David Coon Says A Local, Green Economy Could Create 14,000 New Jobs
FREDERICTON – David Campbell, a New Brunswick economic development writer and consultant would say, “It’s about the economy, stupid,” the name of an insightful and interesting blog that he’s written for years.
Others like Krista Ross of the Fredericton Chamber of Commerce put it more diplomatically, arguing that the provision of social services like health care and education depends upon a robust economy that generates tax money to pay for them.
But however they frame their arguments – bluntly or more gently persuasive – many business people, economists, and economic development consultants and experts say much the same thing: a healthy economy is a foundation for a strong province.
With this in mind, I had conversations with leaders of the province’s main political parties about the economy in advance of the vote next Monday, September 24. I spoke first with Green Party Leader David Coon, the former executive director of the New Brunswick Conservation Council who won a seat in the legislature in 2014 in Fredericton South.
Here is an edited and condensed version of our conversation:
What is it about your life experience or work history outside politics that would make you a good steward of the province’s economy?
I worked in the nonprofit sector for most of my career managing budgets and managing people and managing organizations, starting new non-profits and also one cooperative.
We tend to think of entrepreneurship in the private sector, but that encompasses the nonprofit sector as well.
The challenges of running a nonprofit – where revenue is totally based on fundraising activities to meet payroll and your operating expenses are significant – is in some ways more difficult than a business because you’re not selling directly a product that’s centred in your revenue. The fundraising activity is on top of your regular activities.
In your platform, you talk about the province living within both its financial and ecological means. Let’s talk about each separately. What do you mean by living with our financial means?
In good times we would be budgeting in ways that produce surpluses, and in tough times we would then be able to use deficit financing to ensure the most vulnerable would be taken care of during recessionary periods. That just seems like a common sense approach to managing the finances. You want to be in surplus in good times and you want to have the flexibility to go into deficit if need be during recessionary periods to ensure that people are kept whole.
The party promises to hold a public inquiry into the sustainability of the province’s financial and ecological deficits. You talk about addressing things like removing the industrial property tax exemption for crude oil storage tanks and add industrial machinery and equipment as taxable property.
In looking at budgeting responsibly and managing the finances, there are [many] things at play. One is the revenue side and whether we’ve got just and fair tax policies so that all of those involved are paying their fair share. Part of the inquiry would look at that, the state of our tax system and make recommendations in terms of how to make it fairer in terms of burden sharing within the province. Specifically one of the things we’re saying is looking at the state of the property tax system, we would, like some other jurisdictions in Canada, ensure that machinery and equipment for heavy industry would be included in their assessment.
On the revenue side, we’re also looking at royalties and whether we’re getting a fair return on royalties with respect to our forest resources and other resources. We don’t believe we are, so we would change that. That should also solve the softwood tariff problem for us if we were collecting appropriate royalties from our crown lands.
What do you mean by living within our ecological means?
We’ve got two kinds of debts and deficits. One is financial and one is ecological. From an ecological perspective, we’re over-cutting on our crown lands, creating a significant ecological debt there with a decline in wildlife populations and the damage to our fresh watercourses, rivers and streams. That’s a kind of ecological debt, as would be the excessive use of fossil fuels creating carbon pollution at levels that have swamped the atmosphere’s ability to absorb the carbon.
So we’ve got dramatic and increasing climate change now that is costing us dearly, both in terms of health from things like Lyme disease that climate change has brought us, and damage to our infrastructure and damaged our communities from the intense storms we’re now experiencing.
This is a question that jumps to mind because we’re tying the forest resources into a discussion of fossil fuels. People see the very large Irving industries around oil and forestry as being so tied to economic growth in the province. Is there a way of reorienting the way we see developing the energy economy and forestry economy that marries the Irving interests with sustainable development?
Take the example of a four years ago when the deal was negotiated to guarantee a significantly increased supply of wood from crown lands that resulted in dramatic changes to forest management that are contrary to the public interest, and a significant deregulation of forest management. The government of the day could have said if you need increased wood supply get it from the woodlot owners. It could have maintained the reasonable balance in terms of forest management that was occurring on crown lands to sustain wildlife populations and better protect our freshwater sources. But they chose not to do that.
Is there a way of doing that in your mind that still keeps forestry companies like JDI strong and growing?
They’re looking for increased wood [supplies] and woodlot owners have increased wood [supplies]. In the past, the private sector was the primary source of supply and the crown lands were seen as the residual source of wood supply. If the former Conservative government had had the courage, they would have just told JD Irving to go source the additional wood they were looking for from the private woodlot sector.
How about your climate change approach and Irving Oil? Can we square those issues easily in terms of the growth of that company and meeting climate change goals?
They’re the largest single source of carbon pollution in the province. Carbon pollution, unlike other air pollutants from the refinery, has never been regulated. So there’s never been a requirement to take action to reduce carbon emissions. Just like for other other pollutants, when you put in place regulations to reduce those emissions companies always find ways, as Irving Oil did, to do that and often do it in a way that saves them money. Pollution really reflects waste that’s going on in the process and often the companies discovered that they can actually reduce their costs by increasing efficiencies of the process that reduce the pollution that they’re currently causing. That’s what would happen in this case: a regulatory standard for carbon pollution and ratchet that down over time, the refinery would adapt to that.
What are the pillars of the Green platform on greenhouse gas reduction?
We’ve got three main sources in the province. One is the Irving Oil refinery, a second one is transportation and the third is emissions from power generation.
We want to see a portion [of a carbon tax] go into helping us put in place a public transportation system that would really enable people to get around the province in ways that they haven’t been able to do without a car. If you’re going to say, as we do, that public transportation has to become seen as a public service, then we need to ensure that people can get from here to there when they can’t afford a car or they would rather not drive their car.
We need to give the Department of Transportation and Infrastructure a mandate to oversee that so that you have a bus service directly from Fredericton to Miramichi, or that you have a ferry service from Campobello to the New Brunswick mainland, or that you have a rail service in the province that actually serves the transportation needs of people locally rather than what we have now, which is a poor excuse for rail transportation.
We would use the Electricity Act, as it’s been used in the past, but actually ratchet it up over time, to increase the targets for the percentage of electric power that’s provided to us from NB Power from renewable sources. There’s a very old, modest target that’s pretty well been achieved in the Electricity Act. We would increase that significantly so that it would be 50 per cent by 2025 and ratchet it up from there. Ultimately, down the road, our electricity system would be 100 per cent renewable power.
What are the economic opportunities for private-sector companies in the renewable energy sector?
Well, you look at NexGen Energy, (since rebranded The Smart Energy Company), Mark McAloon’s business, and the investors he’s got there. Their vision and what they’ve been doing is pretty inspiring. They finalized the first solar farm in New Brunswick and made a significant effort to try and source as much of what was needed to establish that solar farm locally. They worked with a local metal fabrication shop in Sussex to design the metal support system, rather than having to rely on importing that from elsewhere…And NexGen isn’t the only company. I’ve met a number of young entrepreneurs who see this as a real opportunity in New Brunswick and are trying to gear up.
We need to look at economic development through an additional lens. We’ve always been a trading a province. Indigenous people traded across eastern North America and then in the 1500s started trading in Europe. We had one of the biggest trading merchant fleets in the world in the 19th century. So we’ve always been a trading place, but what we’ve lost over some decades is any focus on strengthening our domestic economy. That’s something that we would focus on because we believe you could see really rapid results growing local economies by displacing 10 per cent of our imports as a target with products and services from increased local production and provision.
We [believe] that would bring really quite positive benefits. There have been two studies done – one at the University of Moncton and one done for the Center for Local Prosperity Nova Scotia – that looked specifically in New Brunswick. They both line up pretty close together. So with the 10 per cent increase in local production and provision of services to replace 10 per cent of our imports, they project we would create 14,000 jobs in New Brunswick in about six different sectors, generating close to $1-billion dollars in new wages.
In your platform, you specifically address agriculture and food-related businesses.
That was identified in the studies in terms of [the province] becoming more self-reliant with food in New Brunswick. We’ve already seen that in some ways with beverages, at least with beer and more increasingly with our new distilleries and wineries. But, there’s so much growth potential in the food side that remains untapped. But that’s just one of six areas [identified in the Green platform]. We were talking about local renewable energy earlier. The studies also identified areas like light manufacturing for example. I’ve talked to a number of people trying to start small manufacturing operations here and just couldn’t get the support or interest they needed and ended up establishing them outside of the province in Ontario, Newfoundland and Nova Scotia.
The way to really prime the pump is to ensure that we’ve got some large anchors at the outset of implementing this important replacement strategy, which will be government procurement – requiring hospitals and the school system and jails and community colleges to increase their local procurement by 10 per cent and encourage municipalities and First Nations and universities to do the same. When you get a couple of large anchor institutions like that, it helps prime the pump locally to get things moving. That would be the approach we would take.
Are you optimistic about turning the minds of New Brunswickers toward developing a different kind of economy and tackling things like reducing greenhouse gas emissions in an aggressive way?
I hear and see what people are doing locally all over this province. The interest and enthusiasm for building local economies … is widespread. There are all kinds of people initiating the startups, both on the business side as well as some social enterprises, in some of these areas we’ve been talking about.
But they need a provincial government that is there as an ally that’s actually focused on supporting them. One of the things we’ve said in our platform is we would model a program that’s been quite successful in Nova Scotia, and that is to redirect loan guarantees to smaller businesses, co-ops and social enterprises – particularly those who are helping to displace imports, whether they’re startups or expansions of existing businesses. That program has had some really impressive results from the analysis that has been done. In Nova Scotia, that program has been delivered by the credit union system, but the loans are guaranteed by the government, and it’s really worked quite well.
This was an edited and condensed conversation with Green Party leader David Coon, part of a series of interviews with provincial political leaders in advance of the September 24 election. Next up: Liberal Party leader Brian Gallant.