In mid-January, Premier Graham introduced his “Self-Sufficiency Task Force”.

Its mandate is to assess the economic and fiscal challenges facing the Province, convey those challenges to New Brunswickers and seek input from them as to possible courses of action that could bring the province to self-sufficiency by 2026.

The first step in addressing the issue of self-sufficiency is to develop a consensus on what we mean by the term. Webster defines self-sufficiency as the ability to supply one’s own needs without external assistance. Others define self-sufficiency as the circumstance of becoming economically independent of state subsidies or foreign aid.

Self-sufficiency could also imply construct of an economy that is self-sustaining and independent of outside markets or resources.

In theory, we could isolate ourselves from the rest of the world, pull down the shades and concentrate on food production, shelter and renewable energy. That would mean giving up many of the foods we consume such as citrus fruits from Florida, grapes from Chile and vegetables from California. It would close the door to oil from Venezuela and the Middle East. We would have to find ways of generating electricity without oil from offshore, natural gas from Nova Scotia or uranium from Ontario.

The reality is that New Brunswick is not blessed with huge or indigenous energy resources.

While the definition may not be perfect, I think we need to adopt the definition of self-sufficiency as the circumstance of becoming economically independent of federal equalization payments. That sets the bar against which economic performance can be measured.

The Province of New Brunswick is substantially dependent on the federal government for revenue to fund its programs and services. Nearly a billion dollars comes in the form of health, social transfers and conditional grants. These are programs available to all provinces and might better be described as cost-sharing arrangements.

However, another $1.4 billion comes from the federal government in the form of “equalization” payments. This is money transferred to underdeveloped provinces to enable them to provide public services on a par with the rest of Canada. Equalization payments account for about 22% of the New Brunswick Government’s total revenue and equate to 50% of all taxes collected by the Provincial Government.

Therein lays the challenge.

To be self-sufficient, New Brunswick would have to increase its net tax revenue by 50%. Francis McGuire, Co-Chair of the Self-Sufficiency Task Force has suggested wage increases of 20%, a population increase of 15%, tax-driven investments in technology, plants and equipment, the attraction of large scale global corporations, an increase in exports and an influx of higher-paying jobs might lead us to self-sufficiency. That may be an over-simplification of the challenges ahead.

If we assume Mr. McGuire’s population growth projection would increase the employed workforce by 45,000 (above the current 350,000 employed) people and further that they would be high earners who would pay 50% more in taxes and further we assume wage increases of 20% would result in 20% more taxes paid, we could probably reduce our requirement for equalization by 50 to 60%. That’s not good enough. We need something more dramatic.

A media colleague of mine suggests there must be no sacred cows in this debate. I agree with her. So where do we find the other 40% in tax revenues?

If we struck oil, we might find them in royalties. If we found a way to profitably harness the tides, we might realize royalties from the export of electricity. If we developed the technology to store large amounts of electricity for extended periods of time we could sell or license that technology around the world.

Some have suggested that the only way we can remove the need for equalization is to move toward full economic and political union with the other Maritime Provinces. Others suggest that to attract major investment, we have to create critical mass, a large urban centre that could attract the best and brightest, serve as an incubator for economic development and create markets for our rural economies.

One idea that interests me is the suggestion by a group of ex-patriots that we leverage our resources to create a knowledge economy based on the development of technologies that would address the causes of climate change and the need to efficiently harvest and employ renewable energies (solar, wind, tidal, wave, wind, etc).

It’s hard to argue against Maritime Union but the reality is that it’s a rare circumstance when we can unite our municipalities, let alone three or four provinces in a single venture. That said, I think there is real merit in growing a major, world-class metropolis in New Brunswick that would become the vortex of economic development in the province and eventually all of the Maritimes. Imagine a city of half a million people in New Brunswick and how significant it would be to the attraction of people and investment.

Here’s how we might create such a metropolis:

• move the University of New Brunswick to Moncton;
• move the Provincial Government to Moncton;
• centralize healthcare research and delivery in Moncton;
• build high-speed rail and highway infrastructure to bring the rest of New Brunswick to within 90 minutes of Moncton;
• evolve Greater Moncton International Airport into a true regional airport connected internationally to the United States, Europe and Asia;
• establish a world-class research and development capacity that would focus on clean energy technology and the efficient harvesting of renewable energy;
• partner with global manufacturers of automobiles and aircraft to develop significant and permanent clean air manufacturing technologies in Moncton;
• build a community that embraces the arts and make Moncton the cultural homestead of Atlantic Canada.

A bit off the wall, yes but conventional thinking won’t do the trick.

W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com Atlantic Insight is a published Blog inventory of opinion articles published weekly in New Brunswick's print media as written by W.E. (Bill) Belliveau, who is a resident of Shediac, New Brunswick, and small business owner, operating his Moncton-based marketing consultancy, Bell Strategic. He can be reached by e-mail at bill.bellstrategic@nb.aibn.com

Labels: Economic Development, New Brunswick Economy, Self Sufficieny Strategy