It's The Economy, Stupid

While it may be a trivial point it is interesting to note the substantially different titles (and the tone) of the three major economic development plans for New Brunswick since 2002.

In 2002, Canada was in the middle of the longest stretch of sustained economic growth in the country’s history (without a recession) – 1994 to 2008 – millions of people were being attracted to Canada and whole new industries were emerging.  Despite the hiccup of the dot.com meltdown (not to mention 9/11), Canada was doing very well and there was a sense in New Brunswick that we were not cashing in on our share of this ‘prosperity’.  I remember a stream of editorials in the Moncton Times & Transcript demanding a ‘plan’ from government to address this.

In 2006-2007, Canada was still growing strongly but the mood had shifted – at least among the Liberal thinkers and a number of pundits.  They believed the Lord government had sat around and did virtually nothing for more than six years – on energy, post-secondary education, French Immersion, tax policy, local government, etc.  Further, they felt that New Brunswick had not used the boom time in Canada to get its fiscal house in order – we were more reliant than ever on federal transfer payments and we were shedding population (and getting old – fast).   Some saw this as a major crisis and felt the Lord government wasn’t particularly motivated to get anything done. So we got a self-sufficiency agenda which was chock full of big plans and goals (i.e. eliminating our need for Equalization and adding 100,000 people to the population by 2026) and a series of large scale changes to tax policy, energy (attempted sale of NB Power), post-secondary education (attempted), French Immersion, local government (attempted – Finn report), etc.

That didn’t work out so well for the Libs – in hindsight PR types say it was because they didn’t create the ‘burning platform’ for New Brunswickers.  They didn’t make the case that big changes were needed and when they were proposed, the public balked.

And, of course, we had a recession that wasn’t expected right in the middle of the self-sufficiency agenda that led to large budget deficits and even more uncertainty.

Now we have Rebuilding New Brunswick from a government that believes the Libs were all sizzle and no steak.  They believe the Liberals did very little to change the institutional and organizational culture of government to foster economic progress.  They cite the grand plan for economic renewal under the Libs (i.e. self-sufficiency) but virtually no change at all to the economic development infrastructure and approach.  This was the impetus behind Invest NB, behind the new Dept. of Economic Development and the just released innovation agenda (with its new still-to-be-defined innovation intermediary).

This government believes it has to ‘rebuild’ both the structure and functions of government and the institutional relationships needed to foster economic growth (educational, etc.).

And, of course, the rebuilding theme is consistent with needing to eliminate a deficit and address the emerging population challenges.

My point is not to provide a broad review of these plans but just to show how they conform to the broad thinking at the time – either by the partisans/pundits and/or the general mood at the time.

So, what’s the next plan?

The Liberals are already coalescing around the theme that ‘Rebuilding New Brunswick’ is just another slow moving, small ‘c’ conservative effort designed specifically not to annoy the public.  They cite the efforts so far (I had coffee last week with someone I trust on this issue) as being very tepid – no tax increases, municipal reform designed to have almost no controversy, no big changes to health care – only ‘efficiencies’.  They also cite the pummeling of government as a theme that the public likes to hear (i.e. cutting the ‘size’ of administration, the need for more efficiencies, etc.) but that doesn’t really help motivate government to embrace big changes.

As an aside, I call this the Brad Green effect.  The Lord government in its first term had a penchant for picking on the bureaucracy (i.e. highly visible fights with the unions, publicly complaining about the lacklustre perofrmance, etc.) but at the same time gave large raises and hired back far more new staff than it had let go in the initial purge.  Nevertheless, Brad Green got turfed from office and many suggested it was the public sector employee/voter backlash.  Green himself suggested as much while bitterly affirming his government had given large pay raises through the collective bargaining process.

But I digress.

If the Liberals win in 2014, you will likely get some kind of new plan built on a variant of self-sufficiency (those words will never be uttered as they are now toxic).  It will be about a strong, just and fair society and will have the obligatory economic development focus.  It’s hard to predict the specific themes because it will depend on who wins. If it is Murphy, you can expect much more focus on ‘social justice’ and fairness and the importance of Tim Hortons.  Not sure about Gallant.  He’s cut from the McKenna cloth – more about youthful dynamism and crafting a New Brunswick that is creative and thriving and attracting lots of young, talented workers.

The PCs are banking on the belief that the people want slow, incremental (i.e. conservative) changes.  They don’t feel a huge sense of urgency and will move along methodically implementing their changes and hope that no big external event hits to kill their electoral chances in 2014.   I do not expect any controversial policy proposals between now and 2014.  I do expect the government to continue to keep spending growth below 2 percent per year and I do expect some more cuts to the size of the public sector workforce.

So, the next plan will either be “Social Justice for All” or “Continuing to Rebuild New Brunswick”.