Getting beyond the zero sum game

I have been talking to a lot of people lately about a project I am working on and there seems to be a consistent theme.  Just about everyone views economic development as a type of zero-sum game where in order for one community to ‘win’ another community must ‘lose’. 

The result of this attitude, of course, is that a) people spend too much time fighting for their piece of this small economic pie and b) increasing acrimony between communities and regions.

Take this issue of concerts.  It’s a petty issue to be sure but it is illustrative.  Halifax is Atlantic Canada’s concert capital.  Or maybe it’s Moncton.  Depends on who you ask.

For Joe Q. Public, who cares?   The bottom line is that this is a win-win situation.  I have friends going to Halifax to see Kiss and McCartney and friends in Halifax coming to see AC/DC in Moncton.   Everyone wins because the concert scene is vastly improved for all.

Was it the rivaly that actually helped improve the concert scene in the Maritimes?  Maybe but I have always said that healthy competition between cities is a good thing as long as it doesn’t devolve into bitter acrimony and lead to an inability to work together on regional issues that matter.

We need to have the same approach to economic development broadly.  Bathurst’s gain shouldn’t be seen as Moncton’s loss.  Fredericton’s gain shouldn’t be seen as Edmundston’s loss.  Sure, there will be winners and losers but in the end we need to increase the overall size of the economic pie or it will end up harming all.

14 thoughts on “Getting beyond the zero sum game

  1. David, you are correct that we need to make a more cooperative approach in the Maritimes to economic development. At the same time, we need to have good datasets that can assist in the development of public policies aimed at promoting economic development. I believe that the principles of the scientific method have general applicability and can be of assistance in this. In other words, rather than picking an hypothesis (eg broad based tax cuts are always good; SMEs need a tax break), then cherry-picking data to support it, lets try looking at the data as objectively as possible first, then formulate hypotheses that best explain the data. At least then we can make some progress.

    As things stand now, we are subjected to a constant barrage of ‘solutions’ (from AIMS and their colleagues) that are not reality-based, but instead are based on poorly-supported fantasies. Until we can get past that, we are just going around in circles. As I have said before, we need to disincentivize bad advice (I ask again, what public good is provided by giving a propaganda organ like AIMS charitable status?) and incentivize good data collection and analysis (by supporting institutions that generate or use good data in making policy suggestions). AIMS and their supporters may object to this characterization; however, you will not find many peer-reviewed journal articles listed in the bios of their staff – a sure sign that they are more interested in propaganda than good public policy development.

  2. We need to have the same approach to economic development broadly. Bathurst’s gain shouldn’t be seen as Moncton’s loss. Fredericton’s gain shouldn’t be seen as Edmundston’s loss. Sure, there will be winners and losers but in the end we need to increase the overall size of the economic pie or it will end up harming all.

    Very true, but it depends what lens you view it from. For instance, would an overtaxed, small business owner who recently declared bankruptcy in Campbellton not be upset at the continued flow of generous subsidy programs to government friendly firms and multinationals in Moncton?

    Would a community, and the families within it, who didn’t receive SEED grants for students, say in Sackville, be happy about the fact they were awarded to ridings in Shediac and Fredericton?

    Would a hardworking, independent business owner be happy to hear that grants, which were financed by his tax dollars/profits, were awarded to golf course owners that couldn’t quite balance their books.

    I guess what I’m saying, is because we have not had any good news in the economic sector here for many years now, it’s hard for people not to view grants, forgivable loans, subsidies, loan guarantees etc. as nothing more then a political tool to reward friends, buy votes and use job creation projects as photo ops. In other words, people don’t see a lot of the government initiated economic projects as sound business decisions based on long-term sustainability and growth.

    Plus, let’s remember, New Brunswick is a small province, so if you tick off Joe Q public, you piss off a hundred of his friends that he goes to church with, plays ball with, fishes with, etc. So you’re bound to create a wedge via the ‘zero sum” game known as corporate welfare.

  3. I’ve said the same thing about AIMS as Richard, however, there’s no point in talking about getting rid of their charitable status, its simply not going to happen.

    To counter that we can use the idea Richard had before-getting ‘competing industries’. Here, there is at least a possibility because there are some organizations out there. Again though, that Irving propaganda has made people VERY antagonistic towards organizations of almost any kind. The Pembrina Institute and the Centre for Policy Alternatives are two such examples, both have ‘branches’ in Nova Scotia which do analysis on the maritimes, but there is really nothing in NB. There MAY be something from the universities, but it certainly doesn’t get out to the public. With the Irving media it gets hard, but with the internet its getting at least possible to get these alternatives out there.

    As for the cities, that IS silly. Of COURSE it is anothers loss, that is simply the kind of logic that comes out of a place like Moncton, which has been getting much of the ED effort of the past two decades. Concerts aren’t the point, nobody really cares where these bands play, in ED we’re talking about initiatives that enable people to live close to home or have to move. The government can’t do something about EVERY proposal, but of there ones it can impact, there simply insn’t a system in place to make it fair.

  4. Mikel said “Of COURSE it is anothers loss, that is simply the kind of logic that comes out of a place like Moncton, which has been getting much of the ED effort of the past two decades.”

    Shame on you; can’t beleive you could say this, it is exactly why some governments will take no action at all….because it is safer than the alternative. All Moncton did is pull together, focus and work very hard at ED because of a crisis situation. There are still about 135 BNB ED people in Fredericton and about 3 in Moncton (not counting the jointly funded effort at Enterprise Moncton)

    There are two ways to tackle a crisis; 1) pull together like Moncton has or, 2) whine, bitch and complain that ‘somebody’ has to do something that usually implies some sort of hand out that avoids meaningful solutions to the situation. When you are prepared to help yourself, you’ll get results.

    Moncton should be viewed as a good example of relatively positive outcome from a negative situation. Instead of promoting the playground style in-fighting among cities, regions and cultures in the province, we need to be recognizing best practices, and learning what works and what does not so the entire province can prosper. We have more than enough people here already dragging us down with finger pointing and segmentation; we need to shut down these negative efforts; Ontario can have them.

  5. That’s garbage, Moncton did ‘sort of’ pull together, but not in the way indicated. It’s not like all the people of Moncton got together in a hayfield to ‘build a barn’. In many ways Moncton had a ‘successful outcome’, but it all depends on that lens. The massive growth in the area certainly hasn’t been a boon to pensioners living in Dieppe who saw their property taxes almost double.

    And the growth of Moncton certainly wasn’t due to LOCAL politicians, who have virtually NO powers to do much of anything. Moncton was successful because both the federal and provincial governments massively invested in the area-THATS my point. When was the last time those two levels of government massively invested in Campbellton, Bathurst, Miramichi or Edmunston?

    And in Moncton it was more a necessity, since the closing of the train yard would devastate the city. That’s why the airport and transcanada were both built up-to increase industrialization. That’s why Irving was asked to locate several of their new enterprises there. That’s why Molson was asked to locate there. The highway and airport both served to create a ‘hub’ and thats exactly what they did, neither of those had anything to do with local politicians or businessmen, let alone the population. Like in many city’s, the ‘pulling together’ was largely locals cheering on the investment.

    Governments take action ALL the time. You want a ‘proactive’ government that takes risks and has initiatives? You’ve got it, there’s massive investment in refurbishing Point Lepreau, the first time such a thing has been done. There’s talk of a second one. The educational system and health care system are seeing massive moves toward privatization. A tax break like no other is given to help create an ‘energy hub’ in natural gas. The feds pony up 50 million to create a wallboard factory to replace the drydocks. 350 million is added to debt in order to replace highway.

    I could go on, but that’s plenty to show that the liberal government is certainly not ‘taking no action at all’. And this is a small province, so we are talking about changes of a monumental level.

    But again, the PROBLEM is not that they are taking no action, its that we submit they are not taking GOOD actions. They are not massively investing in education to deal with a crisis in literacy, they are not ACTUALLY making life better for small businesspeople. They are not creating opportunities for those who DO get an education. And from David’s view, they are not seriously trying to get international investment.

    This has nothing to do with ‘infighting’. When Molson locates in Moncton, the simple reality is that every other place WANTING Molson has ‘lost’. That’s reality, and to say that nobody should talk about it is just foolish. Moncton benefitted from investment from three levels of government and people in other parts of the province have a legitimate right to complain-some more than others. There is a solution to those complaints though-namely ‘be fair’. While we see massive giveaways to southern city’s (the liberals even went as far as moving an entire department to St.John), we see little for rural areas except the occasional bridge. Currently, the entire lobster fishery is in crisis, but you can’t even get the government to TALK about bailing out the relatively few lobster fishermen. Even though they just handed out a ten million dollar cheque to Irving when they blackmailed them about moving their pulp mill to Quebec, and 65 million to a Caissie Populaire. Atlantic Yarns was an exception-one clearly designed to get locals off resource industries.

    From an economic standpoint there is no ‘crisis’. Business in NB has been bragging about how wonderful everything is for years. They don’t want change-except the change that has been offered-lower corporate income tax and lower taxes on wealth. But the last paragraph above is right on-recognize best practices and what worked in Moncton-namely investment of all three levels of government. How to do that and what initiatives to invest in is the relevant question. Pointing fingers never hurts ANY economic development efforts, in fact I’ve never even seen it occur in ANY level of government. Canadian governments are notoriously business friendly, in Fredericton they openly break environmental laws for the sake of development.

  6. “its simply not going to happen.”

    Who’s being cynical now? Charitable status is handed out by Revenue Canada like candy. Millions in tax revenue lost because of policy decisions made behind closed doors. Corporate welfare on a massive scale.

    “Would a hardworking, independent business owner …”

    As a hardworking co-owner of a small business, allow me to comment on that. 1) SMEs are not over-taxed in NB. Everyone would rather pay less tax, but anyone who feels the level of taxation is a real threat to their business is either a lousy business person or has a crappy business model. 2) Of course I would object to govts handing out money to golf courses and tourism operators, but I would support incentives or direct grants to aid in the establishment of new, large, export-oriented industry – provided BNB does its homework, the industry makes various committments, and the industry is not controlled by our current crop of moguls. I don’t have a problem with ‘corporate welfare’ as long as it is in the public good. Unlike AIMS, which receives the benefit of taxpayer largess and does the public harm.

  7. Moncton should be viewed as a good example of relatively positive outcome from a negative situation. Instead of promoting the playground style in-fighting among cities, regions and cultures in the province, we need to be recognizing best practices, and learning what works and what does not so the entire province can prosper. We have more than enough people here already dragging us down with finger pointing and segmentation; we need to shut down these negative efforts; Ontario can have them.

    Very well put Richard. But another question we should ask ourselves is “why is there institutional infighting and bickering between provinces?” Is it because there is too much autonomy as well as an overlapping of services and infrastructure (be it government or private sector) in competing jurisdictions?

  8. Wow Mikel, you are absolutely WRONG about Moncton. There will be a book about it someday but I can assure you that the turnaround started with a late night meeting of some Moncton business people who put their own money on the table. They engaged Ron Gaudet to lead the ED efforts and there is where the positive momentum begun.

    There are similar community led successes in places like Summerside and Parry Sound. Once these places get some work done and come forward with sound, widely supported ED ideas, government (and business) is happy to invest.
    The united effort for Moncton to overcome the CN shops and Eaton’s devestation is truely remarkable. Places like Windsor who are facing similar challenges ought to take notice of what was done in Moncton; so should the communities in NB facing challenges.

    You are obviously mis informed and your cheapshot sterotype comments are way off base.

  9. “institutional infighting and bickering between provinces”

    You’re right there. The provincial bickering is just the city bickering writ somewhat larger. If we confine this to the Maritimes, then you could say that, as in university politics, the ‘fighting is so vicious because the rewards are so few’. In other words, everyone is scrabbling after the same few crumbs. Not sure how to get around that – if an NB Premier had enough guts, he certainly has the legal clout to force cities to work together. Who would push the Maritime provs to work together? The feds play the divide and conquer game, as do the current crop of moguls.

  10. First, if Richard wants to start a lobby group to change the way Revenue Canada operates go right ahead-that’s not cynicism, thats just reality. AIMS doesn’t use taxpayer money, it just doesn’t pay taxes, that’s a little different. But I echo Richard’s statement, everybody likes lower taxes, but at what cost? Small business owners especially are VERY likely to take advantage of government services like health care,etc. In fact, to be really competitive, the best thing the government could do is include dental care in Canada’s universal healthcare. It SHOULD be there anyway, as well as basic eye care.

    Second, as for Moncton, when we see the book then we can have the discussion. WHAT business people were at this meeting? How much money did they ‘put down’ and where did it go? Local business people usually have a hard enough time staying in business, and the early nineties saw a recession. The airport and trans canada are two very concrete examples of how the feds and province ‘invested’ in the city. The expansion at the university is another example.

    But I will admit that analysis was badly worded, but was far from a ‘cheapshot stereotype’-I don’t even know what that means, thats more a comment for a high school basketball rivalry or something. This is economic development analysis, and until we see some DATA to prove the contrary, the reality speaks for itself.

    I did admit that Moncton WAS a good example, but ALL levels of government saw the need to get involved there. It was well recognized that Moncton had a better chance of being an industrial base than St. John or Fredericton. Business people have gotten together in NORTHERN New Brunswick cities for DECADES and made various demands of other levels of government and gotten nowhere-and MOST development of any kind in these places come from business people ‘putting up their own money’. The difference is that in Moncton, as said above, the other levels of government were ‘on board’.

    GETTING those levels on board is the problem, again, read Donald Savoie’s books, he wrote one about economic development in Kent County during the nineties-his conclusion was that ED fails EVERY time UNLESS all three levels of government are on board. In the Kent County example this was during the ‘so called’ business friendly days of Frank McKenna but Savoie clearly states that the ONE government that kiboshed all efforts at ED was the province.

    As for the infighting, thats simply part of a capitalist model. If RIM sets up in Nova Scotia and not New Brunswick, well, thats the way it goes. We’ve talked about the WHY before, the other options are simple-either nationalize industries so government can dictate where they go, or make those kinds of decisions contingent for when they want funding (and most will at some point). As we’ve noted here before, taxation means nothing, in NA most jurisdictions charge hardly any taxes and we’ve posted the Maine study where taxation levels were WAY down on the list of issues companies look at for location decisions.

  11. Just had a thought, it may be a little conspiratorial, but its possible that if you look at the Kent County example, there may have been a good reason why the province wasn’t ‘on board’-namely, because this was during the days of the Moncton business buildup. Kent County is right next to Moncton, and that certainly explains why a government thought to be extremely business friendly would be making life difficult for local and federal ED efforts. That combined with the ‘clustering’ theory of business would explain why ED efforts in rural areas would be getting the shaft.

    It is VERY true though that ED efforts HAVE to start at the municipal, even grassroots level-there are lots of examples of that.

  12. That combined with the ‘clustering’ theory of business would explain why ED efforts in rural areas would be getting the shaft.

    True, but it wouldn’t hurt for some of these rural municipalities to hook their wagon onto some of these urban areas and ride the wave (if and when there is one). For starters, why don’t some hold joint chamber sessions instead of relying on the Enterprise NB to dictate their future. Their are some interesting things that could be promoted between Moncton-Shediac-Petitcodiac-Sussex-Salisbury-Sackville-Amherst-Truro. Which would strengthen that corridor and better influence a movement of goods, services and investment. The stronger region states are, the better chance they have of competing nationally, and even internationally.

  13. That’s not necessarily true, in fact its rarely true at all. The ‘idea’ has come about that rural or smaller areas SHOULD ‘hook their wagon’ to somebody else-however, thats sort of like the amalgamation issue-there is no evidence that bigger is necessarily better.

    You could writ that large and say that due to provincial boundaries northern New Brunswick IS ‘hooked’ to southern New Brunswick, but that hasn’t helped IT. All rural areas ARE connected to urban ones-they are called ‘roads’, but there is no evidence that that helps rural ED efforts.

    In Kent County, as Savoie states, NO ED efforts help without all three levels of government (that can be debated of course), but its a weird kind of analysis that says “yes, our provincial government has and does continue to screw you over so why don’t you try some kind of regional ED efforts”. That’s just bizarre. As David points out about virtually every issue-the solution is not to try to be content with what happens, but how to change what happens.

    But finally, I’d like to point out that in the Kent County analysis it was NOT left to Enterprise NB to ‘dictate the future’, the local enterprises and even workers were doing that IN Kent County, just like those business people in Moncton were. But in the case of Kent County they didn’t have the same benefit Moncton did of having the province ‘on board’. THAT is the problem, both in rural areas and in the northern region. There is NO reason why Molson couldn’t have been put in Edmunston-it’s probably closer to almost all their markets anyway, but the north simply doesn’t have the ‘clout’ the south does.

  14. mikel is right, it should not be up to the media or special interest to drive the agenda, it should be up to those that represent us (and our issues). Why do you think people got so excited about the prospects of an MLA or MP, like Tanker Malley and Bill Casey, representing their views independently? I’ll tell you why, because debate gets (and has been) stifled and MLAs/MPs muzzled in a system that doesn’t accept true debate (especially when it is counter to their own party ideology like in the Casey case).

    Which brings me to the point of “why do so many citizens shy away from the idea of proportional representation as it is a good way to have more voices debating an issue that many concern them?” Especially if they liked how Casey and Malley stood up for them, like any true politician should (confidence vote or not).

    Speaking of confidence votes, it’s absurd that parliament could fall and Canadians be forced into another costly election because two parties (Libs and Tories) are unwilling to find common ground on an issue such as EI. There needs to be more of a push for a system that accepts more voice, more debate. That system is not FPTP it is proportional representation. Simple as that.

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