Atlantic Insight, by southeast New Brunswick's W.E.(Bill) Belliveau who analyzes and comments on matters of public policy and the social and economic decisions taken, by all levels of government from local to global. Atlantic Insight Blog is a commentary on current affairs and changes in the marketplaces and/or in the business world. The impact of policy, decisions and changes are explored for their impact on the citizens of Atlantic Canada. You are invited to add your comments.
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Wednesday, June 09, 1999
Newspaper Should Improve Economic Knowledge
As a regular contributor to the letters section in local newspapers, on matters of community interest and public policy, I have observed a continuing interest with the subject matter referenced by some of the letters. They are re-published here as a public service.
Following is an article first published in 1999 and re-published here to serve as a reference on the issue.
The Editor, Moncton Times & Transcript
I'm somewhat intrigued and perplexed by your editorial of June 5th Voters must weigh factors (I've only just read it today).
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After months of criticizing the toll highway deal, the Times & Transcript says it's "... a very good deal for New Brunswick". -
After months of criticizing the RCMP replacement of city police forces in Moncton, Dieppe and Riverview, you say it was, in fact "the correct decision given the inability of the three municipalities to reach an agreement". -
After weeks of sensationalizing the Rocks management deal with Serco, you acknowledge that, in fact it has "... turned out to be an excellent arrangement for tourism".
This editorial suggests to me that either your editorial writers were out of sync with your news writers or the editorial is proof-positive that your paper was determined to defeat the Liberal government, regardless of the consequences for truth and credibility.
Aside from the above, your editorial goes on to say that "there is actually very little to choose between the Liberal and Conservative promises" the greatest difference being "that the Tories are promising a more regional approach to government and a greater reliance on local businesses to create jobs".
Now there's a deceptive understatement if I ever heard one.
Mr. Lord promised to remove the tolls from New Brunswick's Moncton to Fredericton four-lane highway. As columnist Michael Tutton says in today's Telegraph Journal, that will cost the Provincial Government (and you and me as taxpayers) $22 million a year, for ten years.
That could put the Government into a deficit position (leading to a lower credit rating and higher borrowing costs), reduce the dollars available for healthcare or lead to an increase in our taxes.
There are other options of course:
- the new Government could buy out the $150 million toll-based bonds and reissue them as Government bonds - adding to both the Provincial debt and the Provincial deficit (with interest payments that would have to be made to the new bond-holders).
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They could also go to Ottawa and ask a Liberal Federal Government to bail out a Conservative Provincial Government because they made a promise they can't afford to keep - hey, everyone knows that would work! -
There were other differences in the two platforms including a higher tax reduction promise by the Tories but the most important second difference was in the PC's approach to economic development and their promise to rely more on local businesses to create jobs.
That promise, although well-intentioned, ignores the economic reality of supply and demand.
Small businesses are created and succeed in environments where goods and services are required by large consuming populations, a large industrial complex or large government appetites.
On this basis, New Brunswick may have a problem growing new businesses from its existing local base. To put this in perspective, consider the call-centres that some would dismiss as inconsequential. They depend on a North American market and North American investment for their existence.
They were not created by the local business community although local businesses, including NBTel, supply many of the goods and services required by the operators and the people who work for them.
The existing government, consumer and industrial infrastructure in New Brunswick is not big enough to absorb new outputs from local businesses without the addition of new investment from outside the Province to create demand for those goods and services or without replacing existing purchases of competitive goods and services.
If New Brunswick is to grow and prosper, it must be able to attract new investment from outside the Region and it must produce goods and services for markets beyond its borders.
To rely exclusively on local businesses to create jobs is a recipe for disaster. If it was so easy, we wouldn't have so many people dependent on employment insurance and the seasonal harvesting of our natural resources.
Your paper has an opportunity to contribute to the economic development of New Brunswick.
Invest a little time to know and understand the economy and the people of this Province and then you'll be able to contribute to its success by recognizing and celebrating those who are willing to take a chance on the future instead of tearing them down for trying.
Bill Belliveau, Shediac, N.B.
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