Advocating side deals

The IMF yesterday warned about Canada’s economic growth trajectory and suggested the federal government may have to get back into the stimulus business.  Why?  Because economic growth will drop from 1.8% to 1.5%.

When Canada’s economy grows by 1.5% its a worrying trend.

When New Brunswick’s economy grows by 0.2% – aww, that’s just New Brunswick.  What’d you expect?

Canada is a collection of provincial economies each with their own contours, challenges and opportunities.  When a little province like NB has a problem – no one notices – but if it hits enough provinces – boom, you get weak national growth and the IMF getting its underwear in a knot.

In a macabre kind of way it was fun to watch the Feds in response to the Ontario economy tanking a few years ago.  There was billions for the auto bailout.  An ACOA style regional development agency was set up for southern Ontario.  The government fell over itself to be seen trying to fix the Ontario economy.

The Ontario economy has outperformed NB by a wide margin since the recession – GDP growth and employment growth – but it hasn’t been to the level required to boost national GDP growth – so the mandarins fret.

This is the main reason why I would prefer the feds to have a ‘side deals’ view of relationships with provincial governments.  I’m not talking about separate deals on Equalization or health transfers – those should be negotiated by the whole gang.

But when it comes to the priorities of the provinces – each one has distinct challenges and opportunities.   The feds and the province should figure out how to leverage each level of governments’ strengths to achieve a shared set of objectives.

New Brunswick needs a more intelligent approach to immigration.  It needs to think long and hard about seasonal industries and the implications of EI reform.  It needs at least its share of national FDI.  It needs to encourage more investment capital – particularly into its high growth potential SMEs.  New Brunswick has a serious literacy challenge.

There are a host of issues – some are specific to NB and others are regional and even national in scope – and it requires an intelligent, long term partnership between the feds and the province.

4 thoughts on “Advocating side deals

  1. Makes sense. We have to do something! We are going to hell in a hand basket fast. With the US becoming an Energy exporter by 2015 or going in that direction it will not need the tar sands oil. This environmental has been keeping Canada and NB fiscally afloat.

  2. There is no real national economy, just a conglomeration of local and regional economies strung together. If local economies are weak, the nation will suffer. It would be nice to see a federal government that recognizes this fact.

    The NS government must find better ways to encourage immigration. This is a major topic that is never talked about in the Legislature or in the media. Nova Scotia has an aging population and last year we broke even in births and deaths, but lost 3,000 citizens to other provinces.

    There is a provincial strategy for immigration but it needs a serious re-working if we are going to attract enough new immigrants. The government can strongly lobby the federal government to dramatically increase the quota of provincial nominees. We can also do a better job of selling the province in both the rest of Canada and overseas.

    In order for this strategy to be successful however, there have to be jobs here that will attract quality immigration. We can’t all be shipbuilders. Governments should not be in the business of creating jobs, but they should be creating the proper atmosphere to attract new business and allow existing businesses to expand.

    What we can all do is begin to realize how vitally important immigration is to our survival. It needs to be part of the conversation. Ten or twenty years from now is not when we should begin thinking about this. It needs to start now.

  3. Canada and the provinces as well as social and corporate players have much to learn from successful partnership models in other parts of the world; strong players with a good understanding of and mutual respect for their roles and a common vision of how their combined roles can create a dynamism that respects the need for balance among the various ‘economies’ – social, market, etc.

    In Atlantic Canada and in Canada generally, we suffer from an imbalance in these roles, a frightening vacuum of vision and a crippling absence of strategic co-ordination that leaves our tremendous economic potential largely unharnessed.

    When governments fail in their role as strategic enablers of effective partnerships, we all pay.

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