6 Ideas for Reforming Business New Brunswick

Regular readers will know that I've questioned the Alward government for focussing on the deficit at the expense of a real jobs agenda. Yes, the fiscal balance needs to change, but if we are going to withdraw public money from the economy during a global slowdown, we had better have some solid plans on economic development.

The government department that quarterbacks this strategy needs to be part of that plan.  So far, the promise of more private sector expertise at InvestNB has not really changed how the department operates. Judging by the flow of press releases in the Minister's name, it's the same game plan with an advisory board in place. 

At a recent leadership candidates' forum I was asked about BNB reform. Here are some ideas I offered...

(1)    Re-think staff structure.  Good businesses guide employees through incentives, not micromanagement. Business New Brunswick should reflect this -- each unit should have measurable goals and targets, with staff paid based on results, with incentive pay for bringing companies and jobs into the province.

(2)    Build government's skill-set.  Too often, economic development teams hire those with experience in government agencies, affirming the culture of subsidies and saving existing businesses. Priority should be placed on bringing in private sector talent skilled in sales and global contacts, and we should use headhunting agencies where appropriate.

(3)    Go after the markets with emerging middle classes.  The fact we have no emerging market strategy to go after the 500 million new middle class consumers in China, India and Russia...let alone one for the African nations like Ghana and Rwanda who had double-digit economic growth rates, shows how locked BNB has been in subsidizing what we have.  For emerging markets, there needs to be a clear strategy to establish business contacts with countries that have growing economies, like China and India, with staff to support them. For instance, the lack of a China strategy, and staff with language skills and connections to that market, needs to be remedied.

(4)    End preferential treatment of industries.  We have rigid rules about what sectors we will, and won’t support, which sounds like government picking winners and losers to me.  Let's use community plans and strengths to develop cluster strategies that offer effective job creation tools with clear measurement of results and greater focus on mentorship and angel investor help to foster new enterprises and jobs rather than bailouts.

(5)    Create an Entrepreneurship Desk to deal with the soft barriers to new business.  Too often, new businesspeople from the Maritime Provinces lack the mentorship and help they need in finding needed angel investors, or capital, or just advice. We need to encourage private sector leaders to design networks across the province, country, and world that erase the competitive disadvantages faced by rural communities in New Brunswick.

(6)     Ensure every department understands its job creation mission.  InvestNB's private sector expertise should be used to have a jobs audit of every department, maximizing their role in the economy. For example, the National Governors' Association in the U.S. has a Rural Arts-based Economic Development manual, but our Culture department doesn't have a desk for those issues. The Education Department hasn’t gotten strategic advice from BNB in leveraging their foreign schools to open markets. Reinventing government for a jobs-based mission should be a government-wide initiative led by BNB. 

These are just a few steps that can be taken to reform Business New Brunswick, and make it an effective agency to foster entrepreneurship, open new markets, and especially create jobs.

THE FIRST DEFICIT-FIGHTING TOOL WE NEED IS..... HONESTY

We've seen this show too many times before - a candidate says whatever a pollster tells them to say on the campaign trail, often making unrealistic promises, and then they disregard these promises once faced with the hard realities of governing.

You can find examples of lots of politicians skimming the truth, but David Alward's Progressive Conservatives take the prize, with their repeated campaign pledges in 2010 to not raise taxes... only to have raised taxes in their first budget and now talk about raising taxes again in their second budget.

As this Bob Jones piece on the CBC shows clearly, the Tories' rhetoric was always to deny they would have to raise taxes. "We have a spending problem, not a revenue problem" was part of their written talking points, and they ran as the party of low taxes. When you hear the Premier now say when he said "we will hold the line on taxes that affect ordinary New Brunswickers" that he really, really meant only sales taxes, he makes the error worse because it is doubling down on a lie. He would be better to cop to the fact that he ran not knowing much about the job of Premier, and people were so mad at the incumbent that he chose not to think to hard about it.

The real problem is that politics-as-usual avoids the serious discussion we need in this province about our budget and about our economy. I've often said that I believed that in a global recession, New Brunswick was right to spend to keep people working and money flowing in communities. The capital budget and the enhanced social spending for working families (who tend to spend money in their communities) kept businesses afloat and families solvent. That's why every Western democracy -including the Harper government- did similar things. It's also why, as even Premier Alward acknowledged after he disposed of the Liberals at the polls, "New Brunswick weathered the recession fairly well". In many cases, like in the U.S. and Britain, governments who cut too quickly after saw the recovery swoon again and jobless numbers rise.

But I've also said that I think it was an error to keep the deep tax cuts (which are inefficient stimulus) for the wealthy, because it left a structure in place that would hurt our ability to repay that necessary stimulus.  It never weakened my resolve to be a Liberal - the Tory line then was to cut spending and keep the tax cuts, which was worse - but I do think we should roll back those tax cuts for folks like me who can share in the sacrifice.

But David Alward got to rail against deficits, promise more social spending, and say he would hold the line on taxes. He should be grateful he got away with it; mere decency would suggest he should acknowledge it now and thank people for the chance to put it right by governing with more intellectual integrity than he showed in the campaign.

The real weakness of Alward's approach -- that in the campaign he seemed to suggest government had failed if it made any decision that angered anyone; that with enough consultation no one need ever disagree -- is that it leads to bad government.  Alward's Tories want to please everyone, which ultimately means that those with the least voice - the poor and vulnerable - suffer, as seen with the Alward government's rolling back of our government's anti-poverty program.  It's a program David Alward proclaimed his support for on the campaign trail, but it harms those who don't have much power, so a weak leader who fears controversy will drift into picking on the weak, like school kids and the poor.

We need a frank and adult conversation about our province's finances, and we need to be honest. I have already put out my position that we need to look at new sources of revenue. I have proposed - in the spirit of bi-partisanship - to roll back the Graham tax cuts for those earning over $100,000 per year and use that money to invest in education (K-12 and post-secondary) which is vital if we are to have a growing economy, as a skilled workforce is essential in a 21st century global economy.

David Alward was never willing to have this discussion. But I say we challenge him, and ourselves, to rise above the tired politics as usual.  Let's attack the deficit without this doublespeak, and phony consultations where the Minister passively let's everyone vent and then says he's decided, say, that schools needed cutting because he's sure he heard that somewhere.

A short-term deficit was a tough, but necessary, decision to weather the recession together.  Now, let's come together as citizens to share in the sacrifice of paying for that necessity.  We can start by engaging in a public consultation process similar to that undertaken during the development of the poverty reduction strategy. We bring government, private business, and citizens together; we open the books and we work through solutions. When engaged as responsible adults New Brunswickers take to the task at hand and come up with solutions that are recognized and praised nationally.

We need to do this again for our finances. Let's get a citizen's assembly of 100 citizens together with business and NGO leaders.  Make sure teachers, and parents, and entrepreneurs, and those living in poverty are in the room.  Open the books.  Let citizens see what cabinet sees.  Make the deliberations live on the web and invite feedback and questions.  Develop a people's budget plan based on real, honest debate.

 And when asked how we will rein in a $700million deficit without more revenues or cutting expenses, let's be honest enough to say it will actually take both.  You can't find $700million by cutting the poor -- if they had it, they wouldn't be poor. You won't find it in schools that were the lowest-funded in Canada under the Lord government and only started to catch up under Shawn Graham.  But we will trust the voters with real information and engage, because citizens could hardly show less courage or do worse than the politicians are doing right now.

We need a serious discussion about New Brunswick's economic future. Mr. Alward did not run as a serious candidate, and he is losing time to act as a serious premier.  As Liberals, let's trust that the people grasp the seriousness of the moment -- and reward honest leadership.

Newfoundland, Ontario, and Lessons for NB Liberals

I cannot say I am an expert on the politics of Newfoundland and Labrador, but one story struck me, one that shows that province's Liberals in third place, badly trailing the second place NDP and first place Progressive Conservatives. This holds a warning that New Brunswick's Liberals must heed, we cannot be complacent.

www.globeandmail.com

In the last provincial election, our party lacked a clear narrative, being all over the place ideologically and on policy. We lost badly, but at least retained official opposition. Next time we may not be so lucky, especially with an NDP aggressively looking to replace our party as the centre-left alternative.

This brings me to my second example, Ontario. Earlier this summer, many commentators were ready to write political obituraries for Dalton McGuinty, a premier no one has accused of having charisma or likeability. However, McGuinty, who initially badly trailed that province's Progressive Conservatives and had to fend off a strong challenge from the NDP, made an election that seemed a foregone conclusion against him highly competitive. He ultimately won on election day and while still one seat short of a majority – pending recounts – it is still an impressive result given earlier predictions of impending electoral doom.

It is also an impressive results given the electoral collapse of the federal Liberals only a few months earlier.

What is behind this amazing political comeback? McGuinty's Liberals had a strong narrative for their election. The Ontario Liberals offered a clear progressive agenda on the environment and education - outflanking the NDP while also providing a clear contrast to the Progressive Conservatives. At the same time, they tied this into an economic development agenda - green jobs, investment in education for a skilled workforce - understanding that the best social program is a good well-paying job.

Also, McGuinty’s campaign platform was not just words, he had been implementing these progressive policies – on the education and environment – in government.  McGuinty shows that a familiar face, even one with perceived baggage, can win if he projects competence, consistent values...and of course, the right ideas.

McGuinty's Liberals offer an example the New Brunswick Liberals must follow if we are to survive as a viable political force, or else the party of Robichaud and McKenna may be consigned to the dust bin of history.