Higgs calls for 'cultural shift' to turn N.B.'s economic fortunes around

Like a malfunctioning time machine, the COVID-19 crisis is threatening to transport New Brunswick's economy back to where it was in 2010 or earlier, and that has Premier Blaine Higgs calling for radical changes in the province's work ethic and entrepreneurial instincts coming out of the pandemic.

"We need a cultural shift here in New Brunswick. We need momentum that's going to be created from this COVID crises," Higgs said last week during a wide-ranging talk about New Brunswick's economic problems on the provincial business podcast "Turning Point."

"This may be a wake-up call for the country and for New Brunswick. I'm hoping we can springboard off of this."

On Monday, Statistics Canada reported New Brunswick's economy had another underwhelming year prior to the pandemic, growing by just 0.98 per cent in 2019. It's the 11th time in 13 years that growth in the province's economy has been one per cent or less, ranking lowest among Canada's ten provinces.  

Economic growth in New Brunswick has been so weak since the global financial crisis of 2008 it is not out of the question for all of the gains of the last decade or longer to be rolled back just this year.

Two weeks ago, New Brunswick's department of finance projected the province's economy will shrink by 4.3 per cent in 2020, with an average of private sector forecasts predicting a larger decline of 5.5 per cent.

Contractions of those amounts would send New Brunswick's economy back to the size it was somewhere between 2007 and 2010, erasing up to 12 years of accumulated growth.

By contrast in better performing neighbouring economies, a five per cent contraction would erase just three years of growth in Nova Scotia, two in Quebec and a little more than one year in P.E.I.

Think bigger 

With that as a backdrop, Higgs said New Brunswick needs to forget about deficit spending as a way to stimulate economic activity and apply the collective effort it used to contain the COVID-19 virus to remake the province's economy.   

He called on entrepreneurs to think bigger about what is possible and on citizens to place more value on work.

"i think we can do a whole lot here in New Brunswick and attitude plays a role — a cultural shift plays a role," said Higgs.

Claiming a number of New Brunswick firms could grow their businesses through export — but don't — and a number of citizens could work — but won't — the premier said it was important to understand what is holding the province back economically and fix it.

Stung by the reluctance of locals to fill jobs left vacant by a short-lived ban on temporary foreign workers, Higgs acknowledged low pay may be causing disincentives to employment in some cases but expressed his own belief that a lack of work ethic in the population is also causing problems.

"I think we have to understand why the jobs that are available here are not jobs we're proud of and want to be part of," said Higgs.   

Wage hike?

"Are the wages high enough?  But wages have to be tied with productivity. You do have to see if you're going to earn more money there has to be a working culture there to support that because they go hand in hand.

"How many of the processors said to me — the farmers, other industries — said to me, 'You know I need four, five six New Brunswick workers to replace one temporary foreign worker.' What does that say about us as a society?"

Higgs appeared to make an outdated reference to the operation of the federal government's employment insurance program, claiming without citing the evidence that too many New Brunswick residents are happy to work for 10 weeks and collect assistance the rest of the year.

"We have a system where people think being on the 10-42 program is a way of life," said Higgs. 

But according to rules posted by Employment and Social Development Canada that's not how the employment insurance system works.

Prior to the pandemic New Brunswick residents were required to work a minimum of 490 hours, at least 12 weeks, to qualify for 23 weeks of regular EI benefits in provincial regions with the highest unemployment rates.  

Earning 42 weeks of regular benefits required at least 1,610 hours of work in the previous year, or about 40 weeks of full time work.

Broaden ambitions

The premier also called out business owners who he said need to broaden their ambitions.  

He pointed, as he often does, to entrepreneur Amarjeet Singh Jatana of Canadian National Growers Inc. who three years ago began purchasing hundreds of acres of farmland in Kent County without government help to grow and export apples. Higgs said it is an example of how local businesses often overlook opportunity. 

"They were actually told you can't do that here in New Brunswick. They have orchards around the world and they looked at our climate and said that's a really good spot." said Higgs.

"Sometimes we under-sell ourselves. We can convince ourselves you can't do that in New Brunswick and that was a clear case. Even the farmers and the associations were like, 'Oh, they can't do that here in New Brunswick.'"

Higgs said he hopes the pandemic has shown the province it can come together and achieve important goals, a lesson he wants applied to the economy to end years of lacklustre growth.

"We don't go back to where we were," said Higgs.  "We go well beyond where we were."