David Campbell is a Moncton area consultant on economic development.


He writes recently on the challenges of economic development in New Brunswick and refers to various attempts by governments over the last century and a half to foster economic development in this region. He makes a very interesting point when he talks about governments and business leaders marching off to Ottawa every decade or so in search of money for economic development initiatives.


I was one of those individuals in another life. Shawn Graham, Premier of New Brunswick is the most recent and significant individual in search of Ottawa funding, this time for his self-sufficiency initiative.


My experience in business and life suggests that Ottawa and its vast reserve of tax-generated dollars is not the economic development cure-all that some might wish for New Brunswick.


A self-sufficient New Brunswick will be one that becomes so in spite of Ottawa, not because of it.


A self-sufficient New Brunswick will be a province that generates tax income sufficient to make it independent of the federal government. That will come from private sector investments in innovation and new business development.


In recent weeks, we have witnessed the closure of pulp and paper mills in New Brunswick and government investment in others to keep them going.


Our forest industry is in jeopardy because the dollar has inflated and energy prices, chiefly the price of electricity are not competitive with those that can be found in some U.S. states, particularly those in the south.


Historically, New Brunswick, like much of Canada has relied on foreign investment, foreign businesses and foreign technology to fuel its economy. This is both good and bad as witnessed by the recent closures of the AbitibiBowater mill in Dalhousie and the closure by United Paper Mills Ltd. of Finland (UPM) of its mill in the Mirimachi. UPM, one of the world’s largest forest products company, announced within days of its Mirimachi closure, major new investments in Russia.


With all due respect to foreign investors and branch-office firms in New Brunswick, the only businesses that have survived long-term and grown in this province are family-owned businesses like McCain, Irving, Ganong, Pizza Delight, G.E. Barbour and a few shareholder-owned firms like Lounsbury, Blue Cross and Assumption Life.


Our major telecommunications utility (once known as NBTel) has moved its headquarters to Montreal-based Bell Canada Enterprises. The Fundy Cable Group is owned by Toronto-based Rogers Cable.


NB Power continues to struggle as a provincially owned utility.


This is not to diminish the contribution of outside business entities and/or investors but only to make the point that we need to reclaim the strong “head-office” economy that existed in this province nearly a hundred years ago, we need to produce goods and services that can be sold around the world if we want to become self-sufficient.


McCain is probably the best example of a global New Brunswick company. They have plants in some sixty countries and more than 20,000 employees around the world.

The Irving family has expanded into Quebec and the New England states but to my knowledge has no international business involvements beyond the purchase of oil and gas in the Middle East and other countries. Ganong and Barbour have expanded beyond their New Brunswick borders but remain fringe players in the global market.


That said, what can we do to take the province to the next level?


First we have to face the reality of a world where change is a constant. Then we plan our future without aid from the federal government. Assume there is a global climate change problem that we have to deal with sooner, rather than later.


Assume we have to compete globally to survive. Assume that we have access to an educated and skilled labour force. Assume finally that we can produce anything the world needs and produce it competitively or better than competitive in terms of quality and price.


How do we turn those assumptions into reality?


Start with our tax regime. Convince the federal government to restore the federal GST to 7% and use the revenue to reduce corporate income tax by a comparable dollar amount.


Reduce provincial corporate taxes to 10% and then to zero within three years (with incentives that would redirect tax savings into capital investment-technology/innovation). Rein in our energy costs. Improve our transportation infrastructure. Get the education thing right.


Encourage world-class development in our major centres.


I think self-sufficiency is achievable in New Brunswick.


Combine the lowest business-tax regime in Canada with a skilled and educated work force and a determination to be the best in the world and we’ll get to that destination.

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 mailto:bill.bellstrategic@nb.aibn.com

Premier Shawn Graham announced this week that he has appointed James Hughes as Deputy Minister of Social Development.

At first blush, one might yawn and say so what, who is James Hughes? For the record, Hughes is currently the Director General of the Old Brewery Mission in Montreal. I think he is one of the most significant appointments the Premier has made to this date.

Hughes will assume his new duties on March 31, 2008. Coincidental with his appointment, legislation will be introduced to change the name and mandate of the old Department of Family and Community Services to the Department of Social Development. Again, one might offer a big yawn but hold on, “development” is a lot more positive than the notion of social service-delivery.

The delivery of social services is a necessary and good thing but the perpetuation of such delivery is not. It’s time to break the cycle of poverty and dependency that exists in New Brunswick and indeed in many communities across Canada. There is only one way to break that cycle and that is with an infusion of education, training and some form of economic development that creates opportunity.

James Hughes has established a reputation as a dedicated professional and advocate for the homeless in Montreal and Quebec. Premier Graham is committed to the notion of a self-sufficient New Brunswick.

The fluently bilingual Hughes, put aside his legal career a few years ago to work in the community-services sector. Prior to joining the Old Brewery Mission, he was the founder and President of Youth Employment Services in Montreal and spent two years as Executive Director of EPOC Montreal, a training organization for young adults on social assistance who have not completed their basic education.

As head of the Old Brewery Mission, Hughes helped transform the way the mission works with homeless people in the city.

Education is the best way to break the cycle of poverty and dependence. Advancing computer and digital literacy to improve access to education, training and self-improvement is one way to move the ball forward.

I’m not immediately familiar with Mr. Hughes’ mandate but as I understand it, he will be advancing programs that recognize the value of education, training and self-improvement, particularly in respect to those who are marginalized and/or under-utilized in society.

We need to ensure that everyone in New Brunswick has an opportunity to improve their skills and their education to equip them for life in the new digital society. We need to start with basic literacy competence and then move to the training tools that enable people to use a computer and access the internet. Literacy and computer aptitude are essential in today’s economy.

People without these skills are limited in their employment prospects and more likely to become dependent on social services. We need to pay special attention to those who need help in developing a comfort level with computers and the skills necessary to access them.

The primary objective of the new Department of Social Development should be to replace poverty with education. Programs should help students, seniors, single moms and dads, the unemployed, aboriginals, new Canadians and others to gain the confidence and ability to operate computer programs, access e-mail, search the internet for information and acquire the skills that will assist them in finding a more positive future.

The Department of Social Development should be developing programs that focus on disadvantaged groups with special needs such as our unemployed youth, seniors, displaced forestry workers, seasonal workers, the under-educated, disabled people, long-term care-givers returning to work, first nations people who are isolated from the mainstream workforce and others who with some degree of up-skilling, could become more proficient members of the workforce and contributing members of society.

The new Department and its Deputy Minister should have a mandate to focus on people in need while transforming its service-delivery model from "welfare" to rehabilitation. In simple terms, that means it’s time to get people off welfare and into the workforce.

We must engage and empower these people to actively participate in improving their quality of life and self-reliance. If we can engage the most vulnerable New Brunswickers, we will build a more self-sufficient province and a more caring society.

A co-ordinated and proactive approach to reducing poverty offers the best chance for success. Soup kitchens, homeless shelters and welfare programs may be necessary but they are not solutions to the underlying reasons for poverty.

“Transformational change” demands that we engage the poor and unemployed and help them to escape from their circumstance. In so doing, we will advance the cause of self-sufficiency in New Brunswick.

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 mailto:bill.bellstrategic@nb.aibn.com

There was great irony in a Chicago courtroom on Monday. Judge Amy St. Eve was handing down her sentence to Conrad Black when she said to Black.

"Mr. Black, you have violated your duty to Hollinger International and its shareholders. I frankly cannot understand how somebody of your stature could engage in the conduct you have engaged in ... In the U.S., there's equal justice under the law. No one is above the law and that, Mr. Black, includes you."

The irony in Judge St. Eves statement is that she was lecturing a man who had been sentenced to jail and lectured on the application and rule of law in a country where the Administrative arm of government: the President; his Vice-president and others ignore the rule of law on a near daily basis and do so with impunity.

Consider the facts:
an illegal invasion of Iraq;
lies about weapons of mass destruction;
lies about an Iraqi connection to 9/11 to justify the invasion; authorization of torture;
clandestine transportation of individuals with suspected terrorist connections out of the country for interrogation by foreign governments;
unlawful confinement of enemy combatants without benefit of habeas corpus; unlawful surveillance of American citizens; politicalization of the legal process;
trials conducted by military tribunals behind closed doors; unlawful naming of an undercover CIA agent by an aide to the Vice-president;
denial of responsibility for that revelation, subsequent conviction of the perpetrator and pardon by the President;
awarding of billions of dollars in contracts for un-tendered services to war contractors;
the willful destruction of evidence (videotapes and e-mails); multiple refusals by Administration officials to respond to subpoenas;
illegal agreements to maintain long-term military presence in Iraq and on it goes.

Conrad Black was convicted on three counts of fraud and one count of obstruction of justice. I don’t condone these breaches of the law but consider: the fraud counts were related to the acceptance of non-compete payments concerning the sale of media properties; the obstruction charge related to the removal of files from Black’s Toronto offices.

It can be argued that non-compete monies should rightfully have gone to shareholders rather than managers of those companies. It can also be argued that removal of evidence subsequent to the launch of a formal investigation is a crime.

Mr. Black was exonerated on a host of more significant matters but he was convicted on the above mentioned circumstances. Again, I don’t defend him but the seriousness of his crimes seems minor compared to those of the Administration.

The actions and decisions of the U.S. President and members of his Administration have resulted in the deaths and maiming of thousands, yet he remains in office. Contrary to Judge St. Eves’ lecture to Lord Black, the head of government and his senior people operate above the law.

I have to wonder whether Conrad Black was unfairly targeted by the U.S. justice system because of his extensive media holdings in the United States, title or the fact he was not an American.

Prosecutors claim that the U.S. Government wanted to send a message that people can’t steal money from a public company and they have to take their duties to shareholders seriously. Oh, that these prosecutors could be so concerned about illegal wars and the profiteering of American war contractors.

In my opinion, Judge St. Eves delivered a sentence too severe for Black’s crime(s), particularly since inmates of the U.S. prison system generally serve 85% of their time as compared to inmates in Canada and the UK, who might seek parole after serving 50% of their time, particularly if convicted of non-violent, white collar crime. Surely Mr. Black’s corporate downfall and his personal disgrace will serve as deterrence to others.

With Black in the background, I couldn’t help but think of Brian Mulroney’s circumstance.

Both men have been highly successful, both have been brutally shoved from their perches of success, both have families who bare the brunt of their punishment. The former Prime Minister was impressive before the Parliamentary Ethics Committee on Thursday but he failed to persuade on some of the most sensory issues.

Why did he take three cash payments in the hundreds of thousands from Karlheinze Schreiber?

Why did he not report them and why did he not charge legitimate business expenses against the payments? No explanation, just apology.

Mulroney must have been a brilliant court-room lawyer. He came to the Committee well prepared; he delivered most of his testimony without notes, although he read from a series of media reports and affidavits to support his case.

He was at once aggressive and contrite. He was charming and vicious. He was clear and articulate but walked some very fine lines in answer to the specifics of events or circumstances. It was interesting to watch the Committee members. Some of them were intimidated by Mulroney or at the very least in awe of him and they weren’t necessarily Conservatives as one might expect.

Much of Mr. Mulroney’s testimony contradicted that of Karheinze Schreiber but little or none of it could be collaborated by third party witness or documentation. It seems clear, that issues surrounding cash payments to the former Prime Minister may never be resolved but there is at least one loose end that needs to be addressed.

Fred Doucet was a senior advisor to former Prime Minister Brian Mulroney and was also his chief of staff during the time Mulroney was the leader of the Official Opposition. Doucet’s brother, Gerry and the late Frank Moores, former Premier of Newfoundland were partners in a lobby firm known as Government Consultants International (GCI).

Schreiber says he paid millions to that firm to lobby the government of the day on Airbus.
Doucet was present at least one of Shreiber’s cash transfers to Mulroney. He needs to appear before the Parliamentary Committee.

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 mailto:bill.bellstrategic@nb.aibn.com

New Brunswick ranks near last in Canada in international student assessment results
In the spring of 2006, 2443 students from 67 schools in New Brunswick participated in the Programme for International Student Assessment (PISA) that tested more than 400,000 students from 57 countries around the world.


PISA was initiated by member countries of the Organization for Economic Co-Operation (OECD) to provide policy-oriented international indicators of the skills and knowledge of 15 year old students. It assesses youth outcomes in three domains: reading, mathematics and science – focusing on what students would do with what they have learned in school, at home and in the community.


In Canada, education is the responsibility of each province and territory. PISA testing and reporting was carried out by the Council of Ministers of Education Canada (CMEC), Human Resources and Skills Development Canada, Statistics Canada and provincial departments of education.


CMEC is an intergovernmental body founded in 1967 by ministers of education to serve as a forum to discuss policy issues and as a mechanism through which to undertake activities, projects and initiatives in areas of mutual interest. All 13 provinces and territories are members.


The PISA study tells us that all ten Canadian provinces performed at or above the OECD average but the Atlantic Provinces performed significantly below the Canadian average. New Brunswick's performance by 15-year-old students ranked 10th among Canadian provinces in science, 9th in reading and 7th in mathematics.


Students in minority language school systems had lower performance in science compared to those in majority language school systems. In New Brunswick, students in French language school systems performed significantly lower in reading than did students in the English language system. For mathematics, there were significant differences favouring the English language system.


In every province, students with higher socio-economic status, that is those whose parents had higher education and more resources at home tended to have higher performances in science.
In all three domains (reading, math, science), New Brunswick’s scores ranked behind most European countries and they ranked behind China, Japan and South Korea. The top performing country in each domain had considerably higher average scores than Canada and New Brunswick was at the back of the Canadian pack.


To be fair the other Atlantic Provinces didn’t do much better but that does not excuse New Brunswick and its educators. Clearly we have a problem.


The objective of PISA is to test the degree to which students nearing the end of their compulsory education have acquired the knowledge and skills essential for full participation in society. In June, Kelly Lamrock, New Brunswick’s Minister of Education, anticipating results of the PISA Report, introduced an education plan known as When kids come first.


The Plan has three goals:
(i) to ensure that every child who arrives at Kindergarten is ready to learn.
(ii) to ensure that by the time a child has completed Grade five, he or she will have the tools to learn i.e. reading, writing and arithmetic and,
(iii) that every child will graduate from high school having had the opportunity to discover their personal strengths and something they love doing. It’s an ambitious plan.


The existing contract between teachers and the government expires in February. Mr. Lamrock is publicly musing that any new money for education will be invested in kids not the “adults in the system”. That said he defends teachers on the grounds they “are doing their best”.


However, implied in some of his statements is the notion that teaching innovation and improvements in student outcomes will be rewarded. That makes a lot more sense than cross the board wage increases or salaries based on years of service.


The PISA study was the third since the year 2,000. Nothing has changed. To address the issue, Minister Lamrock promises to revise the teaching curriculum and to begin tracking school performance. He also promises to apply resources where they are most needed.


These promises sound good but one has to wonder whether they address the real problems in our education system or whether or not we have correctly identified the real problem(s).
Is it our teachers?
Is it our grading program?
Is it the curriculum?
Is it our method of teaching?
Is it a one class, pass all policy?
Is it language?
Does it have something to do with our culture or our socio-economic environment?
Is it the relationship between a parent’s education and the learning aptitude of their children?


As mentioned above, the first goal of the Kids come First program is to ensure that when kids arrive at Kindergarten, they are ready to learn. How will this be achieved? Will government set up early learning centres around the province?



Will government test kids in their homes to make certain they are learning before they go to Kindergarten?


Labour shortages are predicted for all four Atlantic Provinces in the next few years. The population is aging and shrinking at the same time. In Atlantic Canada, the birth rate is below the national average and the region is now just 7% of the total population of Canada according to Statistics Canada.

We can’t afford an education system that streams the best of our graduates out of the Province or fails to prepare the others for the 21st century workplace. Jobs today demand literacy, digital capacity and the use of technology. A poorly educated workforce is not an option. The ability to gather and interpret information is essential.

An education system that fails to produce reading and mathematic proficiency early in life is a system that penalizes those who use the system. Advances in computer technology over the last 20 years have touched nearly every segment of our society.

Things like the Internet and e-mail are taken for granted by large segments of the population. Anyone who fails to master these skills will be left by the roadside.


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 mailto:bill.bellstrategic@nb.aibn.com

According to recent news reports, well known chocolate companies including Hershey, Nestle, Mars and Cadbury Schweppes are facing investigation in Canada sparked by suspicions that they and others have teamed up in a price-fixing scheme in the multbillion dollar Canadian business of chocolate and confectionary products.


The Competition Bureau served warrants on bar-makers this week requiring them to turn over reams of documents on their pricing arrangements.

The Confectionary Manufacturers Association of Canada, reports that Canadians buy about $2.3 billion work of chocolate and candy products a year. There are allegations that chocolate bars are singularly priced at retail without distinction between brands. That could be the simple result of pressure from the market to be price competitive or it could be the result of the buying power exercised by national retailers and national distributors.

All four companies have said they are cooperating with investigators. Coincidently, on Wednesday, Hershey stock rose $1.11 a share or 2.8% to $40.21 on the New York Stock Exchange, its biggest increase in weeks. Cadbury gained 2.8 percent on the London Exchange and Nestle advanced 1.1 percent in Zurich.

Hershey, the Pennsylvania-based confectioner makes Skor and Hershey chocolate bars as well as its Canadian boxed chocolate brand, Pot of Gold which used to be made in Halifax but is now manufactured in Mexico.

Cadbury, the world’s biggest confectionary company, sells branded chocolate bar such as Dairy Milk and Fruit & Nut in Canada. Nestle, the world’s largest food maker, based in Vevey, Switzerland, manufactures Turtles, KitKat and Coffee Crisp chocolate bars. Everyone knows Mars Bar. They also make Snickers and Skittles. By the way, none of the price-fixing allegations have been proven.

When price-fixing investigations are conducted, the assumption is that companies under scrutiny have market power and/or the ability to control prices, so it’s generally the major players in an industry that would be under review.

It’s noteworthy that Ganong, Canada’s largest independent producer of chocolate and confectionary products is not included in the probe.

Price fixing is an agreement between business competitors to sell the same product or service at the same price. In general, it is an agreement intended to push the price of a product as high as possible, leading to increased profits for the sellers. Price-fixing can also involve an agreement to peg, discount or stabilize prices. In Canada, price-fixing is illegal but often hard to prove. The principle characteristic of price-fixing is any agreement on price, whether expressed or implied.

What’s most interesting to me is that the chocolate probe appears to focus exclusively on the manufacturers of chocolate products. In Canada, pricing of most chocolate related products is controlled, not by manufacturers but by major national and international retailers like Wal-Mart, Costco, Sears, Loblaws, Sobeys, Shoppers Drug and others.

The selling power of big store retailers is so great in Canada that they dictate price and control the distribution channels that manufacturers require to sell their products. Manufacturers pay fees to these retailers just to have their products listed. When manufacturers, particularly smaller domestic manufacturers insist on price increases for their products, they are often de-listed by national retailers.

Chocolate bars and bagged candy are sold in convenience stores; most of them are part of a regional or national chain like Needs, Seven Eleven or convenience store attachments to a gasoline retailer. Here again, manufacturers pay fees and control shelf space but they do not control retail prices and generally they don’t control their sell-in prices to the retailers.

During the last fifteen or twenty years, the Canadian retail landscape has been transformed by the growth and clustering of big box retailers into a range of ‘power retail’ developments. This has brought new players into Canada, like Wal-Mart, Home Depot and Costco. The big U.S. box stores and their centrally located buying power dominate all aspects of the retail offer in this country including: product distribution, promotion and price. They are followed in this practice by Canadian retailers like Sobeys and Loblaws (Atlantic Superstores and Save Easy).

The Canadian market is one-tenth the size of the U.S. market which presents scale issues for manufacturers in Canada when competing with prices from U.S. manufacturers, even with a strong Canadian dollar.

The cost of doing business in this country is higher, given our higher labour costs, transportation/logistic costs and various labeling requirements (nutritional, bilingual, metric, etc.). Production costs in the confectionery business are sensitive to even small increases in world sugar, cocoa and nut prices. The prices of these globally traded commodities are often volatile. When prices increase significantly, processors have no easy way of passing them along to consumers while retaining market-share.

Canadian firms that export products are less competitive when world commodity prices rise. They are less competitive when the value of Canada’s dollar rises. The market advantage that Canadian confectionery manufacturers used to enjoy, by virtue of a low dollar is gone.

The rise in value of the Canadian dollar has caused some retailers in Canada to demand that the federal government do something to alleviate the problem of cross-border shopping. The Retail Council of Canada represents 40,000 retail outlets in the country. They want Finance Minister Jim Flaherty to put pressure on manufacturers to lower their prices in Canada.

Ironically, the recommendation by the Retail Council has come just as the price-fixing allegations against chocolate and candy manufacturers have surfaced. It may be coincidence but probably not. The companies under investigation import much if not all of their products to Canada and enjoy the benefits of a higher value Canadian dollar.


If the big four, multi-national producers of chocolate products in Canada are proven to be price-fixers, I will be more than a little surprised. It’s our national retailers who set prices.


Our domestic manufacturers are caught in the middle.


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 mailto:bill.bellstrategic@nb.aibn.com