What happened in the 1950?

I have been thinking and reading about this for many months and I just think something happened in New Brunswick after WW2 and early into the 1950s that was very interesting.  Peter Lindfield reminded me of this in his TJ column today when he talked about the transformational nature of Equal Opportunity in the 1960s.

It’s very interesting to me.  In the 1950s, poverty in New Brunswick was much more acute and visible.  The quality of our roads was among the worst in Canada – if not the worst.   We were paying teachers in ‘rich’ counties three times what they were earning in ‘poor’ counties.   One third of the population was essentially isolated and marginalized without even a French language university.

It seems to me that since the 1950s New Brunswick has made enormous strides on the social justice front, on the environment – think about the pollution in the 1950s and 60s an even the 70s, linguistic duality, public services, public infrastructure.  We now have more KMs of four lane highway than any other province in Canada (per capita).  Writers in the 1950s talked about the rural poverty and squalor – Wilber talks about ‘rural slums’ in his writings about that time.  How far have we come.

And yet, New Brunswick all but completely missed the economic and population boom.  From the 1960s onward, New Brunswick’s share of Canada’s population growth consistently declined – moving into outright decline by 2001 (although 2011 was a pleasant surprise).  Think about the industries that drove the national economy – auto, aerospace, pharmaceuticals manufacturing – tens of billions were invested in these sectors over the decades – almost all in Ontario and Quebec (Nova Scotia carved off some interesting aerospace activity too).  Oil and gas.  More recently life sciences.

The only sector of the economy where New Brunswick was a clear winner over the past 40 years was the call centre industry.

Of course forestry and mining have continued to be important anchors of the economy – but relatively speaking they have not been major drivers of employment and GDP growth.  Relative to the size of the economy, they are both smaller in relative terms than 20 and even 30 years ago.

So, how come New Brunswick could – in many ways – outpace the country for social and infrastructure development (i.e. four lane highways) and almost completely miss out on the population and economic growth?

I have looked at the data in the 1950s and even income spreads between NB and the rest of Canada have narrowed over the last 50-60 years (not absolute net worth, however).

Whether I read Hal Fredericks “What ever happened to the blueprint for Atlantic Advance” or Savoie’s “Visiting Grandchildren”, Ralph Costello’s memoirs, or any of the stuff written at the time, I can’ t seem to put my finger on it.

There are lots of ideas floating around but I can’t figure out why NB would make such progress  in social progress and almost completely miss the economic boat.

Certainly transfer payments have something to do with it but again if you look at the post War period, federal spending accounted for 30-40% of total NB government spending – similar to now (although the size of government was puny relative to the overall economy).

Certainly, there was more appetite among politicians to tackle social justice.   And as for infrastructure, we have talked many times about NB and its country leading per capita spending on highways.

There is one angle I am pursuing – and have been for a while.  Much of Canada’s growth, of course, was fueled by foreign direct investment and immigrants.  Ralph Costello talks about New Brunswick industry back in the 1950s and 1960s (and I would say now too) being suspicious of national and international firms coming here.  I think there is something to this line of argument.  There has to be some reason why Ontario and to a lesser extent Quebec attracted the vast majority of FDI in the post war period.   I don’t buy the argument that it was federal policy alone that was biased towards central Canada.  I think our business community didn’t want the multinationals here and made that clear to their politicians.

Even today, many business leaders I talk to are suspicious of national and international firms investing here.  Let’s be clear, I’m not talking about attracting firms to compete for local markets.  I am talking about attracting firms to augment an export-based cluster.  NB firms still don’t like this because they worry the big firms will steal workers and push up labour costs (or as is a constant refrain – “take government money that should be doled out to NB firms”).

I had an amazing chat with a guy at the Moncton Club more than a decade ago who said he used to run a manufacturing plant in Moncton in the 1950s and 60s but in the 1970s his national union demanded wage parity across the country in all the firm’s plants so they closed Moncton and consolidated it in Toronto.

So, I think federal policy did have something to do with it.  I think NB business apathy towards growing strategic sectors by attracting key multinational firms also has explanatory value and I think unions also must shoulder some of the blame.

In the end, New Brunswick really didn’t want to grow – at least enough to make it a serious priority.

As a result, our youth left, few immigrants came, little investment was attracted and we went from the second youngest province in Canada in the 1960s (median age) to the second oldest today.

Now, much of our social progress is in jeopardy.  I am serious about this.  The number of Francophones is steadily declining – as much by out-migration as by natural decline.   Rural communities are starting to take on some of that rural slum feel again as they are morphing into retirement communities and no one – firms or government – is reinvesting in them.  The position among urban activists is hardening against any kind of rural investment in a way I haven’t seen in 20 years.

This is why I fight to attract industry and investment.  This is why I am passionate about animating our natural resources sectors which are primarily to the benefit of rural NB.

We need now to do with our economy what LJR did with equal opportunity.  We need to lead the country in thinking about innovative ways to foster economic development and attract the population to work in the related jobs.

Enough for today.  Real job to do.  Gotta put food on the table.


8 thoughts on “What happened in the 1950?

  1. David has laboured directly in the investment attraction field and I haven’t, but I have difficulty buying the notion that we have deliberately repelled investment, and certainly that equalization was or could have been a factor in making us less eager. I am much more drawn to what he has written about at length previously – the value proposition. And here value includes the social environment – schools, health care, progressive communities. We have done a lot to improve our attractiveness, including a cleaner environment, but the competition gets ever stiffer. We now need to be leaders in many of these fields, something we can do if we are innovative and determined.

  2. I am not sure that we were deliberately repelling investment (although I have heard interesting things about Premier Hatfield not wanting the big defence firms to invest here – unsubstantiated). I am just not sure NB based businesses were particularly interested in attracting industry. Compare that to U.S. chambers of commerce that actually have teams of people out selling their cities to foreign companies. I am just thinking out loud on this stuff.

  3. Urban folks, nice as they are, have a great stake in NO RURAL DEVELOPMENT (including farming) AT ANY COST. They need compliant rural landholders to host skidoo trails, provide a vista for the Sunday drive; and they especially need to quickly lock up other peoples water supplies. Urbanites are not politically going to allow rural people to develop their own land; citing environmental concerns, town planning rules and any other excuse that comes to mind. Industry is not dumb, they know a lost cause when they see it. What won’t fit safely into an industrial park in a city is on it’s way out of the Province during this generation. The problem is not wages, unions, resources, lack of opportunity or entrepreneurship. The problem is the colonial enforcement of poverty by one group of people who are resource poor/vote rich, on another group of people who are resource rich/vote poor. Rural populations increasingly need a government cheque to stay in place cleaning the ditches and maintaining the skidoo trail — and we are told to feel thankful we even get that!

  4. This of course is the core of the argument:

    > Much of Canada’s growth, of course, was fueled by foreign direct investment and immigrants. Ralph Costello talks about New Brunswick industry back in the 1950s and 1960s (and I would say now too) being suspicious of national and international firms coming here. I think there is something to this line of argument. There has to be some reason why Ontario and to a lesser extent Quebec attracted the vast majority of FDI in the post war period. I don’t buy the argument that it was federal policy alone that was biased towards central Canada. I think our business community didn’t want the multinationals here and made that clear to their politicians.

    I think that there’s something to this argument as well. But here’s where I think it is in error:

    – first, when you say, “our business community didn’t want the multinationals here,” what you should be saying is, “our business community didn’t want OUTSIDERS here.” It didn’t (and doesn’t) matter whether they’re big or small – they’re from ‘away’

    – second, when you say “our business community” you should say “the major economic players” – ie., the few large companies that dominated (and still dominate) the local economy.

    Understood this way, when you say “our business community didn’t want the multinationals here” and when I say “the major economic players didn’t want outsiders here” we are in fact saying the same thing, and yes, I think that’s the cause for the province’s economic malaise.

    Get rid of, or seriously curtail, the very large vested interests that run this province, and it will be (as they say) ‘open for business’.

  5. Blaming the city folks? That’s hilarious. I live in Sackville and they turn down any type of development. It’s because they have no connection to jobs and revenue for the province. As David said, many are retired and therefore don’t want anything to change. And they don’t see that the revenues that pay for their health care and other benefits are coming from transfer payments. The MLA told a Calgary business not to start an office here so he didn’t. They even turned down wind turbines! With no opportunities, young people leave, leaving older people to vote against anything that will change things or have a potential risk (like fracking) against the greater good of the province.

  6. I don’t know enough people in rural NB. I talk to just about anyone who I run into about this stuff – and usually I find people quite rational about the whole thing. Regarding shale gas, they have been pummeled with a very tight and well scripted message. I don’t blame people for being suspicious. I just come back to the same old argument. The shale gas industry is growing all over North America. It is expected to continue this growth – President Obama heralded fracking as a great American innovation. So, why not NB? What is different about us? It goes without saying we need to learn from any mistakes that have been made over the past decade and we certainly need good quality partners to develop the industry in a safe way.

  7. A couple of things,

    I don’t believe rural NB is as against shale gas exploration and development as we think, or any more or less than urban NB. We’re not even sure how much is there, so I hardly think we should be pinning our hopes in anyway to its potential benefits, even with enough people convinced it was a rational choice, it’s still not a guaranteed source of revenue.

    Resource extraction is the bread and butter of rural New Brunswick. Fishing, Forestry, Mining. In my rural community, the young lobster fishers who have invested heavily in boats and equipment are now working their off season in Alberta or the North. They can’t make their payments on EI, so they work elsewhere.

    It is very similar to what their great grandfathers did, fish and farm in the summer and head to the lumber camps. That would have been in the earliest decades of the last century. There are also Farmers and those that worked as truck driver’s and machine operators who all commute. Many of those people would love to work in the oil and gas industry right here, if it were a choice.

    They worry about their water, which is an entirely sensible thing to worry about, but after that I believe, mining, and/or gas exploration would be welcomed by many, especially if their was an effort to minimize the fear factor used by opponents.

    As for the point of the post, I think Stephen Downes expresses well one of the widely recognized problems regarding outside investment in the past. I know in the 1990’s Home Depot had a non-competition agreement with a regional building supply chain which stopped investment and competition from coming into the market. I know it’s retail, and competing for business in the local market, but it is indicative of the attitude to which you refer.

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