Title: Let’s Get Economic Growth Back on the Agenda of Government

August Commentary

Sales cures all ails. A business coach gave me that advice early on in my entrepreneurial career and I’ve never forgotten it.

If you want to solve a problem, it sure is easier to do it from a position of strength. From a position of growth. Prosperity. Innovation. Forward momentum. Not from a place of hardship or adversity or lack.

Translate that to the New Brunswick economy and what does it mean? It means we’re in for some serious hardship if we don’t soon get some wind in our sails around actual sales and private-sector business growth.

First some context:

This is an important moment for our province. New Brunswick is in a strong position financially. Less debt on the books and a little money in the bank. But it’s a fragile situation. It didn’t come from the strength of our economy. It’s not a result of businesses contributing more tax dollars and selling to more customers and bringing in more export dollars.

In his 2024-25 budget speech this spring Finance Minister Ernie Steeves said a key driver in the Province’s economic success of recent years has been its ability to grow the population. So how does that buoy our economy? It means we’ve received increased handouts from the Feds: financial support in the form of tax transfer programs, which are based, in part, on population size. As New Brunswick’s population grows, the province qualifies for increased federal tax transfers. So when Covid hit and the world discovered how incredible (and affordable) this place is, our population grew by levels we haven’t experienced in decades. A more robust and diverse population is important and necessary. Let’s keep it going.

Even so, we can’t bank our future prosperity on more people coming here (especially given our current housing crisis). While an uptick in population may be an outward sign of economic viability or vitality, it is not an accurate indicator of real GDP growth. [Quick definition: Gross Domestic Product (GDP) growth is a measurement in the actual output of the economy. If our province’s GDP is rising it means the economy is producing more goods and services – i.e. selling our wares and bringing real money into the economy.] GDP growth means our economy is producing real value and expanding by producing more goods and services. It provides a clear picture of economic progress by focusing on actual outputs, rather than changes in population or the prices of things.

And by those measures, New Brunswick is lagging behind in a way that should have us all a little on edge.
The New Brunswick Business Council recently commissioned economist and researcher David Campbell (Jupia Consultants) to conduct a study on the economic situation in the province. His findings, summarized here, highlight the very real challenges we’re facing as a province.

The public sector is growing faster than the private sector and New Brunswickers are increasingly reliant on government-provided income. This puts more pressure on the province to raise tax rates, cut services, or rely more on federal transfer payments, which we’ve seen in recent years.
Also, our trade deficit has significantly increased. From the 1980s to the early 2000s New Brunswick’s imports and exports represented roughly the same amount of value. By 2022 our trade deficit grew to more than $8 billion, meaning we purchased billions more in goods and services than we sold to outside customers, a scenario that is unsustainable in the long term.

Add to that Campbell’s finding that New Brunswick ranks last among the ten provinces for financial support governments provide to industry and we’ve got a concerning scenario for long-term prosperity. A solution is private sector growth; making our province an attractive place for businesses to set up shop and grow.

Private sector growth creates jobs, puts organic tax revenue back into the system, and creates a positive environment for future business investment and population growth. As Campbell put it, “It is a virtuous cycle of business investment leading sustainable public investment in services and infrastructure, creating attractive communities, leading to more people moving in and subsequently more business investment.”
I’ve been in my role as CEO of the Saint John Region Chamber for five months now. I’m open to well-intended and informed perspectives, listening, and synthesizing. Right now this is what I’m hearing from our leaders in enterprise.

The measures that will help our businesses grow – and by extension help the province solve the larger social and quality-of-life challenges we’re facing – include:

Tax relief and incentives to help businesses increase productivity, viability and enhance competitiveness.
Supports to better align our labour supply with business needs. And putting us on a level playing field with the rest of Canada (in terms of eliminating the provincial sales tax on new builds) so developers can help solve our housing crisis. We are advocates to put economic growth back on the political agenda.
Let’s start acting PRO-business growth in this province. Let’s champion big business instead of vilifying them. Let’s help our small businesses become more productive and competitive so they can grow. And let’s get behind our startup entrepreneurs so they can become viable and secure our reputation as a future-focused place to do business.

That’s the conversation we’ll be having with our party leaders and the business community when we meet next month.
On September 9, the Saint John Region Chamber of Commerce will facilitate a public discussion with Premier Blaine Higgs. On September 11, we’ll be having a similar public engagement with Liberal Leader Susan Holt. And we are working to line up a date with Green Party Leader David Coon.

We’re eager to understand the party leaders’ visions for the future prosperity of our province and the Saint John Region. And to see how the business community and our partners in economic development, education and innovation can work together with policy makers to turn the tide on our stagnant economy.
We won’t get there overnight and that’s ok. It took years for us to get here and it will take time to rebuild and arrive at a position of predictable strength and long-term sustainability. However, this is the moment to chart the course for a bright and prosperous future. It’s important and it’s necessary. Our charm and good looks as a people and province will only get us so far. Unless we show meaningful progress in terms of creating opportunities – and that starts with a business-friendly ecosystem – we’ll lose our population gains and any modicum of financial security.

The potential exists for New Brunswick to become a world-class destination for progressive enterprises solving big problems in new ways. “The best place to start and grow a business in Canada” is our vision at the Saint John Region Chamber.

To that end, let’s start talking about economic growth again. Let’s make it a collective priority – supported by the appropriate policy and regulatory frameworks – and start taking steps together toward a future vision we share.

Tracy Bell is the CEO of the Saint John Region Chamber of Commerce

Her commentary appears monthly in the Telegraph Journal