The Province has retained a bunch of the economic developers from the 1990s to help them with investment lead generation. I worked with most of these guys during my time at the Dept. of Economic Development and Tourism. I wish them well.

Those of you who have read my blog for awhile will have heard this story before. I was reminded of this theme when chatting with someone recently about biofuels. He told me that New Brunswick was one of the worst places in North America to produce agricultural product-based biofuels. We don't have the scale, scope or even proper climate. However, he said, we do have a strong and persistent agricultural lobby that wants the NB government to incentivize biofuels development.

I remember an old political strategist telling me his golden rule of politics. Never mess with the seniors or the farmers. Both groups are very strong and go to the deepest parts of society. Seniors are not only a large group but they have kids and grandkids so in a sense, if you piss off the Seniors, you end up pissing off just about everyone.

Way back in the 1990s, Frank McKenna floated the idea of making the snowbirds who spend the bulk of the winter in Florida get health insurance before they go. The reality was (and may still be) that a lot of seniors would go to Florida, get sick and then the costs would get charged back to New Brunswick Medicare. It seemed like a reasonable concept but I remember walking by the legislature when the Seniors - hundreds, probably several thousand, were protesting this with pickets and shouting down with McKenna. That proposal was dropped quick as a flash.

Then there was our old friend Bernie Lord. About three months after his election, I ran into an aquaintance who had gotten a job in the Premier's Office as some form of advisor. Anyway, this guy knew my interest in economic development and he pulled me aside to talk about Lord's plan. The first thing he told me was that Lord was going to deeply cut the subsidies to farmers. He asked me "did you know that farmers get a subsidy to transport cows to those islands in the middle of the Saint John River?" I said no but intoned that old saying of never mess with the farmers and the seniors, Lord, I was told, was a 'different' kind of politician. Fair enough.

First budget comes out. Lots of proposed cuts to agricultural subsidies. The farmers drive up to Freddy in their tractors, stage a large protest, Lord says he will 'study the issue' more and everything gets dropped.

Don't mess with farmers and seniors.

From Wednesday's Globe and Mail:


Ottawa drafts new deal for provinces
Tories willing to extend greater economic autonomy - such as allowing Quebec to negotiate unilateral labour deal with France
July 30, 2008 at 4:00 AM EDT

QUEBEC — The Harper government is prepared to let Quebec negotiate a unilateral labour-mobility deal with France, and is willing to provide each province with similar autonomy on economic issues, the Prime Minister's Quebec lieutenant, Lawrence Cannon, has announced.

In the clearest indication to date that the Conservatives are willing to offer exclusive arrangements for each province, Mr. Cannon signalled the Harper government is prepared to shift the way the national government works with its provincial counterparts.

Quebec offers potent political benefits for the minority government and with economic volatility affecting all provinces differently, Mr. Cannon said in an interview that it is time to deal individually with each province's needs.

While he declines to use the word "asymmetrical," Mr. Cannon concedes the effect of his proposed framework creates precisely such a landscape.

The collapse of a manufacturing base in Central Canada and Alberta's work force shortage mean each province's story has to be addressed through an autonomous approach. Mr. Cannon acknowledged the concept of autonomy is dear to Quebec nationalists in particular.



I have been calling for development of a new economic development partnership between Ottawa and NB that is unique to our situation. It is absurd to try and lump all the provinces together into these national programs when their situations are so individual these days. It seems that if Alberta, Quebec and Ontario need an "autonomous approach" maybe finally New Brunswick will get treated by the feds based on its unique circumstances.



Why is NB unique? I'll give you the top ten reasons:


1. It is not - regardless of what some say - going to benefit directly from oil, gas and other mineral revenues. There will be some - but only a fraction of other provinces including SK, NS, NL, AB and BC. NB's economic growth, unlike most of those other provinces, will have to come from some other location.


2. Our traditional industries are in decline. This is not a unique situation in Canada but it is unique in scope and scale. Over 8% of our GDP is tied directly to the forestry, for example, compared to less than 1% in Ontario. So the effect is much greater.


3. Our population is in decline. It went up slightly in the last year but the trend is downward.

4. We are starting to see some specific labour shortages despite a 9.6% unemployment rate. The pull of Alberta and now Saskatchewan is causing challenges.

5. We are not investing in industry sectors with growth potential.

6. We have the lowest level of spending on R&D among the 10 provinces in Canada.

7. We are not seeing the growth in higher wage, private sector jobs that will be needed to attract skilled workers from away.

8. Economic development spending as a percentage of both federal and provincial budgets in New Brunswick is well below the level it was a decade ago.

9. Northern New Brunswick.

10. Increasing dependence on Equalization.

So, for the feds to roll in with "Building Canada" and other national programs doesn't make much sense. It makes far more sense to establish a new economic development partnership where both governments invest, let's say $500 million each over eight years with the specific goal of making New Brunswick attractive for business investment and expansion. It would put serious dollars on the table to attract/leverage private sector R&D, it would help New Brunswick promote itself internationally but most important it would provide funds to invest in industry-specific infrastructure.

And, lest you think my dollar amounts are crazy, the feds just gave Nova Scotia almost $900 million more to go against the offshore royalties agreement and the feds spend close to $400 million per year on EI payments in New Brunswick - every year - I would think a fraction of that amount on economic development might be a good idea.

My TJ column this week discusses the proposed tax changes in New Brunswick. In a nutshell, I believe that the government should control spending - within the rate of inflation, try to keep corporate and personal income taxes competitive with other Canadian provinces (even if it means slightly higher consumption taxes) and strategically use tax policy to incentivize specific behaviours.

There will always be jursidictions that have lower tax environments. Applying a "how low can you go" approach to tax policy doesn't make sense in New Brunswick's context. If we were awash in cash, it would.

Don't forget there are something like a dozen U.S. states that do not charge any personal income tax at all. And Nevada, where my brother lives, doesn't charge any sales tax either. No income tax. No sales tax.

It was only a matter of time. Trying to profit from misfortune is as old as time itself. There are folks in the Miramichi that want to put direct flights from the Miramichi airport to Fort McMurray.


I wonder if these people understand that if they make it even easier for people to fly out to Alberta for work that more people will likely do it?


I also wonder if they understand the mid and longer term impacts of separating families for weeks and months at a time?


I wonder if they realize that in the long term, many people are just going to end up moving out there anyway.

I realize that there are mayors in Ontario proposing the same thing. I guess it is a "better than nothing" approach to economic development.

From a provincial perspective, we would be better off if they would start talking about putting a bus from the Miramichi to Saint John every day for the guys/gals that have the skills to work on these larger construction projects. Or even a bus from the Miramichi to Moncton every day (shades of Francis McGuire?).

Or better yet, why not try some serious economic development effort in the Chi?

It seems odd for an economic developer to be urging caution when it comes to cutting corporate tax rates. But that is exactly what I am doing. This new survey proves my point.

Halifax compared well with other cities around the world in a new tax competitiveness study by KPMG LLP. The study compared income tax, capital tax, sales tax, property tax, local business taxes and statutory labour costs faced by companies in 102 cities in 10 countries. Scores were determined as a percentage of total taxes paid by corporations in the United States. A lower score meant lower tax costs for businesses.

KPMG managing partner Greg Wiebe said in an interview Monday that Halifax and other Atlantic cities — including St. John’s, N.L., Moncton and Fredericton — that scored well in the study benefited from having the harmonized sales tax, which he called a true value-added tax.
"From a business perspective, there is no cost to a particular business," he said, noting that HST costs are borne by the end user. "That’s not true in other places. Cities under the HST have a very competitive rate." St. John’s scored 59.1, while Moncton scored 62.6 and Fredericton scored 62.8 in the KPMG study.

Vancouver scored 75.2, Montreal 83.2 and Toronto 85.4.

For overall business taxes, New Brunswick is already well below the larger urban centres in Canada. Don't make deep cuts to corporate income taxation. Use the money to invest in other areas that badly need investment such as R&D, energy and other infrastructure.

It doesn't matter how smart a person is, lots of things can cloud their judgement and application of intellect to the problems of the day (including myself although at a much reduced intellectual level). Take this Mark Milke fellow from the Frontier Centre in Calgary. He works for a think tank. Probably has advanced degrees and such and can still articulate an argument completely devoid of reason. Read his article and tell me what you think. It could be that I have my blinders on (suspect this is the case) but truly, the only question for Milke and everyone else in Alberta that sees red when people talk about their resource revenue is this:

The oil/gas revenue sharing deal in Canada - would lead to a civil war in Iraq. If that country were to divvy up the oil revenues the way Canada does - even through the circuitous Equalization program - it would be civil war.

In fact, I had a little look at this just for fun a few years ago - and in fact Canada system for distributing natural resources revenue is non existent. There is the back door Equalization system but the majority of Albertans even resent that. How about we scrap Equalization and divvy up the resource revenue like Norway.

Yikes.

I think guys like Milke would be far better off a) making their argument against sharing natural resource revenue using historical arguments - this bravado about it isn't based on reason and b) having a little class when reacting to journalists and others in poor provinces that do not have the luck of the Albertans.

P.S. - Equalization has nothing to do with hydroelectricity. It's just a very cheap source of electricity and that is why Manitoba can offer it more cheaply than other provinces. Why would they inflate the price and take away the one advantage they have?

Scroll down this article and read Lacey's comments. Is there another NBIF that I am not familiar with? Bernard Lord set up the NBIF to be the catalyst for his goal of getting New Brunswick from last to third among the provinces in Canada for R&D. Last time I checked we are still last. Now, the NBIF has been in operation since 2003. Over five years.

I don't blame the workers at the NBIF. It was an impossible goal but I think if New Brunswick is to drastically increase the amount of R&D (like old Bernie's goal of Top 3), they will have to drastically rethink this stuff. All the little tiddly stuff should become a secondary activity and the main goal should be to catalyze R&D by working with existing research organizations, private sector firms, etc. In fact, I think they should attempt to attract R&D projects from multinational firms.

Here is the latest podcast edition of the blog. Hope you enjoy it. We are talking about energy, economic development policy and infrastructure - among other things. Hope you enjoy it.

I guess I am just a hopeless (helpless?) romantic when it comes to this stuff but I have long hoped that New Brunswick would get back to the day when it saw electricity as an economic development driver and a key public policy tool to attract and grow industry. In the list of performance indicators for NB Power leadership released yesterday there was this one of interest:

Building a strong economy is important to all New Brunswickers. Management will
take an active role, working with business, labour and governments to foster
economic opportunities in the Province.

This is definitely Francis McGuire's influence on the board but I was hoping for much more (naively). Quebec Hydro has clear economic development mandate and actually talks about its role in supporting and growing industrial activity in the province using low power rates. Imagine if NB Power committed to that. Many (most) U.S. electricity utilities have an economic development office and many have a Vice President in charge of economic development. Imagine that in New Brunswick. In fact, many electricity utilities have performance indicators based on their ability to attract new industry to the jurisdictions. Imagine that. I think sometimes that NB Power would like to see less industry in New Brunswick, not more.

It will be very interesting to see what 'active role' to foster economic opportunities will be. One thing is for sure, there is lots of rhetoric to go around these days but I don't see a whole lot being done to address the structural challenges facing the province. And then there is that annoying unemployment rate which has crept back up to almost 10%.

I would like the province to carve off a chunk of its electricity capacity production (now and in the future) and set it aside at lower rates to attract and grow industry. In many jurisdictions this is done. It's all fine and dandy to roll all rate payers in as the same and even say that NB Power should put it to the industrial users but where do the jobs come from? We have had several major mill closures in New Brunswick and all stated high electricity costs were a key factor.

Finally, the problem with NB Power is us - residential users with electric heating. Let's face it. NB Power's hydro and nuclear power production (clean with almost no marginal cost of production) is enough to cover almost all of the base need of the province - residential and industry. In other words, if you take our summer need for power - both residential and industrial - it is almost completely covered by clean and cheap production. But in the winter, demand (for about five months), demand spikes up to double the summer levels and that is when NB Power is forced to purchase fuel and run its carbon emitting plants - at very high cost of production. Over 60% of NB homes are electrical heating and I heard recently that 80% of all new homes constructed are using baseboard heating. Why not? It's easy and cheap because we have structured our power rates to blend NB Power's cost of production at peak and baseload.

Don't blame industry for increasing power rates. It's demand is virtually consistent throughout the year. Without the huge peak for our heating needs, NB Power would be clean and cheap in its power production.

I just finished reading a long biography of Andrew Mellon, one of the so-called Robber Barons from around the turn of the last century. Mellon was a Pittsburgh banker who became what today would be a billionnaire by founding companies such as Alcoa and Gulf Oil as wel as the Mellon Bank (now the Bank of New York Mellon). I have been reading a number of this biographies in recent years: Roosevelt (both Teddy and FDR), Lyndon Johnson, Rockefeller, Churchill, Stallin, Trudeau, etc. I studied about the Robber Barons in B-School almost 20 years ago but this new book was very interesting.

A few points I found interesting.

1. His grandfather came to America via Saint John, New Brunswick.

2. Many of the largest industrial projects of the day were based in places like Pittsburgh but had much of their operations in the Niagara region (and eventually the Saguenay region in Quebec) because of their cheap power. Competitive energy costs has always been an important site selection factor and I think will be even more in the future.

3. While these guys were in many ways ruthless businessmen (surpresssing unions, cartelizing various businesses, etc.), at the end of it almost all of them gave the bulk of it away - Mellon, Carnegie, etc. Many (not Mellon) did so to keep their name alive for ever through charitable trusts.

4. Most great businessmen get in on the ground floor of the latest trends from steel to aluminum to oil to cars to computers to software to the Internet. I don't know how it is done but it would be very interesting to see more New Brunswick firms at the front end of some of these industries that are going to drive the 21st century - energy, environmental technologies, health care, entertainment, etc. We all sort of/kind of know the trends out there but how do we get there? I have to think that the universities should be key to this but there is definitely something in the Koolaid in a place like 19th Century Pittsburgh that led to all these great business ideas spewing forth. Don't get me wrong. Industrial Pittsburgh was a place of great contrast at the turn of the 20th Century - poverty, environmental pollution, urban/industrial fusion/sprawl, etc. but there was some reason why many of the great business ideas of the last century eminated from that area.

This should be a central theme in the discussion around economic development. I discuss it at a high level but I don't know if we have ever really had a genuine debate about it. What I am talking about is our longstanding tendency to treat economic development in the same way we treat social development in our society.

I heard the other day that the head of one of the larger economic development organizations in Atl. Canada said that they basically thought it was unconscionable to give a government grant or incentive to a company with no debt and a strong balance sheet. This thinking has bothered me for years but I have come to the conclusion that many many many economic development folks at the highest levels in government and in ED agencies think this way.

When it comes to social policy, we are looking to find ways to support those who need it. The unemployed, the single parent, the folks who are down on their luck. And so should we. Social policy should be about finding ways collectively to alleviate poverty and distress. Social policy should be about building infrastructure that helps people migrate out of a bad situation.

But we can't take that thinking and move it into the economic development realm. Even if it feels right to many of us. Intuitively it seems a bit creepy to give a company that is successful a grant or a government tax break or support with training, etc. However, have to find a way to get beyond these inbred ideas. Economic development is not about helping the poor and oppressed companies. I am sorry but if that is your model of economic development (and I would argue it has been for much of Atl. Canada for a long time) you are bound to fail.

In the Serengeti Plain of the business world, companies start up and fail - big and small. Governments shouldn't inject themselves into this process and start trying to prop up those destined to fail. I am sorry but this is a reality. Governments can and should use public policy to help establish a strong environment where companies can be successful (competitive tax regimes, access to skilled workers, good public infrastructure, etc.) but not try and ensure that success.

This is not inconsistent with incentive programs as well. I don't think incentive programs should be about funding companies that can't get financing elsewhere. I think maybe in some exceptional cases this might be a good idea but on the whole, if a business plan isn't strong enough to get access to profit motivated capital, how strong is it?

And I will say this and many people will not like it. I would rather give a million of taxpayer dollars to a large firm with a good balance sheet where the likelihood is that the province will get more than that million back in taxes in a couple of years than a million to a highly speculative project but that has some sentimental attachment.

I'll close with this. People that run and lead economic development agencies must understand the fundamentals of economic development. They shouldn't be in the business of risking public funds to top up shaky business plans of local residents. I would never say never about this stuff it out but I would position it as a general rule. Now, if there are business plans put forward to government for funding that are highly speculative but may be an interesting idea, maybe government should do a better job of trying to link up companies with risk capital. But that is not the same thing at all.

Imagine if the CEO of a company thought it was unconscionable to provide additional funding to its most successful divisions. Imagine if that CEO believed that it was the role of the leadership to try and prop up the underperforming divisions or to fund speculative ventures that were denied funding from lower levels of the organization. Again, in rare cases, this might be the right thing to do but on the whole that CEO wouldn't have much time left at the firm.

And yet many of our guys/gals in ED leadership think that way. They should go back to HRSDC or some other department where that philosophy is right on the mark. But they should stay out of economic development.

I just finished what I thought was an insightful column in the T&T on the economic challenges facing New Brunswick. They were written by Roger Haineault who works with a company called Tax Help Inc. - it would seem located in Moncton.

Until I get to the end:

The days of the large company coming in and building a factory employing thousands is gone in this part of the world. Employment, wealth and progress will be driven by the entrepreneur who creates a start-up that issues 50 T4s in his or her fifth year. These businesses are going to be in the service sector, and with the global economy they will work both here in the province and beyond our borders.


When I looked at the source - a guy who helps small businesses with tax returns - it seems clear that he is speaking from the perspective of what he knows. However, this continues to be the dangerspeak that I have heard for the two decades I have been involved in economic development in New Brunswick.

First, his initial sentence here is just plain wrong. We have attacted over 50 'factories' from 'large companies' all around the world. Whether you like them or not, these large customer contact centres are just that. The question should be how do we replicate this success in other sectors?

Second, his assertion that "Employment, wealth and progress will be driven by the entrepreneur who creates a start-up that issues 50 T4s in his or her fifth year."

This would actually be true if we had evidence of it in New Brunswick. New Brunswick has around 31,000 people that claimed on the Census to be self-employed. Many of these have a few employees working for them. Many don't. But they are the core of the small businesses in New Brunswick. And their average income (personally) is less than the average income of an employed person.

The truth is that most small businesses in New Brunswick are tiny and provide services in their local community. 53% of all businesses in New Brunswick have 4 or less employees. 93.2% have less than that magical "50 T4s" that the columnist talks about. 93.2%.

I am not downplaying them or being critical of them. I am one of them. Jupia Consultants. 2 employees. Providing service mostly in New Brunswick.

And the last point is this issue of doing business "beyond our borders". That is key. Efforts to stimulate more small business to compete with other small business in small local markets is not economic development (with some possible exceptions where there should be more competition). If you have ten small janitorial companies in Moncton and you put tax breaks and other efforts to encourage more you will just force others out of business or to downsize. The economic pie will remain the same.

Again with the exception of creating more efficiency, unless these mythical small businesses with 50 T4s that he is talking about are doing primarily their business outside of New Brunswick and bringing the economic activity back here, beyond the romantic notion there's not much to his assertion. And think hard. How many companies do you know that are in the 50 person range that export services (his word, not mine) to the global economy? Cripes we have a hard time getting our small manufacturers to complete globally - let alone our service providers.

There are some. Good ones. Environmental firms doing work in Central America. Training companies putting on courses in Africa. Animation firms building product for U.S. partners.

And I say we need to find these Gazelles and do what we can (if anything) to nurture them and their success.

But please understand the difference between the two. Because 30 years of policy designed to encourage New Brunswickers to 'start a business' as an alternative to being unemployed have not worked.

Someone pointed out to me that I should provide a link to my weekly column in the TJ. That's a good idea - particularly when the column is meaty - as it is today.

I talk about the lack of Masters and Phds in the province. We have the second lowest ratio of advanced degrees to population in Canada and compared to certain provinces by a wide margin. Ontario has almost three times as many persons with advanced degrees in math, science and engineering as New Brunswick.

Obviously the reason for this is not supply of folks with Masters/Phds. It's the demand. Our firms don't need those technical skills and the ripple effect is felt in a wide variety of areas.

This just reaffirms the need to link education policy and economic development policy. You can have the best post-secondary education system in Canada but if it is just providing feedstock for the Ontario labour market, what's the point?

I can't seem to figure out why governments will pour hundreds of millions into highway infrastructure each year but hardly a penny into ports, railroads, telecommunications and even energy infrastructure. I guess a few municipalities are investing in small wireless networks but overall it seems that the word 'infrastructure' has a very limited definition in Fredericton and Ottawa.

The truth is that while highways are important so are other forms of infrastructure. Quebec has invested millions in its railroads, hundreds of millions in its port (s). Ireland is building industrial parks with spec. buildings in the hinterland.

Even NB in the good old days was investing broadly in infrastructure. Like it or not both the Lepreau and Belledune power plants were built for economic development purposes. Now we hear that Lepreau 2 is likely to be all private sector and market rates. NBTel was a leader in Canada at rolling out fibre optics/digital. Now, as Aliant, I hear there are sufficient gaps in the network such that real data centres are an unlikely alternative for attraction to New Brunswick.

It's funny. Health care 'infrastructure' is a right and beyond discussion but economic development infrastructure is considered by many a needless waste of government investment.

And, in many ways, we are witnessing the results of that attitude. But look at the bright side. We'll have great highways and shiny new hospitals.

I have started to write this blog a half dozen times and then scrapped it because whenever you talk about language at all in this province you are bound to stir up raw feelings on all sides.

I have talked at length about the need to have more Anglophones learn French in New Brunswick. I have said that this is the only real way to ensure bilingualism remains an important feature of our community and culture.

But I have been surprised at the lack of Francophone public support for Anglophone bilingualism. Maybe they don't want to inflame old Anglo prejudices. Maybe some are worried that more English bilingualism will dilute the French language in the province. I don't know but I was thrilled when Donald Savoie, Louis Robichaud, et. al. came out with a position on the proposed French Immersion changes.

For 50 years, 'bilingualism' has been code for ensuring French language services and infrastructure in New Brunswick. It has never really been about encouraging Anglophones to speak French. We have French hospitals, French schools, French media, French cultural institutions, French government services, French Chambers of Commerce, etc. and I am not saying those are bad things. In fact, they are important and critical to the ongoing cultural evolution of New Brunswick.

But bilingualism now has to move out of the French silo and embed better in the English silo. In fact, we need to break down a bit of the silos.

Al Hogan at the T&T runs a lovely expose on Korean kids learning English in Moncton. Lovely. Do you think Al Hogan will ever run an editorial calling for more French language training for Anglos and immigrants that move here?

Never. Because the there are two camps. Two distinct camps. For the survival of both, we need to get into the same camp.

Francophones need bilingual Anglophones and immigrants to ensure the strong position of the French language.

Anglophones need to be more bilingual to ensure access to many of the best jobs and opportunities in New Brunswick.

So bravo to Savoie et al.

Someone told me the other day that their boss said he was very uncomfortable giving financial incentives to a company that had no corporate debt. He was very uncomfortable, in other words, giving taxpayer dollars to a company that "doesn't need it".

Now this may seem intuitively like an realistic statement but in fact it goes to the core of why much of our economic development has been such a failure in Atlantic Canada.

Don't confuse the issues. This is not about governments providing incentive programs. We can agree or disagree on the value of incentive programs and even on the legitimacy of such programs. That is not the point here.

My point here is that if we do provide incentives we have to provide them to companies that have good balance sheets and have good business models. Why would we risk taxpayer dollars on bad companies and suspect business models?

For many years -decades in fact - a lot of old school government economic developers believed that it was the government's role to step in when the private capital markets didn't fill a local need. Or it was their role to fund local companies that couldn't get bank financing or it was their role to be "lender of last resort".

As a result, a lot of government funding went to projects that had suspect business models, were not adequately capitalized or were provided funding because of political motivation.

In my opinion, putting aside the rightness or wrongness of incentives, if we are in the game, we should look for good companies with good business models.

The dirty little secret is that places like Atlantic Canada end up giving funds to tier two or three projects (in terms of quality) while places like Quebec and Ontario fund big name, well branded multinational corporations. Sure there is potential for those firms to fail but it is far more likely that a cottage cluster in New Brunswick funded with 60% government money will fail than a billion dollar auto plant in Ontario. It's just that when the latter fails it is more spectacular.

I am shocked at just how many people in the upper echelons of the 'economic development' system in Atlantic Canada really don't know the mechanics of economic development.

I talked with a young economic developer this week for a couple of hours. He hasn't been doing economic development that long but he told me that he felt there was a sense of self delusion among many economic developers in the province. He said they start to believe their own marketing shtick. Which, of course, is what I have been saying all along.

The message to the external market - business investors - needs to focus on our strengths and put forward our key attributes. The message interally needs to emphasize our weaknesses and how we can overcome them.

He, and I can't fault him, wondered about our value proposition for business attraction. He told me that the guys and gals doing investment attraction have the "hardest job" in New Brunswick.

I agree. 15 years ago, we were pitching a lower cost environment than the U.S. and now that advantage is all but eroded due to the rise in the Canadian dollar. We were pitching lots of available labour and that has been dropping as well (although the latest unemployment numbers are up to 9.7% unemloyment). We were pitching low cost power. We were will a lot of projects in an industry we had natural advantages in - namely call centres but we are at the tail end of the call centre boom and desperately seeking new industries where we can be competitive.

He, and I agree with him, said we need to be far more focused on building the infrastructure for New Brunswick to be competitive. On making key investments that will help NB have a competitive advantage in specific sectors.

What is infrastructure when it comes to economic development? Simple. It is investing in whatever will make New Brunswick competitive in specific industry sectors: R&D, people/training, physical infrastructure, etc.

For example. Some people have said to me over the last week that it is outrageous that the Tennessee goverment would give VW tens of millions of dollars to train their workers.

To me that's a weird way to look at things. The Tennessee government spends hundreds of millions each year on 'education' and 'training'. They invest in primary, secondary and post-secondary education infrastructure. Why? So that the people of Tennessee can have the skills necessary to be successful in the job market. Education is not some abstract concept. It is one of the pieces of the pie needed for people to achieve their social goals and a certain standard of living.

To give VW millions to traing 1,200 workers, in my opinion, is even a far better investment than giving the money directly to educational institutions. That training investment is tied directly to high paying jobs.