Recovery Depends On How Fast Moncton Gets Back To ‘Business Of Immigration’
MONCTON – Business leaders and economists led discussions around Covid-19 recovery Tuesday in a virtual Economic Leadership Town Hall attended by approximately 70 people.
The event was organized by the Chamber of Commerce of Greater Moncton (CCGM) and 3+ Corporation, which are two of the members of the Southeast Economic Recovery Task Force.
“The idea behind today’s town hall is really to provide members of the Greater Moncton business community with access to some of the region’s leading economic and business voices as you prepare to re-open and recover from Covid-19,” said CCGM CEO John Wishart, who was facilitating the town hall.
Presenters included David Campbell of Jupia Consultants, economist and author Richard Saillant, Medavie CEO Bernard Lord, and Jocelyne Dupuis, property manager for Adelin Properties and chairperson of Downtown Moncton Centreville Inc.
Campbell presented his view of how the pandemic will affect the Greater Moncton area, which was “in the middle of a growth spurt” that’s now dampened.
Greater Moncton’s real GDP had been on the rise for a few years, and it experienced the highest population growth in a single year in 2019 with 3,067 people added. Immigration was a key contributor to that growth.
Campbell said Statistics Canada shows the number of employed people in the region only declined three percent year-on-year in April, based on a three-month moving average methodology. However, Campbell expects that figure to be closer to between five and 10 percent if the three-month moving average is discounted.
While that’s “very significant,” he said it’s not as deep a decline as some have predicted.
“I think a lot of that has to do with the fact that a lot of employers have kept their employees on the payroll with government support, and there have been other efforts to keep employment up during this period of Covid-19,” he said.
Still, he expects a significant decline in immigration, temporary foreign workers and international students to slow the economy, with the latter also harming the post-secondary education system and some business sectors across the province.
Some industries like retail, entertainment, personal services and others will reopen but at different rates, some much slower than others. The hard-hit tourism sector will also negatively impact the economy.
Governments should pay particular attention to export-based industries, including those exporting services and those exposed to global events. Sectors that employ a lot of people, like insurance, retail, hospitals and federal government administration also need extra attention.
“These are sectors that we have a very high concentration of employment and if they are harmed, in terms of their local or exports market, it will hurt the overall economy here in Greater Moncton,” he said.
Campbell echoed fellow economist Herb Emery, saying smaller urban centres across Canada could be better positioned for growth post-pandemic.
“A lot of the concentration of the pandemic has been in the largest urban centres not just in Canada but around the world, and this might start to make smaller urban areas like Greater Moncton more attractive, moving forward, for population growth and for investment,” he said.
Saillant’s presentation focused on New Brunswick’s existing challenges that could be exacerbated by the crisis.
New Brunswick was “more or less at full employment” when the crisis hit, with a tight labour market where employers were scrambling to look for workers. The tightness is due to its aging demographics.
Even as in-migration stabilized the population growth and labour force, and reversed a decline, the aging population is causing economic shifts in other ways.
The province’s private sector hasn’t grown since the recession in 2008, while the public sector expanded. Local demand is also increasing, as opposed to exports.
“As populations have aged, more and more the demand in the economy has shifted from workers to people in retirement,” he said. “If your private sector is not growing and you have more demand coming from local consumers, what’s happening is you have a re-organization in your private sector economy.”
Saillant argues that New Brunswick has been de-industrializing over the last decade, “meaning that our capacity to earn currency from exports has been reduced.”
Going forward, New Brunswick’s challenge would depend on how long it can absorb the slack in its labour force, and how quickly Canada can “get back to the business of immigration,” he said.
“We have so much uncertainty that at this point that all we can do is focus on how we can restart properly and make sure that we do the best job possible here locally,” he said.
The Conference Board of Canada expects a strong rebound next year for New Brunswick. A 3.3 percent real GDP decline in 2020 will be offset by a 4.8 percent increase in 2021, before settling into around 1 percent growth a year.
But there’s no doubt government spending during the crisis would cause deep deficits, more so for Ottawa than Fredericton, they said. But both economists agree tightening spending too soon could dampen a much-needed economic revival.
“I think the federal government has no choice but to be there and support Canadians and Canadian firms in a very difficult time. If that doesn’t happen, we’re in for a very, very dire situation in this country. There is a risk that we could remove the stimulus too fast,” Saillant said.
Luckily, Canada is one of a handful of countries with an AAA credit rating. Saillant is more concerned that the country’s debt-to-GDP ratio will grow from around 31 percent to around 50 percent. If Ottawa is in a bad fiscal position, New Brunswick – already struggling financially and demographically – may not get the type of federal transfer it needs to sustain its population, he said.
Campbell notes that going forward, local governments should look at strengthening digital and telecom infrastructure. Saillant said infrastructure investments should also reflect local demographic realities, and address the needs of newcomers. That includes housing as well as soft infrastructure related to linguistic and cultural needs.
Businesses Should Be Flexible, And Listen To Client To Find Opportunities
Lord shared Medavie’s approach to dealing with the pandemic. With 6,500 employees across eight provinces and nearly half of them in New Brunswick, it started planning in January.
It created a three-phase response focusing on readiness, business continuity – the phase it’s in now, and recovery. It set six priorities, the first being the safety of all involved, followed by maintaining the services that people depend on, keeping a strong capital base, not laying off any permanent employees unless they want or need to stop working, supporting the community, and preparing for recovery.
The company put most employees to work from home while ensuring enough personal protective equipment are prepared for frontline staff.
It’s also reviewing its 2020 corporate strategy to assess what needs to be accelerated or eliminated and to see where opportunities lie.
One of those opportunities, which is accelerated by the crisis, is virtual health care, Lord said.
“We’ve made that available to our clients from a Blue Cross perspective. We’ve also been working with governments to make more virtual offerings available through our Medavie Health Services offering, and we’re looking to make new investments in our systems, in terms of innovation, to make that available to more people as well.”
So far, investments in innovation and digitization, as well as a few good years, have helped the organization run smoothly. But Medavie is expecting Covid-19 uncertainty to continue clouding its operations. That’s why it’s important to be flexible, adaptable, and accepting of uncertainty, Lord said.
“The truth is most of us don’t really know exactly what will happen and we can only plan for different scenarios and adapt to a relapse,” he said, adding that it’s important the private sector play an active role to find solutions to problems that may pop up from here on out.
“The key component of this is recovery is not going back to the past. That’s true for us and I believe that will be true for the economy overall,” Lord said. “Normal will not be what it was like before.”
Dupuis, whose company owns several multi-tenant buildings in Greater Moncton, said uncertainty is making it nearly impossible for small businesses to plan. But they can rely on close relationships with clients.
“It’s really about knowing who their clientele is and knowing how they are going to operate. So if you are a retailer locally, are your customers going to want to come in? What products or services are they shopping for online?…and getting the message out there that you’re here for them and you’ll adapt with them,” she said.
“The important thing right now is that you do something. You don’t need to find solutions for everything all at once.”
Lord agrees, saying it’s important to listen to clients and employees and to communicate more with them.
Small business owners that have been able to pivot should also take the time to reflect on the sustainability of their new revenue models and any practices that need to change to increase resilience. Dupuis also encouraged small businesses to speak up about their concerns.
“As our leaders in economic development look to the future, we have a unique opportunity to guide them and help them shape our environment,” she said. “We will be the one to influence the built world around us.”