Man of inaction

Sorry I haven’t posted for a couple of days but I have been flat on my back with something sinister. Maybe the Lord smote me so that I would be kind to the self-sufficiency action plan announced yesterday.

Certainly, it would be tempting to react like the TJ did with it’s story entitled “Man of inaction”. the T&T was more kind with its “first step” reaction. After 14 months and four years in opposition, having another broad framework document is a “first step”. All I can say is that when Al Hogan turns on you, and he will, it will be hell on wheels. Shawn would be well advised to remember the 11 straight days during the 1999 election campaign when Al had a toll highway story on the front page to grind away at Camille.

I think my column this week in the TJ will help (how’s that for presumption) with some particular examples for the government. I think I will look at the billions spent on auto, aerospace, life sciences, green technology development, etc. in Ontario and sketch out a scaled down version for New Brunswick.

Because ultimately it becomes about the funding, doesn’t it? Today, the government in New Brunswick spends about half on economic development compared to 15 years ago (as a % of overall spending). And they have compensated with double the rhetoric.

But that’s not a good balancing act.

When I see a commitment to 4-5% of total government spending going to economic development, I will be happy. It has to be well spent – not willy nilly – and I have some ideas – mostly articulated here over the past four years.

As for the NB Biz Council, I would tread really lightly here – and this message goes to the media as well – they are a ‘vested interest’. You may like them more but they are the same as the CFIB, the unions, social advocates, etc. They look at the world through a narrow prism that is basically self interested. They already reacted negatively when McGuire’s first document talked about attracting more business investment. Remember that companies moving here will be competing with Biz Council members for labour and bidding up the cost of doing business.

I know, I know. You will say that in the 1950s NB business leaders like the original Ganong where asking the government to help attract more industry here. They were asking for the government to set up an economic development office in England to attract firms and investment here.

But as I have said before – that generation of business leaders knew that attracting global businesses here would only strengthen the business environment for all. The current crop – and not all – is leaning towards protectionism and taking care of its own.

As for the targeted industry sectors? Here’s my opinion:

This has been a targeted industry for decades. Hundreds of millions in incentives and cheap power has been poured in over the past 30 years. I posted on this before. They should look at what has been done in Sweden and Denmark leveraging the forestry into some of the best design and value added expertise in the world. Not just grind it up and ship it out stuff.

Don’t forget that this is the most heavily subsidized industry in the country. I don’t disagree with trying to squeeze more value added out of it but more taxes to contribute to self-sufficiency? Not overly likely. It’s still highly subsidized, highly seasonal and relatively low skilled word (at least measured by education levels).

They aren’t doing much here. Probably a good idea. Relegating thousands of New Brunswickers to $7-$8/hour seasonal processing jobs doesn’t contribute to self-sufficiency.

I don’t want to talk about this. The only funding allocation $100 million to a sector that is at the lowest level of own source tax revenue generation – the measure of self-sufficiency. I love the idea of tourism. But tourism (not the idea) is seasonal, low wage and low value added jobs. That $100 million would be far better allocated elsewhere, IMO.

Advanced training technology
They have been targeting this sector for almost 20 years and we still have almost nothing here. We had a dozen or so firms that all went bankrupt after the dot.bomb (BKM, e-Com, Provinent, Learnstream, etc. etc.) – and ironically one of the only firms left is the multinational Skillsoft in Fredericton – although I read in their SEC filings they are not doing any content development work there. This sounds like it was ripped from the pages of a 1993 plan.

Energy technology
I hope so.

New term for a sector they have been saying has been a ‘target’ for years.

What’s missing?
Just about all of the opportunity sectors (except energy). Data centres, nearshore IT support, financial back offices, animation, etc.

Manufacturing. I searched the document twice – and added a keyword search. No mention of the word manufacture or manufacturing.

That continues to be a shame. While certain manufacturing activity has dropped and been shipped to Asia, when I look at the list of top 100 corporate expansions last year – the bulk were manufacturing. Auto, aero, wind energy infrastructure, electronics, other energy systems. Nothing here.

Point on the Gateway
From the document:
Use funding from the Atlantic Gateway initiative to assist exporters throughout the province with improved transportation infrastructure, including superior quality rail lines and ports in both southern and northern New Brunswick.

As a rule now, any infrastructure investment must be directly tied to a serious plan for economic development of that infrastructure. We have seen far to much overbuild – yes I said overbuild – with no plan for development.

Lastly, the document uses the word ‘naysayer’ – actually they have used this word a lot. I advise them to have the maturity to know the difference between a political reaction (Jeannot Volpe) and a neutral, genuine informed opinion. You will need a lot more naysaying and you should listen to it.