Is New Brunswick Canada's future?
The news last week noted that the official unemployment rate in New Brunswick has just topped 10 per cent as the economy continues to shed jobs. One can only imagine the unofficial rate.
It's much the same in Ontario, as right-leaning op-ed writer and former George W. Bush speechwriter David Frum noted in his HuffPost blog piece last week. He correctly observes, "The outlook is most grim for Ontario. Like the U.S. Rustbelt, Ontario has been losing industrial jobs, and only new business investment can create the post-industrial jobs of the future."
He also says things are even worse in New Brunswick, Quebec and Nova Scotia.
Frum sees this as a tax reduction problem as in taxes should be lowered even further for corporations and wealthy individuals. Trouble is, it's failed dogma. Lower taxes do create more wealth at the top, but they don't necessarily produce healthier economies or societies, as we can see by what's happened in the U.S. over the past three decades. The wealthy are definitely wealthier, but the middle class has been collapsing steadily, especially the blue-collar middle class, with the predictable result that U.S. prisons are packed to overflowing, which can only be regarded as a spectacular waste of human potential.
So where has all that potential gone? In the capitalist mantra, follow the money. It's gone to wherever in the world the labour costs are least expensive.
Frum also alludes to the need to shift to a "post-industrial" economy. But the loss of the industrial economy is precisely what he is grieving and warning against. And offering lower taxes to stimulate growth. But instead, the tax savings have gone into offshore accounts, to the tune of $32 trillion that we know about, or invested in Asia where the returns on investment in the production economy are much higher than here.
Meanwhile, the only federal government we have (as a friend of mine calls it), is promoting the international sell-off of Canadian energy, mostly fossil fuel, as fast as it can. Case in point: also in the news last week was mention of an enormous new discovery of shale oil in the Northwest Territories, which is said to rival the giant Bakken field in North Dakota. Westerners are already getting ready to extend the Athabasca oil sands boom north.
Of course, getting at this oil will require fracking and pipelines and considerable environmental impact, but as the saying goes, "we need the jobs." And on the positive side, there could be jobs cleaning up the mess for decades or longer.
It makes southeastern New Brunswick's gas fracking potential look rather insignificant. There doesn't seem to be a very big payoff for investment. But I'm sure there must be a business case here or the developers wouldn't be pressing ahead.
That said, what's really going on in the province? On the energy front, Irving Oil shelved plans for a second oil refinery and its Repsol partner in the LNG facility is trying to sell off its majority share due to a glut of natural gas and weak global markets.
On the public sector side, the provincial government hung on to NB Power (due to public outrage about its sale) and missed a golden opportunity to do a deal with Newfoundland to hook up to Churchill Falls to provide a tie-line to the U.S. Eastern Seaboard. Instead, Nova Scotia did the deal and New Brunswick is still spending its cash on the refurbishing its ancient Point Lepreau nuke plant. To say that the province has no sustainable energy plan would be an understatement.
Fisheries and aquaculture (read: Connors and Cooke) are functional as is agriculture (McCain Foods) and forestry, sort of. Irving is currently hammering away at the N.B. forest products marketing board, which is trying to harmonize wood prices for small producers, a move which Irving, one strongly suspects, is resisting to keep producers disorganized and prices low.
What all this says is New Brunswick is in a post-frontier economy. Its oil resources are long gone, as are its old-growth forests and fantastically abundant fishery. What's left is essentially a resource-farming operation which one hopes might be sustainable in the long term. Resources, such as they are, have all been earmarked by the government and the big players.
That means there's not a lot of room left for small players or innovators. Especially in a province with a small population, low critical mass of innovators to begin with, and a built-in culture of nepotism and insider deals. In other words, there's a natural glass ceiling over the province, unless and until someone can find a way to end run the system. And the last time that was successfully done here was the development of the aquaculture industry.
So the best choices for job seekers here are probably in government, banking or big business, preferably on the finance side of the equation, fiddling the ciphers to neutralize the effects of the slow economic decline.
It isn't a pretty prospect, but it should serve to inform the rest of Canada what's to come when the vast pool of natural resources is finally depleted.
It's much the same in Ontario, as right-leaning op-ed writer and former George W. Bush speechwriter David Frum noted in his HuffPost blog piece last week. He correctly observes, "The outlook is most grim for Ontario. Like the U.S. Rustbelt, Ontario has been losing industrial jobs, and only new business investment can create the post-industrial jobs of the future."
He also says things are even worse in New Brunswick, Quebec and Nova Scotia.
Frum sees this as a tax reduction problem as in taxes should be lowered even further for corporations and wealthy individuals. Trouble is, it's failed dogma. Lower taxes do create more wealth at the top, but they don't necessarily produce healthier economies or societies, as we can see by what's happened in the U.S. over the past three decades. The wealthy are definitely wealthier, but the middle class has been collapsing steadily, especially the blue-collar middle class, with the predictable result that U.S. prisons are packed to overflowing, which can only be regarded as a spectacular waste of human potential.
So where has all that potential gone? In the capitalist mantra, follow the money. It's gone to wherever in the world the labour costs are least expensive.
Frum also alludes to the need to shift to a "post-industrial" economy. But the loss of the industrial economy is precisely what he is grieving and warning against. And offering lower taxes to stimulate growth. But instead, the tax savings have gone into offshore accounts, to the tune of $32 trillion that we know about, or invested in Asia where the returns on investment in the production economy are much higher than here.
Meanwhile, the only federal government we have (as a friend of mine calls it), is promoting the international sell-off of Canadian energy, mostly fossil fuel, as fast as it can. Case in point: also in the news last week was mention of an enormous new discovery of shale oil in the Northwest Territories, which is said to rival the giant Bakken field in North Dakota. Westerners are already getting ready to extend the Athabasca oil sands boom north.
Of course, getting at this oil will require fracking and pipelines and considerable environmental impact, but as the saying goes, "we need the jobs." And on the positive side, there could be jobs cleaning up the mess for decades or longer.
It makes southeastern New Brunswick's gas fracking potential look rather insignificant. There doesn't seem to be a very big payoff for investment. But I'm sure there must be a business case here or the developers wouldn't be pressing ahead.
That said, what's really going on in the province? On the energy front, Irving Oil shelved plans for a second oil refinery and its Repsol partner in the LNG facility is trying to sell off its majority share due to a glut of natural gas and weak global markets.
On the public sector side, the provincial government hung on to NB Power (due to public outrage about its sale) and missed a golden opportunity to do a deal with Newfoundland to hook up to Churchill Falls to provide a tie-line to the U.S. Eastern Seaboard. Instead, Nova Scotia did the deal and New Brunswick is still spending its cash on the refurbishing its ancient Point Lepreau nuke plant. To say that the province has no sustainable energy plan would be an understatement.
Fisheries and aquaculture (read: Connors and Cooke) are functional as is agriculture (McCain Foods) and forestry, sort of. Irving is currently hammering away at the N.B. forest products marketing board, which is trying to harmonize wood prices for small producers, a move which Irving, one strongly suspects, is resisting to keep producers disorganized and prices low.
What all this says is New Brunswick is in a post-frontier economy. Its oil resources are long gone, as are its old-growth forests and fantastically abundant fishery. What's left is essentially a resource-farming operation which one hopes might be sustainable in the long term. Resources, such as they are, have all been earmarked by the government and the big players.
That means there's not a lot of room left for small players or innovators. Especially in a province with a small population, low critical mass of innovators to begin with, and a built-in culture of nepotism and insider deals. In other words, there's a natural glass ceiling over the province, unless and until someone can find a way to end run the system. And the last time that was successfully done here was the development of the aquaculture industry.
So the best choices for job seekers here are probably in government, banking or big business, preferably on the finance side of the equation, fiddling the ciphers to neutralize the effects of the slow economic decline.
It isn't a pretty prospect, but it should serve to inform the rest of Canada what's to come when the vast pool of natural resources is finally depleted.
Interesting analogy. Thank you.
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