It's The Economy, Stupid

I had lunch with Ron Gaudet today.  He’s the former CEO of Enterprise Greater Moncton that is going to run the Windsor, Ontario economic development group.  He’s walking into a pretty tough spot – 15% unemployment, lots of other problems but he is optimistic about the region turning around. 

I hope the new guy leading BNB in Northern New Brunswick is equally optimistic.  It would be easy for someone to see that job in bureaucratic terms, go through the motion for five years, get nothing done and then have people pat you on the shoulder and say “there wasn’t much you could’ve done anyway”.  I am not saying the new guy will do that – in fact the article says he is a guy who is biased towards action – but it all depends on your state of mind.

I can understand why people think Windsor will bounce back – it is in the industrial heartland of Canada – billions in government dough will be poured in there over the next few years to revive that economy (just like in the past). 

I wonder if there is broad agreement that Northern NB can be revived.  Many people have told me  – some fairly high up on the totem pole – that the North should be recalibrated around a much smaller economy with far fewer services.  They say this is happening anyway and we shouldn’t try and slow the decline by spreading around government grants. 

I take a different view of economic development.  I think if you get the right policy framework, the right value proposition, make targeted and strategic investments and then build a proper cluster development approach you can revive a place like Northern NB with limted subsidies and based primarily on private sector investment. 

Think about forestry.  UPM didn’t leave the forestry business.  They just left New Brunswick.  Same with the others. If the value proposition for them was strong, they would have stayed.  Certainly much of the blame for some of them rests internally with a lack of productivity measures and bad relations with the local union but certainly high power rates, dwindling access to fibre (because of chronic underinvestment in silviculture) and other factors that are shaped by public policy mattered. 

I don’t want to litigate this specific sector but my point is simple.  Ireland is a rock with limited natural resources.  It is basically Newfoundland without offshore oil and no Labrador minerals.  And no forestry to speak of either.  So how come it led the world for business investment for almost 25 years?  Good policy, planning and focus.  And even with Ireland’s recent struggles (nothing goes up for ever), the country is still far ahead of where it ever would have been.

That thinking should apply to New Brunswick and to northern New Brunswick.