Is Government On the Right Track?

By Peter Lindfield, published in the Telegraph-Journal 24th July 2012

With two years left before the next election, some New Brunswickers are asking whether we are headed in the right direction. The provincial government is at the halfway point in its mandate, a useful time to consider the prospect of its achievements and failures. The questions are more than whether government’s policies are working, if taxpayers’ money is being spent wisely, or whether the government is accountable to the public for their results.

The David Alward government has deftly dodged a number of bullets in its first two years. The long-awaited forestry report managed to please neither environmental and conservation groups nor the forestry industry and chose instead a middle-of-the-road course of action.

There is substantial room for negotiation and accommodation in the new set of rules but the role of government in the industry has effectively been placed on a back burner.

The main challenge that faces government is that the likelihood of ongoing negotiations may produce greater uncertainty in the industry to the extent that government will need to revisit the issue in the medium term.

Shale gas continues to smoulder in the background. Oil and gas company executives and industry analysts support the proposition that the extraction of natural gas – both conventional and unconventional – will realize an enormous  economic potential, but opposition to drilling continues. The government sponsored a series of public meetings, held in eight communities across New Brunswick, which provided an opportunity for an in-depth discussion of its proposed shale gas regulations. Low prices for natural gas, coupled with uncertainty about just how much gas can be extracted profitably will keep the shale gas drilling momentum in the background for the foreseeable future. And time is what government needs most to assure the public that a combination of regulations, monitoring and enforcement will make shale gas a viable proposition.

The management of the economy or more specifically the management of the deficit and public debt is simultaneously the government’s most prominent achievement and its greatest disappointment. For those concerned about the prospect that public expenditures were no longer viable, the gradual but sustained reductions in the budget deficit have provided relief. But there is a contingent of fiscal conservatives that believe the reductions have been too gradual and that government has significant latitude to reduce the cost of government even further.

There is pressure to achieve significant change in a very short time frame. At the same time, the public increasingly is cynical about the implications of any significant social, political or economic change. As with all governments, the New Brunswick government faces challenges in coming decades in health care, education, energy, the environment and public safety. For New Brunswick, one important key concern is the affordability of services in the face of fiscal pressures. At the same time, the size of government and its role in the economy means that the contribution of government to economic growth is of real significance.

Many of those who think that government has not done enough to reduce public expenditures also are of the view that it has not done enough to grow the economy. But government has not been helped by the private sector. With notable exceptions, New Brunswick industries are laggards in productivity, research and development investment, export orientation and competitiveness.

The provincial government has the responsibility not merely to ensure financial stability and create efficiencies, but to safeguard the environment, further the aspirations of its citizens and improve lives. Fulfilling these aspirations takes time and it cannot be only government holding any responsibility. It also requires the recognition in the public that not all things are achievable at once. Patience and discipline are needed in equal measure.

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Filed under Job creation, New Brunswick, Shale Gas

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