Published in the Telegraph-Journal 20th April 2012
There is an emerging agreement that New Brunswick needs to make conscious, strategic choices to shore up its position in industries that align with its strongest, or potentially strongest, growth engines.
New Brunswick faces economic challenges as it competes not only internationally, but with regional locations for jobs, people and prosperity. The province’s critical economic engines are infrastructure and structural costs, education, regional networks and collaboration, brand identification and demographics and immigration. When all these economic engines are working efficiently, New Brunswick is as strong as its strongest link. But one faltering engine can constrain the others and affect the entire economy.
In New Brunswick, these engines have shown signs of losing power. Its weakest link, demographics and immigration, is playing a disconcertingly large role in defining the province. Bringing back the energy to New Brunswick’s educational system will be a challenge. Continuing to pursue creative solutions to structural costs and infrastructure issues and reinforcing neglected linkages are necessary to supporting this province’s emerging industries and opportunities.
Infrastructure and structural costs are on par with many competing locations and government has brought confidence to bond markets that its fiscal policies will soon achieve financial stability. Relatively lower wages and the lowest small business tax rate in Canada are offset somewhat by high energy costs. Not all firms have the same structural penalties, but the high cost of energy is a major obstacle to sustained growth in some sectors.
Education should be one of New Brunswick’s strongest links. Universities historically have been disinclined to admit that they are in competition with one another. But New Brunswick universities are showing signs of stress because of inadequate investments and increasingly are viewed as providing less value than those in competition regions. Enrolment is down in a number of faculties as students vote with their feet and choose other university destinations.
Public funding of universities needs to increase to bridge capabilities in research and development, networked dorms, laboratories and technical centers of excellence. At the same time, tuition costs will need to be kept in check to avoid the prospect that students looking for value and firms seeking specialized skills are not motivated to look elsewhere.
Business leaders today agree that innovation requires collaboration and vigorous networks of ideas, technical competence and expertise. The New Brunswick region performs acceptably well when collaborating among businesses and between government and the private sector. It is less successful fostering networks that extend beyond the Maritime region where many New Brunswickers are clearly outside their comfort zones. Reinforcing success must become a priority.
It has become a truism to say that New Brunswick does not possess a distinctive brand. Although government has made several attempts to communicate a comprehensive value proposition to potential investors, New Brunswick businesspeople are uncertain what to communicate outside the province. The result has been less foreign direct investment than most of its counterparts across Canada.
One of the most profound challenges facing New Brunswick today is attracting and retaining individuals with the skills that are employees need and which are critical to economic stability and growth. New Brunswick is facing a potential population decline and the demographic trends are not favorable to the province. Some workers who are in greatest demand are migrating to high-wage regions in Canada leading to shortages in New Brunswick. The province has experienced difficulty adding immigrants to increase the population of the province in part because job prospects are notably better in other provinces.
To continue as we are will mean that New Brunswick cannot prosper in comparison with other regions. The task is intimidating but it is not too late. We can start by comparing New Brunswick with other competing jurisdictions and understanding their successful strategies. A significant challenge will be getting the private sector to support the necessary investment and action that need to be taken today.