Living in the twilight zone

Have you ever stood in a room full of people (literally or figuratively) where everyone else seems to know exactly what is going on and you have no clue?

This is how I feel with this new Benefits Blueprint unveilled yesterday as a tool to manage the boom/bust cycle of large capital projects. It says that Saint John (with some spill over to the rest of the province) will see $19 billion in new capital investments (mostly energy) over the next ten years and something like $44 billion in spending, 33,000 jobs, and $14.2 billion in tax revenue over 10 years.

The Benefits Blueprint is supposed to be the plan to manage this and ensure there is no boom and bust.

Most, if not all the coverage I have read on this, doesn’t mention the ‘bust’ part.

If you look at the report published yesterday (actually the summary, I can’t get my hands on the full report), there will be a spike in jobs up to 33,000 direct, indirect and induced by 2012 but by 2015 that will have dropped down to 4,000 (2,000 direct and 2000 indirect and induced).

If that happens, it will make the Saint John shipyard closure look like a convenience store closure.

All the blueprint calls for is massive investments to manage the ‘boom’ and nothing to manage the ‘bust’.

Am I wrong about this? Please explain it to me.

Take the potash expansion. Almost $2 billion to expand it and then something like 50 new jobs – total. The same with the LNG plant. The refinery and Lepreau II will each have a few hundred, high paying jobs but…..

The government says we need 100,000 new high paying jobs by 2026. This whole energy hub – by its own forecasts – will be 2,000 + 2,000.

So, until someone explains what I am missing here, I will put forward my own recommendations to manage the ‘boom’ and the ‘bust’ from adding 33,000 jobs and then dropping down to 4,000. Something, by the way, I have never seen in Canada. There have been massive growth stories (Fort McMurray) but they keep growing. They don’t just drop 29,000 jobs. This is more like a gold rush and we all know what happens to gold rush towns once the gold is gone.

Manage the ‘boom’.

-Temporary housing – like in oil Alberta – barracks. Building thousands of new apartments and family units will just screw up the long term housing market in SJ.

-Bus people in from other parts of southern NB

-Encourage work to be done elsewhere if at all possible

-Delay governmented funded projects if warranted

-Do not build up health and other infrastructure based on the 33k but on the 4k remaining.

Managing the ‘bust’

-Saint John needs to keep focused on its other key economic sectors as well. Its nascent IT sector, its 4,000 person call centre/back office sector, etc. If these industries decline (as a result or not of the energy boom), it will bring the whole area down.

-We need to rethink the energy hub in the context of not just generation but of using that energy to spur development here. Manufacturing, forestry, data centres, biofuels, etc. all require large amounts of energy. If, province wide, we added 20,000 good paying jobs because of cheap energy from the energy hub, that would be far more important than just the 4,000.