N.B. Premier Projects Smaller Deficit, Invests $20-Million In Nuclear Technology
FREDERICTON – The New Brunswick government’s current projected deficit sits at $13 million as the province remains resilient in the face of the Covid-19 pandemic, said Premier Blaine Higgs in his State of the Province address Wednesday.
At the beginning of the pandemic, Scotiabank predicted the province would see an 8.4 percent drop in real GDP and a deficit of $1.2 billion. But Higgs said the government’s economic outlook suggests the GDP decline will be only about half of what was predicted, and recovery have been swift, with employment now at 99 percent of pre-pandemic levels.
“We are being responsible, all the while delivering economic recovery and at the same time, making progress on the pro-growth agenda I announced at the State of the Province a year ago,” he said.
Higgs said the province didn’t cut any capital spending planned for fiscal 2020-2021 and didn’t raise taxes. But it spent only about $202-million more than planned due to the pandemic.
“It’s because we had some room in our budget. We’re not paying down the debt, which we planned to. We don’t have $130-million surplus like we planned to,” he said in a session with reporters after his address.
The Canadian Center for Policy Alternatives said in a report last month that New Brunswick spent the least money on Covid-19 measures among the provinces, and left much of federal dollars on the table. Higgs’ oppositions Roger Melanson (Liberal) and David Coon (Green) also called out the lack of spending.
Higgs maintains that even with little spending, his government has been able to manage “good results on the economic side.” He won’t commit to balancing the budget though he said it’s possible to do so by the end of the year. For now, balancing the budget is not a priority, he says.
“The priority for us was to spend the money necessary to help the citizens of this province,” he said, adding that it’s still unknown how the Covid-19 variants will impact the province.
The Premier highlighted supports given throughout the pandemic in his speech. That included up to $50-million in working capital loans for business grants, non-profits, emergency funds for individuals impacted by the pandemic, and wage top-ups for essential workers.
“Our largest benefit, however, has been wherever possible throughout this pandemic to keep businesses open, and to avoid complete shutdowns,” he said.
While rising cases put Edmundston on lockdown and Moncton in red, things are now looking up. “The focus that we have is to wherever possible, to keep the economy moving, while at the same time, balancing the health and safety of the citizens of our province,” said Higgs.
He said confidence in the New Brunswick economy is strong, as seen in the high numbers of housing starts, real estate sales and price increases, building constructions and population growth. Higgs said real estate sales and prices are up 15 percent this year, with gains seen all over the provinces.
Moreover, he said the private sector in New Brunswick invested over $200-million in capital expansions, equipment for automation and productivity, as well as buildings and production lines. Since April 1, Opportunities New Brunswick’s clients created over 1,700 new jobs, adding over $219-million to the provincial GDP.
“New Brunswick is more attractive than ever thanks to our people, our businesses, and our stability,” he said, noting Moncton’s population growth and the increasing number of immigrants settling in rural communities.
However, he said with around 70 percent of New Brunswickers employed by small and medium-sized enterprises, it’s important to buy local and limit the spread of Covid-19 so those businesses can stay open.
He also wants to get more people into the workforce, noting that 80,000 New Brunswickers aged 25 and 64 are not working.
Moreover, he noted the advancement of key pro-growth strategies, including the launch of the NB First Procurement Strategy and the four-year Local Food and Beverages Strategy.
ONB was given a new mandate to help more local businesses find export markets. That happened mostly through virtual trade missions last year, but the companies that took part are projecting increased sales of $26-million stemming from those. Higgs said Saint John became the only major Canadian city to post an increase in exporters between October 2019 and October 2020.
ONB also runs the Business Navigator program, which was launched to help investors and existing businesses cut through red tape.
Additionally, Higgs remains committed to “aggressive” targets for immigration to boost the province’s workforce, and supported investment in broadband connectivity. The latter is something that proved very important during the pandemic, as many people were forced to work and learn from home.
“I’m confident we can have 5G connectivity throughout New Brunswick within three years, and we’ve met with major service providers committed to doing just that.”
But it’s not all rosy for the province where the lack of affordable housing and rent increases are posing a challenge, with calls for rent control getting louder in recent months. Higgs announced a 90-day review of the rental situation in the province that will include evaluation of the market, vacancy rates, rental fees, trends and the overall impact of the pandemic.
He also said local governance issues continue to be a challenge. He hopes to address that through a consultation process in the coming months.
Higher demands from an aging population on the healthcare system also still pose a major challenge, he said, adding the government remains focused on cutting wait times and funding opportunities to centralize some services, use technology and recruit specialists. The Department of Health is set to unveil its five-year addiction and mental health action plan, focusing on areas like improving access and same-day walk-in services for lower intensity needs.
Investment in Nuclear Technology
Higgs said New Brunswick is committed to environmental sustainability, noting it has reduced carbon emissions by 28 percent since 2005 and is on track to meet its share of the national target by 2030. But he’s concerned about the increase in federal environmental regulations, including in the oil and gas sector, saying provincial GDP is expected to fall 0.5 percent – or $208-million – by 2030, the second-worst in the country.
“Future federal plans around carbon pricing and clean fuel standards together will create a perfect storm in New Brunswick,” he said.
Higgs said new carbon rules would boost NB Power’s costs by 25 percent, and devastate the Saint John refinery, forcing New Brunswick to import oil products.
“We all recognize we must transition to a greener economy, but we must do so in a methodical way,” he said.
“Let’s have a plan at how we transition and do so that you can afford to live and work here in our province.”
In line with that transition to a greener economy, Higgs announced a $20-million investment into ARC Clean Energy Canada Inc., a Saint John-headquartered maker of small modular nuclear reactors (SMR). The funds will help ARC bring its SMR technology to market.
“We believe that it’s necessary to develop a clean, non-carbon-emitting future energy source because it cannot all be supplied by wind and solar. So this is a way to the future in a very different technology that allows a very mobile capacity for energy supply. And it could be a window for us to build our manufacturing expertise and capabilities in New Brunswick and have worldwide exports,” said Higgs.
That investment is conditional on ARC’s ability to match it. ARC plans to raise $30-million from private investors, said chairman Donald Wolf in a release.
“This funding milestone will play an integral role in the deployment of our proven, inherently safe clean energy technology in the late 2020s,” he said. “We believe New Brunswick possesses all the key pillars for success, including an experienced operator, a flexible workforce, the foundations of a future supply chain and an ideal [academic environment] to support development and innovation.”
The funds will allow ARC to begin the next phase of the design review by the Canadian regulator. The company was also funded by the previous provincial government.
“This is a significant step forward and provides a clear signal of government support that is important to private investors,” said President and CEO Norman JD Sawyer in the release.
ARC, Moltex Energy and NB Power last fall signed a memorandum of understanding with the province to create an SMR cluster in New Brunswick. Higgs said he’s expecting federal funding for Moltex, which also makes nuclear energy technology, to come soon, adding the province would not be able to do this without federal backing.
“We believe that both technologies have a place here in our development and going forward into this world of energy creation … I think we’ll hear in the very near future that we’ll see other private sector organizations come in to invest. And I’m very hopeful the federal government will as well because every indication is that that we will see them investing in an SMR cluster here in New Brunswick,” he said.
The premier said challenges related to the pandemic will continue “until the vaccines are present, and we’re able to reach at least a 70 percent vaccination rate.”
But he ended his address in an upbeat tone. He said the province has gone through tough times, but it will persevere.
“We will have vaccines administered this year, and we will see our province again, thrive and survive beyond where it’s ever been,” he said. “We will see a renewed New Brunswick that is going to meet not only the challenges of today but the challenges of tomorrow.”