Wicked Ideas

Hey New Brunswick – You Owe Us Big Time!

We’re one week into the New Brunswick provincial election and we’re already in the hole.

Debt. New Brunswick’s got a lot of it and it’s limiting our choices regarding what we want New Brunswick to become over the next four years. According to the Finance Department’s pre-election fiscal outlook, the province’s debt will climb to $12.2 billion in 2015. It’s an amount few of us can visualize, other than to know that’s a heck of a lot of money.

One way to break it down is to divvy out the debt across the New Brunswick population. That figure, the net debt per capita, illustrates the size of the debt in relation to each of us. Right now the net debt per capita sits at about $15,500 and it’s on the rise. By this time next year it will be just over $16,000. You got an extra $16,000 kicking around? I didn’t think so. How about an extra $64,000? That’s what a family of four will owe. Happy New Year to you too.

With that much debt hanging over us it limits our choices – unless we radically change the way we do things in New Brunswick. How do we do that? Well, to start we need to limit our spending and we desperately need to make more money. That’s pretty basic and it’s what all of us do when our credit card bills or bank credit lines get too large. Cut expenses and raise income. However that just solves our immediate problem – lowering our existing debt.

That shouldn’t satisfy any of us. Getting out of debt is one thing – staying out of debt is an entirely different conversation. To do that we need to build a province where people can generate more wealth for themselves and enjoy life. I’m a big fan of enjoying life. Why else live in New Brunswick –  out here on the edge of Canada – if you can’t have fun? Might as well pack up and move somewhere with more services, more money and more stuff to do. Which is, of course, what so many New Brunswickers are already doing.

The above infographic is our cheeky attempt to start thinking about New Brunswick’s money problems in a different way. Laptops in schools and healthy living programs are two ideas we hear a lot about when we travel around New Brunswick but neither is ever at the top of anyone’s list of things we need. They always end up in the hodgepodge of items politicians like to label ‘wants’, which in New Brunswick is code for ‘we can’t afford it’. That’s the debt talking, it limits our options.

However, relative to the net debt, the cost of these items is small and both have the potential to lower our costs in health care and education – the two largest items in the provincial budget. Sounds great but until we’ve got the debt under control, we can’t begin to talk about new investments.

There are examples for us to follow. Over a three-year period in the mid-1980s New Zealand’s Labour government radically changed the country’s economic structure under the direction of Prime Minister David Lange and Finance Minister Roger Douglas. Faced with a staggering public debt, the result of years of government intervention in the economy, Lange and Douglas moved quickly to reduce the size of the state, by instituting deep reforms to the welfare system, reducing the civil service and ending many economic controls. A decade later, Estonia followed a similar route. In 1991 it emerged from the Soviet era with a crippling debt and a society out of step with the modern world. In less than two years Prime Minister Mart Laar and his government introduce a flat income-tax, free trade, its own currency and privatization.

That’s the kind of conversation we need to have over the next month and in the years ahead. We need fresh new ideas to get out us out from under our $12 billion debt and to generate more personal wealth.

We owe it to New Brunswick.

Lisa Hrabluk is the founder of Wicked Ideas. Follow her on Twitter @lisahrabluk.

 

Wicked Ideas’ 2014 election series is financially supported, in part, by the New Brunswick Business Council. Wicked Ideas retains full editorial control of all content and members of the New Brunswick Business Council are not consulted or informed of Wicked Ideas’ content prior to publication. 

 

 

Lisa Hrabluk

Writer. Social Thinker. Founder, Wicked Ideas. Find me hanging out where culture, people and ideas collide. wickedideas.ca
@lisahrabluk

8 comments

  • Thanks for writing this article. I’ve been scouring Twitter and the NB political party sites to find this sort of ideology (guess what..found nothing). We need a paradigm shift in a big way. Trouble is, I don’t know if NB currently has any contenders that can pull this off.

  • Absolutely agree, Lisa. Figuring out how to want less and enjoy life more will be one of the greatest challenges. Unfortunately, I think it involves gritting our teeth and shifting our priorities both in governance and at home. All too often I see people living beyond their means – mortgage poor, two (or three) car payments, credit card debt (as you mentioned) and little or no increase in income – only banks that are prepared to extend line of credit limits. These habits also exist similarly within our government. In a nutshell, changing our behaviour and even our culture is required. From a leadership perspective we need someone that can see the big picture and understands how to pin point the systemic issues and execute a proper vision and plan. And of course, inspiring everyone in the process. No easy task! 🙂

  • I don’t think there is any silver bullet to reverse the international trend from country to city. However, I do see have some thoughts on how the Maritime economy might be improved.
    1) isn’t it ridiculous to have four Atlantic Provinces for fewer that 2,000,000 people? The economy could be more competitive with one. I love New Brunswick but no one even knows we are here.
    2) Imagine if health care was a national, instead of provincial, program. Maritimers have, I think a special culture of care giving. If health care were national, the Maritimes could market itself as a retirement haven. As it is, old people are a huge liability to New Brunswick.
    3) The St. John River valley has been generally more prosperous than the Northern and Eastern areas. One reason is that the major industry on the West side is McCains. They process potatoes and grow some but contract with private, independent farmers for most of the crop. What if the Province of New Brunswick sold all the Crown Land to private, independent owners with the proviso that forest products processors like sawmills and pulp mills could not own forest land they don’t already? I think it might work better if processors had to negotiate for supply with woodlot owners and the market would decide who got the wood instead of bureaucrats and politicians. Sounds radical but private ownership works in many other parts of the continent and the world. As it is, I don’t think the Province realizes much profit from owning Crown Lands. Selling it and taxing it and regulating it would probably be better financially for the government.
    4) Currently the province spends money on all kinds of economic development which again involves politicians, bureaucrats and local committees making decisions about handing out money. I think programs that encouraged all businesses, rather than the chosen ones, would make better economic sense.
    One example is the shameful double property taxation of commercial properties. All businesses pay more for less service than residential owners do. They pay provincial as well as municipal property taxes and don’t even get garbage removal included. Thus every small business that owns or rents pays roughly double property taxes. Doing away with that would benefit all business and make them more competitive locally and for export.
    The plethora of economic development programs includes local ones that are supposed to stimulate local business development with grants. The problem there is that a great many of these grants go to businesses that compete with existing, often struggling, businesses already in the market. It is harmful and discouraging to local businesses to have their own tax money used against them.
    Business Improvement Area taxes were originally conceived to provide money for independent merchants to provide attractions and promotions like mall tenants could with their communal funds. What actually happened is that many of the merchant groups used the tax money to set up offices and hire staff leaving little or nothing for actual promotion and marketing. One even had its members selling cookbooks to provide money to sustain the office that wasn’t doing anything that made the members’ cash registers jingle.
    Doing away with the BIAs would save every business money.
    5) Why does a a province with 750,000 and shrinking people have so many police forces? Why not have one with detachments across the province. It could be more efficient and sophisticated and would give individual officers the opportunity to work their way up without having to change employers.
    6) Why does the province own retail liquor stores? If they got out of the business, it could help many of the convenience stores and gas stations survive which they are finding very difficult. Letting Walmart and Costco and the supermarkets carry liquor would mean we could get the benefit of their buying power and the variety of products they could provide as they do now with the products they sell. An added benefit is that it would reduce the potential for corruption. As it is now, a committee decides what brands of liquor and wine are available. That kind of structure is a magnet for corruption.
    7) Why is Atlantic Lotto immune from transparency? Surely any publicly owned body with control over so much cash ought to be most transparent. Again, a cash cow that big is a magnet for skulduggery. Each of the four Atlantic Provinces finance ministers cops out saying they would be all for it but the other three don’t agree. Time to call that for the nonsense it is and make every Atlantic Lotto transaction and contract and hire wide open to the public.
    8) One of the things that holds New Brunswick back is the myth that we are Canada’s bilingual province. We are not. We are dualingual, duacultural and dual governed. What this means in practical terms is that for many Anglo and Franco people employment opportunities are severely limited. That is one of the factors that drives so many young people away. Even if one partner in a couple is bilingual, if the other is not, they may have to leave for a place where both can find work. It is in the national constitution that New Brunswick has go provide services to its citizens in the language of their choice. Time to get serious about making all of our citizens able to do that. Segregationists currently call the shots and protect their little enclaves. It is time to get past the idea that French and English cannot become bilingual in the same school system and find a way that they can. We simply cannot afford the historical prejudices that made that true and continue to make Francophones accept it as gospel. It is a mountain that has to be climbed.
    9) I believe New Brunswickers can do anything. Just browsing social media reveals all kinds of talents that are world class but under utilized and unable to earn a living wage in our tiny markets. More proof of this is the great success of the people who have to leave the province they love but have huge success all over the world. One thing we ought to be doing is asking these people to mentor us. I know they are willing to do it and it is shameful we don’t ask. I personally know of several provincial expatriates who know the routes that lead to success.
    To sum up, I think government’s role ought to be to provide as efficient an infrastructure as it can for citizens and business so they can compete with each other and in the wider market place most efficiently.

  • Great comments David and Derek, thanks for sharing! Culture shift and major changes – something that requires political courage and leaders who can sell an idea or vision. Let’s keep the conversation going.

  • Great article, Lisa, and I like a lot of the comments/ideas posted after.

    However, I would like to add a note in response to David’s idea of privatizing the Liquor Stores. I am not a fan of replacing decent paying jobs with low paying gas and convenience store jobs. NB Liquor makes a bit of a proft each year, meaning they can afford to pay these salaries. Turning it over to corner stores and gas stations and the resulting Walmartization of salaries will not help the NB economy. We need workers with decent paying jobs and money to invest in the goods and services of our province, not just store owners.

  • Thanks Chris. I suppose the question to start that conversation is should government be in that business and then go from there. Personally, I don’t think job creation should be a government goal; it should be serving citizens. From there the question is how best can NB Liquor best serve citizens.

  • Wow David, you sure know how to open big! I think your first couple of ideas would require constitutional amendments (Maritime Union and a national health care program) so, um, good luck with that. : )
    In all seriousness, there are certainly ways for the three provinces to standardize a whole host of regulations and services – just like they did with Atlantic Lotto all those years. As for Atlantic Lotto, I am a big fan of transparency so yes to that and all other government agencies, boards and commissions. It’s as easy as ABC (see what I did there. Policy nerd humour).
    Privatize the Crown forests? That’s a radical idea and destined for a heated and emotional debate that, in the end, I’m unconvinced would produce enough benefits to have been worth the fighting that war.
    I’m not sure that BIAs fall under provincial jurisdiction or any jurisdiction for that matter. Don’t the local business people just decide to support it through their fees?
    Anything that opens up New Brunswick, and let’s face it, Canada’s liquor regulations is worth a toast – so I’m with you on that.
    Mentoring from away – sounds good, can’t hurt to ask.
    The French/English divide. Oi. Okay here goes: I agree that New Brunswick should get serious about ensuring all citizens are bilingual or multilingual if their first language is neither English nor French. I also agree that we need to build bridges rather than barriers to learning another language and, I would add encouraging greater exchange between English speakers and Acadian/Brayon culture.

    Generally I get the feeling you are ‘sick and tired and you’re not going to take it anymore’ about government in general, and in particular a political culture that you believe is an impediment to economic success in New Brunswick. That is not an uncommon sentiment. Rebuilding trust should be part of each of the parties’ platforms because that is sorely needed.

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