Summer Newsletter

NEWSLETTER

SUMMER 2020

OVERALL OBJECTIVE – TO COLLOBARATE OUR EFFORTS WITH OTHHER AGENCIES, INSTITUTIONS, AND GOVERNMENTS TO IMPROVE THE PROIVINCE’S FISCAL SUSTAINABILITY AND THE QUALITY OF LIFE FOR ALL NEW BRUNSWICKERS

WHO WE ARE – We are a New Brunswick based think tank made up of community and business leaders who believe there is a need for a non-partisan organization that can provide informed advice and leadership that will enable the actions necessary for New Brunswick to succeed both social and economically.

INTRODUCTION – It has been quite a roller-coaster ride since March when Covid-19 fell upon the world. As previously noted, New Brunswick fared well – among the best in the world. Many give accolades to the Premier and all members of the legislature for managing virus and making early decisions by declaring a state of emergency. Others would argue that New Brunswick is so far removed from the mainstream, that even the virus couldn’t find us. Regardless, we are on the tail end of the “hurricane” and hopefully will escape a resurgence this fall. Researchers in laboratories around the world are doing extensive research, and many feel a vaccine will be found by the end of the year.

ELECTION – A snap election was called by the Higgs government in the hopes of getting a majority government. It is too early to predict what will happen. We could end up back where we started with a minority government. As we all know, New Brunswick has systemic problems and regardless of who forms the next government, they must be addressed. We may require an all-party committee similar to what we had in fighting Covid-19 to address the problems. As in the last election, the Coalition intends to publish a voter’s manifesto in order to focus the electorate on the perennial issues rather than campaign flashpoints.

FINANCING – While the Higgs government showed a surplus in operating income during the first part of this year, the pandemic has blown this out of the water. Latest numbers show that the cost is in excess of $300M and could go as high as $500M. These costs are alarming as is, but New Brunswickers must remember the warnings we gave before this crisis about the looming decrease in Federal monies flowing into New Brunswick. We rely heavily on the Federal Government for transfers and equalization payments.

In brief, the payments for the year 20/21 will include equalization payments of $2,210,279,000, Canada Health Transfer of $860,159,000, and Canada Social transfers of $308,633,000. Total Unconditional Grants from Canada (transfers) will be $3,380,000,000 (34% of GDP) while our total Revenue is only $9,839,358,000.

Historically Alberta contributed to transfer payments. In 21/20 they may qualify to receive transfer payments, decreasing the money flowing to New Brunswick and other provinces. Furthermore, when the CERB (Canada Emergency Response Benefit) cheques stop flowing to New Brunswickers, our economy could suffer a significant blow.

TRANSPORTATION AND INFRASTRUCTURE – Our President had an interesting and informative dinner with John Logan, Deputy Minister of the Department of Transportation and Infrastructure. Infrastructure was with Supply and Services but is now combined. Therefore, DTI also manages capital projects on new and existing buildings for hospitals, schools et al.

Logan is a no nonsense guy with a wealth of experience on jobs all over the world. He understands the importance of planning and implementation. He has an excellent working relationship, support and alignment with Minister Bill Oliver and the DTI Executive Team. His mandate is to sort out, as best he can, the systemic problems in the department. A summary of what was discussed is as follows:

He is the first recent Deputy Minister with an engineering degree and business and project experience.
A Project Management Office has been put in place to increase accountability.
The design Department has been reorganized from the top down.
A stage Gating process has been implemented for capital transportation projects. A formal funding request with justification and a plan is required to enter each stage and approved by senior management.
He is looking at introducing more design build projects versus the design/bid/build tendering process.
A new well proven Asset Management system has been purchased and is in the process of being implemented. This will be used as the basis to justify and set the priorities on the road, bridge and culvert repairs so that a transparent multiyear plan can be put in place.
Mandate is to reduce cost as much as possible without compromising the safety of the public.
Budget this year is $500M ($300M for roads and $200M for infrastructure). Down from a high of $900M in previous years.
There are also many other improvements being made in Operations and Infrastructure.

These are all very positive things that should lead to greater efficiencies. He does have internal struggles. As an example, there are engineers who would like to design bridges for 75- 100 years, while others are more practical and will design timber bridges, at a much lower cost, that may last for 50 years.

The good news is that much of our highways have been built. There are a couple of areas, which would be considered discretionary, that could occur when funds are available. The same holds true for schools and hospitals.

One final item is the number of roads in New Brunswick. On a per capita basis we must be one of the highest. Therefore, a decommissioning of roads should be evaluated.

MUNICIPAL REFORM – We, as well as many others, continue to beat the drum. We finished our update of the Finn report and presented to the Premier, Minister Jeff Carr and others. The Minister acknowledged receiving the report with a suggestion we co-ordinate a meeting with senior staff. A meeting is scheduled for the middle of September. This is a big step in reforming New Brunswick, akin to the Equal Opportunity plan that Premier Louis Robichaud put together. Our updated report can be accessed on our webpage, www.coalitionnb.com.

An editorial which appeared in the Daily Gleaner on August 20 entitled “Next Premier must fix municipal system” was well written and expressed similar views of CCC and other writers. The undertone of the article is that the Provincial Government must rebate more money to the municipalities and LSDs. To put this into perspective, the Province collects approximately $500M in property taxes. It does rebate a fraction of this amount to the Municipalities and LSDs. However, this revenue enables the province to meet its obligations for schools, hospitals and infrastructure. Therefore, not all of it can be rebated. It must be phased in over a period of time. The province can no longer be the be-all-end all for all the problems in New Brunswick. We must return local authority. When entities are created, they will have so much money to operate. It’s like people in New Brunswick who have to make a choice each month of paying rent or power with little left for food and other necessities. Communities and municipalities have to become more engaged and creative in finding ways to meet their financial requirements. If they want to keep their emergency rooms open all night that is their decision. But there will be trade- offs. i.e. No money to do economic development or build rinks or do road repairs.

The government must help by easing regulations. Of those who apply for a moose license, very few ever receive one. The salmon are returning to our rivers but no changes to fishing regulations have followed. Try opening up a hot dog stand in rural New Brunswick. How about environment and their regulations? At one point in time, the regulations were so stringent that they nearly shut down the development business. This begs the question, is New Brunswick open for business?

NORTHERN VISION – A group in Northeastern New Brunswick put together a plan called “Northern Vision”. The transitional adjustment committee was established in November 2019 in response to the announced shutdown of the Glencore smelter operation in Belledune, N. B.

For the purposes of this plan, they defined northeastern New Brunswick as the region stretching from St. Quentin to Miramichi, including the Acadian Peninsula, encompassing all of Chaleur and Restigouche. This region is the province’s most economically challenged, with its highest rates of unemployment and other economic markers.

They have developed a plan with the following recommendations:

The region will be designated a development zone, similar to economic opportunity zones established in the United States and Quebec, that will help spur investment, both domestic and international in the region. (They propose to provide relief on business taxes for a limited number of years as one incentive)
As part of the economic development zone designation, they are proposing the provincial government should refocus the Regional Development Corporation to its original mandate-assisting economically challenged regions. Also, ACOA would be asked to get involved to provide additional resources.
That collective efforts be focused on establishing capacity for First Nations and their organizations to allow them to fully prepare for the environmental impact, equity, training and employment opportunities that this plan will require to allow them to be full partners.
That the region’s digital infrastructure be upgraded to ensure it is on equal footing with its national counterparts.
They see opportunities in the modular construction industry particularly in (1) nuclear industry as it moves to the construction of small, modular reactors; (2) The mining industry, and (3) The green energy and green development industry, with its enormous requirements for modular prefabrication.
That the provincial and federal governments, in partnership with private and public partners, develop an intermodal hub linking all transportation assets (sea, rail, road, and air) in a coordinated way.

The weakness of the report is they do not deal with municipal reform. We believe that such reforms are where any sort of economic development strategy should start.

The northern region of the province continues to struggle. In the past, there were several mills operating up north. Today there are very few, if any. This has a ripple effect on the economy. NB Power, for example, relied on the mills all over New Brunswick to sell energy. One of the reasons the paper mills closed because there was less demand for paper. Less and less people are subscribing to newspapers as they read online. The circle then is broken.

The population base up North is approximately 130,000 (17% of total population of New Brunswick) and they are only able to generate 10% of the property taxes collected. Notwithstanding, this is home for many people, and they do not want to relocate. Life can continue in the north, but not in the same way. We need to find creative new industries to bring life back to our northern shores.

GREATER SAINT JOHN – David Campbell of Jupia Consultants and Paulette Hicks of the Advisory Council, prepared a report entitled “Collaborating to ensure the municipalities in Greater Saint John will prosper in the 2020’s. The report was prepared for (1) City of Saint John, (2) Town of Quispamsis, (3) Town of Rothesay; (4) Town of grand Bay-Westfield, (5) Town of Hampton, and (6) Village of St. Martins. The proposal is to merge several existing economic development agencies and departments into a new regional entity. The new organization will be funded to compete with larger centers, and it will have the strategic alignment required to rapidly scale-up ideas and initiatives The City of St. John has been struggling for some time. Rapid population decline over the last ten years or so has eroded their tax base. Expenses like fireman and police salaries are out of hand. People in the periphery area ask why join the city in this venture? We are doing just fine managing our own affairs. They do not take into consideration that the city provides so much more. Many live in the outskirts but drive to work, they shop in shopping malls, they go the plays and the bars and restaurants, and participate in all kinds of other essential and discretionary activities.

This is a very good report given the circumstances they had to work under. Bringing all these groups together is no easy task. But when you’re eating an elephant, it’s one piece at a time. The report falls short of what is required. The role and contribution of the non-incorporated areas (LSD) remains to be decided. The agency will face the same obstacle that Regional Service Commissions have experienced since their creation. The Province needs to play a role in dealing with LSD’s (Local Service Districts) Land use will continue unabated with sprawl and linear developments all over the territory. There are other variables that come in to play such as policing, fireman, property assessments to name a few. Notwithstanding, there are people sitting at the table from their respective districts, which could lead to a comprehensive discussion on achieving common goals and objectives. As always, we can hope that a successful single purpose regional body can inspire confidence in stronger general purpose bodies.

HEALTH AND LONG TERM CARE – If there is a positive effect of the pandemic it is in health care. We wrote about it in our previous newsletter. A number of improvements have continued since then. Notwithstanding, we still have thousands of people without a family doctor and several other issues that need to be addressed. Members of the health committee of CCC were able to meet with the Deputy Minister of Health, Gerald Richard, who was recently appointed. The meeting went well. One surprise is that we learned that the Province of New Brunswick does not have a comprehensive Health Plan. We suggested that maybe we could work together with the department in preparing such a plan.

Our document titled “A CCC Health Services Planning Guide and Framework for New Brunswick” was sent to the Premier, Minister Fleming and Deputy Minister. A formal letter from Minister Fleming was recently received thanking us for the report and saying that since the pandemic began, he has seen innovation in our health care system.

That being said, one area which we hope to see prioritized in the future is Preventive Medicine. It would seem to us that there needs to be more focus on trying to stay healthy rather than becoming less sick. Doctors are trained to deal with disease, but it would be better to educate the public to take measures to remain healthy. Remember the federal program called “Participation”. This program ran for many years and delivered a strong message of the value of exercise and eating healthy. The NBHC (New Brunswick Health Council) should be given more resources to deliver the message to New Brunswickers encouraging them to take better care and stay out of the hospital. NGHC.ca They have all kinds of statistics that will show trends in various sectors of New Brunswick. We need to promote wellness such as “an apple a day will keep the doctor away”. New Brunswickers rank very high in obesity which could lead to all kinds of medical problems.

The cost of delivering health care continues to rise. Health and Senior care are nearly 40% of our budget and if statistics are correct this will go even higher due to demographics and aging population. There are 1900 doctors in the Province which should be enough given our size of population. $666.6M was spent on Medicare last year. The average doctors’ income is slightly below $350,000. However, there are many semi-retired doctors and a number of other doctors who work part-time. These costs are in line with other provinces, but can New Brunswick continue to pay this kind of money? Other options should be explored. Technology can free up a great deal of overhead for doctors. However, there is push-back by the doctors. Of the 1900 doctors, only 30-40% have computers. Many are still sending messages by fax.

OTHER CONCERNS AND COMMENTS –

Education. There is so much going on in education that we cannot possibly write about it all. We are concerned whether the Covid-19 classrooms will work. We are concerned whether we are preparing the K-12 kids for the future. We question whether French immersion is working for everyone. We look at the costs of operating five (5) universities in the Provinceincluding Crandall and ask are we getting a return on our investment. Still over 50% of population is functionally illiterate. Much more discussion needs to occur with the recently formed Strategic Education committee.
Cybersecurity- The recent construction of the cybersecurity building is 90% completed. The problem is they have no tenants. The building is 132,000 sq. ft. EMO was slated to relocate there, but Higgs’ government hasn’t approved. Cybersecurity is a very important economic engine for New Brunswick. We have one of the finest facilities in the land. Could we position New Brunswick as the Cybersecurity Capital of Canada? Much to be done and has to be a priority.

Immigration- What progress are we making in terms of numbers? David Campbell had an excellent commentary in the August 29^th edition of the Daily Gleaner. Reference, www.jupia.ca A quote from the article is “Instead of having too many young people and not enough jobs, we have too many older people retiring and not enough young people to replace them and provide the workforce to support new industries.” The job opportunities in Atlantic Canada will reach 200,000 over the next ten years. Immigration must continue, but the challenge is to match immigrants to the jobs that are available.

NB POWER – Continues to operate with a deficit. Utility board has not allowed a rate increase for several years. The retrofitting of the Mactaquac Dam has started with soft costs of design and engineering. Total costs estimated at $2.7B dollars. An affiliate of Hydro Quebec has been awarded the contract. What impact of NB Power’s debt load will have on the Provincial Credit Rating?

Food Security – As the pandemic shook global supply chains, our meager food production levels were drawn into the spotlight. As it turns out, New Brunswick produces only 8% of our own food requirements.

Vision– We have talked about this in the past, we have yet to see a vision for the province that will lead to sustainability for our children and grandchildren. Covid-19 has turned the world up-side down, and we may never be the same. Our observation is that we still working in silos. As an example, what is the point of doing economic development if people can’t find a doctor and our education system is below standard.

In creating a plan, we must do it in sequence. Our suggestion is to start with a summary of everything we have going for us. What would draw people to the province? For instance, did you know that the Bay of Fundy is one of the seventh nature wonders of the world? Take a trip around the Fundy trail and see the natural beauty. If you go to St. Martins, the trail will now take you all the way to Alma. There are so many more that we will highlight at a later date. As the old hymn says, “Count your blessings. Name them one by one.”

The other question – does change come from the top down or from the bottom up. We are suspect that any party in power will be able to make the necessary changes required. Then changes must come from the bottom up. Or could we have a hybrid of something in between? Ralph Klein said, “show me the parade and I will lead”. We, the constituents can affect change. We must exercise our power and do it soon. Rest assured we are heading towards the wall.

REMEMBER: WHERE THERE IS NO VISION, THE PEOPLE PERISH!

We would like to hear from you.

You can reach us at:

Email: dbranscombe@coalitionnb.com

Telephone number: 506-451-1357; 506-461-0053 (cell)

Address: P. O. Box 804, Station A, Fredericton, NB E3B 5B4