listing all the important reasons to vote and the economy is not one of them and when you have NB Power not mentioning economic development or even hinting at it in their annual report - it's a problem. A serious problem.

All of these institutions - at least in some small way - can have a positive impact.

PwC is nice enough to provide us with a list of all digital media and animation incentive programs in Canada. BC, Manitoba, PEI, Nova Scotia, Quebec and Ontario all have lucrative incentive programs to promote this industry in their jursidiction (check it out some can be very lucrative).

New Brunswick has no programs according to PwC.

I think this is a bit of a shame. New Brunswickers are a creative bunch (IMO) and this type of work can be done anywhere (think FatKat). The wages are higher as well and most people find the work engaging (based on what I read on this).

I am not saying that incentive programs are the only thing that matters but if Ontario is dangling millions or PEI or Nova Scotia in front of companies, it's hard to be competitive.

A Nova Scotia research group will look for deep coal deposits and saline aquifers in northern Nova Scotia and Cape Breton as it studies the possibility of carbon capture and storage to reduce greenhouse gases. The federal and provincial governments announced $5 million in funding at a Halifax press conference on Wednesday for the research project. The project will be directed by Nova Scotia’s Carbon Storage Research Consortium, a group that includes the provincial Energy Department, Nova Scotia Power and Dalhousie University.
Nova Scotia announced a tidal research effort a couple of months ago. They announced funding for biofuels from waste plastic and now stealing a page from Alberta wtih carbon capture research?

This is good stuff.

Another big research win for New Brunswick.

Gotcha.

Today Royal Galipeau, Member of Parliament for Ottawa-Orleans and Deputy Chair of Committees of the Whole House, on behalf of the Honourable Jim Prentice, Minister of Industry and Minister responsible for the National Research Council of Canada (NRC), the Natural Sciences and Engineering Research Council of Canada (NSERC) and the Business Development Bank of Canada (BDC), announced the winners of a special $15-million nanotechnology research funding competition. Five projects will be funded over three years. BDC assessed the commercial potential of the proposed projects and will help the researchers move their technologies toward commercialization.

The five winning teams combine the expertise of NRC researchers from several disciplines with collaborators from 14 academic institutions: Concordia University, Ecole Polytechnique de Montreal, McGill University, Queen's University, Simon Fraser University, Universite Laval, Universite de Sherbrooke, University of Alberta and Concordia University College of Alberta, University of British Columbia, University of Ottawa, University of Toronto, University of Victoria and University of Waterloo. Each research team has also secured industry support.


Hey, be nice. We just got some more call centre jobs last week.

Alfa Romeo, the Italian sports car best known as Dustin Hoffman's runabout in The Graduate, is returning to North America, and Ontario is making a strong pitch to persuade the company to assemble cars in the province. Sources said the Ontario government has held a series of meetings in recent weeks with officials from Fiat Group, the Italian auto giant that owns Alfa Romeo, Ferrari, Maserati and other brands. "Ontario is aggressively selling itself," said a source familiar with the talks.
Does anyone know if Greg Byrne is making a 'strong pitch' for this plant?

Anyone?

Bueller?

I listened to an interesting podcast yesterday on the way to Halifax. It was a BBC documentary talking about the "on the sick" trend in OECD countries. The OECD has done research that concludes that while long term unemployment has dropped significantly in the past 10-15 years, the number of people on disability or some other health-related pension has doubled and even tripled in some OECD countries. In the UK, the government now spends far more paying for people that are "on the sick" than on the dole.



The experts quoted in the piece were pretty negative about the whole thing. They basically conclude that people who are unemployable or not mobile are migrating to 'on the sick' pensions to generate living income. They also called this a serious social problem as there are studies that show people that don't work over time die sooner, are more prone to depression, are more prone to poverty, etc. Essentially, NBT close your eyes and scroll over this part, they were calling for long term structural government subsidization for people like this to help them work. Apparently they are doing this with some success in the Nordic countries. The logic is that somewhere around 80% of those currently "on the sick" could work - at least certain jobs and at least some time during the week. The government would subsidize the training and wages of these people to help them become productive leading to better social outcomes.

This is a European version of the workfare programs that were rolled out across the U.S. in the 1980s and early 1990s.

I have always wondered about this in New Brunswick. I think I will take some time to do a little analysis of this for either this blog or my TJ column. I have seen that seasonal EI usage has hardly dropped in the past 10 years. I will check the workers' comp and other disability figures and then see the results. I know that social assistance recipients in New Brunswick have dropped over the last 10 years.

The point here is not to be heavy handed. In my way of thinking a lot of structural unemployment came about when we had high unemployment rates and now that the unemployment rate is much lower, we still have significant underlying unemploment problems. And, further, I have always felt that it is a drag on the economy to have upwards of 200,000 adults (compared to an employed workforce of 350,000) either collecting EI, workers' compensation or social assistance during the year. It seems to me that we should be looking at ways to encourage more year round employment and work for those who are able to work.

Notice the small biz/big biz comment. My work here is done. I shall move to the planet Vulcan to promote green economic development.

I just heard that a couple of people I have a lot of respect for in Saint John were not very happy with my recent comments about the Benefits Blueprint for that city. It's frustrating for me that when you raise questions about anything, instead of seeing that as positive feedback, people in this province almost always view it as some form of partisan criticism.


The truth is I am happy with what I saw in the Benefits Blueprint. The full study was not released so it is impossible to critique the data. My only concern is that a) the boom cycle they are forecasting is unprecedented in the history of New Brunswick and b) after that boom, the remaining jobs will be relatively limited. As a result, I am calling for efforts to leverage the energy hub into a broader, longer term economic development plan. This could include energy research investments, policies to develop and make available low cost industrial power to attract industry, etc. I am not poo-pooing the BB. If the people of Saint John want this, I am fully behind it. I have been involved with a number of projects in the Saint John region and I feel I have am personally invested in the community's success. Any commentary I make is with the best of intentions.


The same can be said for Business New Brunswick. A couple of exBNBers have told me lately that sometimes my comments are viewed harshly by some inside the provincial economic development group. Be clear about this. I want more resources for BNB - not less - I want a broader mandate not a lessened mandate and I think a successful BNB is key for the province's economic future. I just may disagree with some people on what BNB should doing.

It's sad to say that in this province if you want a discussion on things you have to go right to the polarity of the issue. It's either hard right (AIMS) or hard left (David Coon). Everyone else is parsing their words to make sure they don't offend anyone. The Energy Hub should be debated - broadly. Moncton's economic development should be debated - broadly. Same for the North.

I want to be part of that debate but if I alienate potential consulting clients I may end up debating from the metaphorical Siberia.

I enjoy the commentary from an up and coming ABC journalist in the U.S. named Jake Tapper. He writes a daily blog and adds a little humour to the equation.

On one of the Sunday talk shows, he floated the idea of scrapping 'debates' in favour of 'war gaming'. Essentially, his idea was that each candidate would be given a series of real world scenarios and would be asked to address them (with their team). Their decisions would be fed into the computer program (I did some of this in college) and they would be scored on their effectiveness.

Interesting idea. More of a joke really but I got to thinking that this approach would force candidates to get beyond rhetoric.

I received a newspaper sized brochure in the mail today from Health Minister Mike Murphy on the Provincial Health Plan 2008 -2012. Murphy has been known to be a reader of this blog (at least while in Opposition) but I have to say that I am not sure why we have to serve up such over the top language. In the introduction to this report, it states "....tranformation of health care in New Brunswick into a system that the rest of the country will admire and want to imitate.".

This is the same as the "worst to first" in education, or the post-secondary system that will be the envy of the rest of North America, etc.

I think most New Brunswickers would be very happy with average. Just plain average. We have among the worst health care in Canada. Getting us to average would be a huge goal. We have the worst test scores in standardized testing in Canada. Getting us to average would be a huge goal. Our post-secondary system has hardly been touched in 40 years. Just some basic reforms would be a huge goal. Economic self-sufficiency? I'd take limiting our need for Equalization over the next few years.

Does anything - including the Minister - think that in 2012 (at the end of this plan), other Health Ministers are going to 'imitate' New Brunswick?

If you shoot for the stars and reach the moon, that's failure. If you shoot for the moon and hit it, that's success.

Right now, I'm just looking for a government that will get off the ground at all.

Here is the weekly podcast edition of the It's the Economy, Stupid podcast. Hope you like it.

I just got a flier stuffed in my door from a prospective Councillor in my Ward. I won't mention the person's name because I don't want to be personal. However, I was once again vividly reminded of how economic development just isn't on the radar for so many politicians. They give it lip service (some of them) but this person didn't even do that. A four page brochrure with a list of things he/she wants to get done and not one even touches on economic development with the possible exception of planning for the 'effects of global warming'. A city councillor that doesn't even mention anything related to economic development but he/she wants us to get prepared for global warming effects.

Look folks. Take my advice. If anyone comes to your door soliciting your vote, pin them down on what exactly they want to do in the area of economic development. Ask them what they believe the role of city hall is in this area. Ask them how much of the budget should be dedicated to it. Ask them what specific industries they would like to see fostered in the community.

If they can't answer any of these questions with a semblance of cognition (still reeling from the assessment that this blog is written at a Grade 3 level), then find someone else.

This stuff is way to important. If councillors want to get ready for the effects of global warming, they should move to the north pole. I want city councillors that want to deal with the effects of living in the embers of a 1990s economic development policy.

He was in Cape Breton on Wednesday telling people - For every situation, there is some bad and some good, McKenna said, but people have to focus on the good. “The helping hand that you’re looking for here, as well as across the region, can be found right at the end of your own arm,” he said. “Nobody is going to come in and do it for us. On the other hand, nobody but nobody ever walked in and put a spot on our forehead and said you’re a doomed and disadvantaged people.”

He was in Saint John on Thursday telling the TJ "It would be an extraordinary act of leadership if we were able to get all of the Atlantic provinces moving together, creating a very significant reduction in taxes," he said in an interview with the Telegraph-Journal Thursday.
"While individually we can make some incremental progress, we could make so much more progress together."

He has become larger than life but I wonder if he has ever spoken candidly about his own misgivings about New Brunswick during his tenure? About the fact that population decline really started under his watch (the 15 year string of consecutive years of net out-migration started in the early 1990s). About the fact that beyond call centres his ED efforts had limited success. About the fact that his government was not able to craft a sensible economic development policy for northern New Brunswick. And, most importantly, why he was not able to permeate a culture of economic development throughout the civil service. After he left, the whole thing went down like water out of a tub (at least the enthusiasm for attracting business investment to the province).

I like his ambition for the Atlantic Provinces. And I think he was a good Premier. But I think many of the things he couldn't address in 1988 are still plaguing us in 2008 and he should be talking about that.

I just listened to a very good NPR podcast called "Taxing the Poor". It's very interesting and I agree with the overall premise. They look at Alabama (but most states and provinces have this) and all of the taxes that hurt disporportionately people at the lowest end of the economic spectrum. Sales taxes are a good example. The rich and the poor pay the same tax on a can of pop - but on a percentage of income basis the poor pay a much higher rate.

I don't know how this translates to Canada which has HST rebates, child tax rebates, etc. designed to mitigate this effect somewhat on the lower end of the spectrum. It's my feeling that in Canada these taxes (sales, gas, property, fees) hit the middle class far more here than in other places. Once you get just beyond the HST rebate, child tax rebate levels, you are being taxed on all these items full bore and you have property tax and of course provincial and federal income taxes for which the highest marginal rate, I would argue, hits people in the maybe 'upper' middle class.

But that really wasn't my point. I was disappointed when the journalist brought the $800 million in tax breaks for the recent steel plant into the equation. The poor people that were interviewed were outraged by this. They were livid that a large German firm could get massive tax breaks while they couldn't buy bread. I thought the thing was completely skewed. What about the 2,000 high paying jobs for Alabamans? What about the fact that the taxes wouldn't be paid either if the firm had chosen South Carolina or New Brunswick? It's a complex issue, I don't doubt it but NPR played fast and loose with this issue and at the end it was flat.

At some point, somebody has to show the link between economic development efforts and helping the poor, helping fund social programs, helping raise the economic standard of living.

I knew someone with a Skoda back in the 1980s:

Aiming to produce 1.5 million cars with 10 years, Czech car manufacturer Skoda Auto said April 16 it would more than double its production. "Skoda Auto plans to produce 1.0 million cars by 2012 and, on condition that the world boom continues, we could reach 1.5 million cars in 2018," the biggest car producer in Central Europe and member of the Volkswagen Group said. Skoda Auto was unable to confirm details of how the production increase would be divided between its Czech and foreign plants.

We know they are producing in low cost countries but are they planning to get in under the NAFTA? Giddyup.

I had a couple of good conversations recently that have confirmed my belief that we need a little more 'entrepreneurial spirit' injected into our economic development efforts. And I am not talking about Gerry Pond's latest attempts to raise interest in entrepreneurial development. Although, as a side, it is interesting to see the style of Shipley (TJ) versus Eric Lewis (T&T). Lewis leads with:

Gerry Pond believes companies that are bound to have the biggest impact on the New Brunswick economy are not those that come from outside the province but are those created from the ground up, right here in the province. "Locally-based entrepreneurs are going to add more value," he says.

Shipley leads with:

Technology business guru Gerry Pond says New Brunswick must reinvent itself as an innovative province by nurturing a new generation of entrepreneurs. "We need new value created in the economy," said the former NBTel and Aliant executive and serial entrepreneur.

I have never seen a better example of the attitudinal difference between these two publications.

The key point here is that Pond wants to foster more 'entrepreneurship' and on that front he is to be commended. His side swipes at the puny efforts to attract firms from outside New Brunswick are beside the main point. The T&T, however; decides to make it the main point.

Kudos to Shipley and as for Lewis, he would be wise to read some of the former's writing on this issue.

But back to my main point which is entrepreneurialism in economic development. I am all for research and planning but eventually economic development departments/agencies just need to get out there and do it. Plan it, resource it, fund it and go out and get it done.

When Kevin Bulmer back in 1990 saw that Omaha was attracting 'telemarketing centres', he did his homework. He found out that deregulation was driving down long distance charges and 1-800 numbers were changing the landscape. He also figured that NB's large bilingual workforce (14% unemployment at the time), good telecom and lots of empty buildings (like the Eaton's distribution facility in Moncton) would be a good value proposition for these firms. He ran the idea up the flagpole, his bosses bit and within weeks, Frank McKenna was on a plane out pitching NB for call centres.

We can't study things forever and we can't take have or even one quarter measures. The game is becoming highly competitive. Some guy at NSBI has a hunch that Bermuda hedge fund firms could be attracted to Halifax so he gets permission from Lund to get it done and goes out and gets it done. Same with Slemon Park on PEI. They said the Atlantic Technology Centre in Charlottetown would be a failure. Governments shouldn't be in the real estate game, they said. It's packed full and they are building another one.

In my book, the last great rainmaker economic development initiative in New Brunswick was started 18 years ago. It has created 22,000 jobs and been an overall success. But 18 years is a long time to go without a winner. We tried elearning (I hear it is making a comeback) but that just led to a dozen failed ventures all backed by government grants/loans. The province made some limited efforts in the area of IT generally but with very limited outcomes. There was some attempts to foster manufacturing, but again, with very little success.

We need a few rainmakers. Energy might be one. But it can't be the only one. Unless we use 'cheap' energy as the foundation for a broad industrial development effort.

I say to the province pick a few and go for it. Data centres, elearning, translation, food, higher value back offices, animation, nearshore IT services, auto, aero, bio, nutra, something and just go for it. We may fail but we need to seriously try. Just scratching the surface will get us nowhere.

And if Gerry Pond truly thinks that we can do all of this without attracting a few anchor, global players, I must emphatically disagree. We need more entrepreneurs, that is true but we also need our fair share of the big boys.

I hope they learn from this guy.

The Greater Halifax Partnership's Fred Morley was in town at the invitation of the Miramichi Community Action Committee, a group mandated by the government to find ways to help the Miramichi pull itself out of its recent economic hardship.His organization,the Greater Halifax Partnership, helps create links between businesses, government and the community to retain and expand existing businesses in the Halifax region, as well as attract new investment. Halifax managed to recover from a slump brought on by the loss of thousands of government jobs, and it was hoped that Morley might share some wisdom that would give the struggling Miramichi a boost. Morley thought the same methods that worked in Halifax would work in Miramichi. By organizing themselves, deciding on a common goal and identifying and making use of all available resources, he said, the region could take control of its economic destiny and lead its own recovery.