Invest Now For A Future Of Growth
David Duplisea is the CEO of the Saint John Region Chamber of Commerce.
Twnety-twenty-three has the potential to be a year where the economy of the Saint John region grows even stronger and bolsteres the fortunes of the province along with it.
We have seen much good news on a number of fronts.
The phenomenal growth of cargo traffic with the expansion of Port Saint John, the return of cruise traffic, the new Lancaster logistics park, and significant capital investments from home grown companies like J.D. Irving, Limited. And now, the Saint John airport is eyeing a considerable expansion into logistics for air-related services and manufacturing, freight, and light industrial activity.
These bode well for our region and our province, and we will hear much more on these. However, there are also some worrying signs on the horizon.
By thinking and investing strategically, Premier Blaine Higgs and his cabinet have the power to set in motion changes that will benefit people across New Brunswick for this year and many years to come.
Our Chamber members have seen a number of concerning trends converging at the national, provincial, and local levels, from rising inflation and household debt to labour and housing shortages.
Economic analysts are united in their assessment of where these trends will lead if they continue unchecked: higher prices for everything from food, clothing, fuel and housing will leave consumers with less disposable income.
People with less disposable income will purchase fewer goods and services. Businesses, facing a triple threat of higher costs, reduced consumer demand, and labour shortages, will downsize or close their doors, increasing unemployment and indebtedness.
Federally and provincially, politicians have been tossing out ideas to reduce the personal impact of inflation on voters.
There has been talk of raising the minimum wage, or even implementing a “living wage” social policy that guarantees a higher standard of living with or without employment. There also has been talk of mandating an increase in the scope of benefits available to private-sector employees by requiring employers to offer paid sick leave.
I don’t think anyone would dispute the good intentions behind these proposals; they are sincere and well-meaning responses to the serious challenges that many Canadians are experiencing today.
But all these policy initiatives have a common shortcoming: each relies upon businesses to supply the capital investment.
How can such strategies succeed here in New Brunswick, when the majority of our businesses are small in scope and still struggling to make up losses incurred during the pandemic? We urge government to consult and work with business before any decisions are made, this is quickly getting into social development policy and we need to be careful to keep these distinctions separate.
There is a much better, more sustainable alternative.
That alternative is for the provincial government to invest strategically in measures that leave more money in people’s pockets and help establish our province as a competitive jurisdiction in which to invest, expand, employ, and innovate.
In times like these, it’s too easy to forget that the goal of provincial economic policy is not merely to survive; economic policy is one of the most effective tools we have for making our province a place where people want to live and work and invest and build sustainable communities.
I would argue that New Brunswick is in a better position to do so today than almost any other province.
Premier Higgs and his cabinet have worked very hard to hold spending down while investing in debt reduction. The results are similar to what happens when a consumer pays off an outstanding credit card balance: the more you put down on debt, the less you spend each month on interest payments and the more disposable income you have.
New Brunswick has a great deal of disposable income at the moment in the form of record budget surpluses and reduced interest payments.
Why not spend that money on measures that insulate New Brunswickers from the impact of inflation while creating the conditions businesses and individuals need to create a thriving economy?
Instead of raising costs for employers, Premier Higgs and his cabinet could lower the HST. Reducing the HST by even one per cent would instantly reduce costs across the board for all New Brunswickers, helping individuals and businesses alike.
The government could incentivize employment through income tax cuts targetted at those making less than $44,000 per year, enabling working people to keep more of their earnings and making work a winning proposition.
And in housing , why not incentivize the creation of new housing units and stability in rents so the number of people who want to live and work in New Brunswick can continue to grow?
The city’s request to the province to eliminate the goal posts on taxation levers is dangerous. If the provincial government adopts such a measure, and our region increases this multiplier at higher levels than Moncton and Fredericton, it could send a strong message that our region is closed for business. Not the message and brand we want at a time when there is so much positive happening.
Taxation remains among the top considerations for business looking to relocate, expand, invest.
This constant narrative from the region on the extent to which they can increase taxation levels on industry has created a climate of uncertainty and slowed interest in our region (versus other, neighbouring jurisdictions) The numbers prove that.
Commercial and industrial taxes for business already subsidize the services residential customers receive. The 2017 Kitchen & Slack report commissioned by the City of Saint John offers specific findings.
“A number of Canadian studies over the past two to three decades have compared the benefits received by residential properties compared to non-residential properties. In general, they have all concluded that the residential sector receives proportionately more benefits from local government services than the non-residential sector,” the report reads.
Our Chamber has been advocating for an alternative approach to municipal tax reform and equalization, which would give our region a larger percentage of the taxes collected and create an environment conducive to business. Business is not an unlimited trough to go to every time money is needed.
Government has more than one lever it can pull to move the needle of the economy. It needs to use the right tools for the circumstances we face, tools that will achieve the most preferential outcomes.
Let’s use the opportunity created by recent record budget surpluses to build a stronger, more sustainable economy – one in which individuals and businesses can thrive.
Huddle publishes commentaries from groups and individuals on important business issues facing the Maritimes. These commentaries do not necessarily reflect the opinion of Huddle. To submit a commentary for consideration, contact our editor, Trevor Nichols: [email protected].