I have met many of New Brunswick’s business leaders over the years but I never had the opportunity to meet either of the McCain brothers but I have talked with a lot of folks that were impacted by them over the years.
There are basically two extreme ends of the spectrum on the impact of the McCains (and other large scale entrepreneurs). On one end, there are those that say they stifle local competition, restrain growth outside their ecosystem, set prices and wages and squeeze supply chains. Adherents to this view suggest this leads to less economic development over time because of the dependency on such a large employer.
At the other end of the spectrum, there are those that say without the McCains, et. al. New Brunswick would be an even worse economic basket case than it is now. What we need, they say, is a new round of large scale entrepreneurs to step up and build companies with thousands of employees and supply chains with several hundred firms in New Brunswick.
I don’t know that anyone has really tested either theory in any kind of formal econometric or even investigative journalistic way. It seems to me that the McCain manufacturing facilities paid decent wages, treated suppliers well, etc. Sure they adapted to local market realities but I haven’t been presented with any evidence they were bullies, kept down wages, pushed local competitors out of the market. I have talked with those with varying viewpoints as to the impact on agriculture but I don’t know enough of that to add any value to the conversation. Agriculture is, and will remain, a highly subsidized, highly regulated and somewhat cartelized industry. Obviously the McCains were a big part of that process.
My preference would be to see more ambitious NB entrepreneurs step up like the McCains.
It’s been awhile since I researched this, but I’m pretty sure that I’ve seen some studies that documented the ill effects the McCains have had. If you knew anybody who lived along the St. John river valley years ago-or any medical personnel in Fredericton, then they can tell you about the increase in miscarriages in the farm belt. In fact I know there is a study that documents that as well, but I haven’t seen it for some time at pubmed (though I haven’t looked).
As for impact, I’ve documented for years the fact that NB has one of the smallest number of family farms per capita in the country. There are just over a thousand such farms. This type of ‘corporate farming’ led to the wipeout of the family farm along the river valley, replacing them with ‘farm managers’.
It’s true there are no real studies on the economic effects of the family farm vs. corporate farm. However, as far as entrepreneurial activity goes, we KNOW that family farms at least have more POWER. I can go into numerous health food stores here in ontario and see all kinds of innovative and organic products that arrive from small family farms in Manitoba, even Saskatchewan, as farmers look to diversify from commodities.
In NB, the converse is exemplified by the action years ago that saw McCain tell ALL its suppliers that it would no longer purchase GM potatoes, even though they had insisted on them years before, even financed the seed. ALL those farmers lost a years worth of production, so I think that falls in the category of being ‘bullies’.
Also, it stifles innovation as McCain simply wanted ONE product-potatoes. Meanwhile, in the news last year was about a progressive farm in the Sussex valley (I think) that began growing hops for the local brewery market. They can’t keep up with demand. So being ‘locked in’ to a supplier DEFINITELY has an effect on innovation.
New Brunswick would be a better place if we had more entrepreneurs like the McCains.
It remains to be seen if New Brunswick can produce another multinational company with 20,000 employees and $ 6 billion in annual sales but I hope their success inspires others to try.
To loosely quote Frank Mckenna from his eulogy of Wallace McCain, “the Wallace McCain’s of the world are our oil wells of the future”. Being from the area I can clearly see how this rings so true. I remember the days (circa 1990s) when Carleton County was prospering, and a young person who wanted to live there could actually find a job which payed well and allowed for fantastic career growth. Conversely, I’ve witnessed first hand on many levels the decline in the local economy resulting from good jobs being moved to Toronto and offshore.
Its true that when one organization has so much control over a sector of the economy or a geographical area, that it will tend to stifle competition to its advantage, but as my dad used to say, “that’s business”. Trust me when I say the the spin off from that monopoly yielded much more economic benefit to the area than hardship.
As far as a lack of innovation goes, I have a hard time not laughing at the statement above regarding “one-product potatoes”. In the early years McCain simply tried to keep up with demand. over the last quarter century they have been filling more white space in the frozen food sector with pizza, juice, desserts, appetizers, and many more innovative products. The company continues to do this under its new management not by pushing its product ideas on the market, but by asking consumers what it is they want and filling the need. This market-based product innovation methodology is what we need to see more of in NB. Find a problem/opportunity and develop a solution, rather than figuring out something you think you do well and pushing it on a market that may or may not accept it.
I’m with David on this on, I’ll take the bad with the good, and I’ll take as many more of these visionary entrepreneurs as we can spit out.