Over the past couple of weeks I have had the opportunity to travel around New Brunswick and talk to various groups about some of the challenges facing the province over the next few years and make the point that we need a more robust economic development focus going forward.
There is no question that government, community and business leaders are realizing that New Brunswick is about to enter a period of serious austerity when it comes to government spending. Just like previous recessions, governments have built up big deficits and will need to either cut spending or raise taxes (or both) to climb out of the hole. Since both political parties are on the record saying they will not raise taxes, the only other short term option is fiscal restraint.
Government spending in New Brunswick over the past 15 years has been well above private sector spending. When we clamp down on public spending, will the private economy pick up the slack or are we in for an extended period of economic malaise?
In addition to the need for fiscal restraint there are a number of other significant public policy challenges that will influence the economic trajectory of the province. Our competitive position is being eroded by high energy costs and increasingly tight labour markets. Having low unemployment is a good thing but it does put upward pressure on wages. Higher wages, higher energy costs and a Canadian dollar close to par with the U.S. dollars is a dangerous combination for our export-intensive industrial economy.
But travelling around the province I get the sense things are different this time. It might just be me but I think a lot of people are really starting to understand the scope of the challenges and are not interested in settling for the superficial political rhetoric that pervades the public square these days.
The other thing I see is less interest in assigning blame and more interest in getting down to business. Assigning blame for the lack of economic development is a cottage industry itself in New Brunswick – north vs. south, urban vs. rural, Moncton vs. SJ, Moncton vs. Halifax, – someone else wins ergo I lose.
It’s easy to blame the other guy. It’s harder to take responsibility.