Commentary

Hardwire N.B. For Rapid Growth: Slow And Steady Won’t Win This Race

Avenir Centre in Moncton was packed with 600 job seekers and 41 employers at an employment fair November 1, 2019. Image: Inda Intiar/Huddle

David Campbell writes a blog about economic development in Atlantic Canada called It’s The Economy, Stupid.

One of the challenges of modern time is the lack of long term planning. It was not uncommon in the 1950s and 1960s for businesses and governments to have multi-decade plans. Some capital intensive industries (e.g. power generation) would routinely have 50-year business plans.  That all changed in the 1970s and 1980s with the rise of high inflation, policy changes that broke up large firms and engendered more competition and other factors.

Sometimes it is good to take a long look back so we can get some perspective on a long-term look forward. John Maynard Keynes once said in the long term we are all dead. While that may be true for the individual it is not true for the city, province or country.

Take a look at New Brunswick’s population over a 90-year period. Essentially slow and steady growth over an impressive six-plus decades – with a little dip around World War II. However, starting in the early 1990s the population stagnated around 750,000 and remained there for an equally remarkable 20-plus years. It has started to tick up slowly since and is now closer to 780,000.

Contrast this with the country overall. Just a straight line solid growth rate from the war onward. When David Foot fretted about demography, the federal government just ratcheted up immigration.

Contrast New Brunswick’s slow but steady growth and Canada’s strong and steady growth with Saskatchewan. I’m not a historian but I’m going out on a limb and linking this to the province’s heavy reliance on agriculture, minerals and more so recently oil and gas. But you can see this whipsaw up and down in the data going all the way back to the 1920s.

It seems to me institutional memory is an interesting thing. It may explain why New Brunswick politicians, bureaucrats and policymakers are so bearish on our growth prospects over the next decade and beyond and Saskatchewan politicians, bureaucrats and policymakers are so bullish on their future over the next decade.

New Brunswick has no history of big comebacks. Slow but steady growth through the 1950s before settling into a period of declining growth rates until outright decline and now relative population stagnation. If you were a politician, bureaucrat or policymaker do you have any historical evidence New Brunswick is in for a big swing back to 10 percent or 15 percent growth in the next decade?

Contrast that with our friends in Saskatchewan. When Premier Moe came out with the 2030 Growth Plan recently it was met mostly with kudos in his home province (a little more skepticism outside). It calls for the province to grow its population to 1.4 million by 2030 and add 100,000 net new jobs.

That is nearly 19 percent population growth over 11 years. But look at the chart below. Which province is more accustomed to big swings in population (and hence economic growth)?  Now the pessimist would look at the chart for Saskatchewan and say it is due for another decade of decline – based on history. But not Premier Moe. He’s on a growth kick.

In practical terms, New Brunswick’s population trajectory since the 1950s means we aren’t accustomed to periods of rapid growth. Our universities and colleges aren’t hardwired for growth. Our municipalities, for the most part, aren’t hardwired for growth. Our decision-makers are not hardwired for growth. Our infrastructure planning is not hardwired for growth. If you don’t believe me take a look at NB Power’s growth forecasts.

So along comes Campbell, et. al., waving arms and demanding growth of 15 percent or so over the next decade driven by a massive increase in immigration.

But we have no history of it. No institutional memory of it. No planning precedents. No history of rapid infrastructure expansion. And, most importantly, no history of flowing in tens of thousands of newcomers.

So can we break with historical inevitability?

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 editor Mark Leger: [email protected]