by Rod Allen
Times & Transcript Staff
As appeared on page A1
The business community supports Premier Shawn Graham’s ambition to see New Brunswick wages hiked 15 to 20 per cent to compete with Ontario and Alberta for workers, but also wonders how he intends to pull it off.
“Where are they going to find the money?,” asked Charles Cirtwill, president of the Atlantic Institute for Market Studies in an interview yesterday.
“Will New Brunswick businesses suddenly become 20 per cent more productive, or will taxes drop, or will business get more aggressive in finding new markets?”
Cirtwill believes the third option is the most practical and possible, “if that can be done, but certainly some details need to be put forward (by government) now.
“If they’re saying we need to increase wages to make it easier for people to stay in New Brunswick well, that’s bang-on, but the question remains, ‘How are you going to do it?’ Where will business find the extra money to afford wage increases?”
Premier Graham brought forward the wage hike plan on Tuesday through former McKenna deputy minister Francis McGuire, currently president of Moncton-based Major Drilling, and Gilles LePage, former president of the Caisses Populaires Association of N.B.
Graham introduced the two men to the public yesterday in their new capacity as the co-chairmen of the premier’s Task Force on Self Sufficiency.
The premier wants the province to be self sufficient within 20 years, an effort that would be helped a lot by several huge energy projects being contemplated for the province. However, proponents are worried about finding enough workers, with so many moving to Alberta and Ontario for higher wages.
Self sufficiency is a laudable goal, says Bill Denyar, regional director of the Atlantic Provinces Chamber of Commerce in Moncton, but as to achieving it “there is no silver bullet.
“I think the premier recognizes that (and) it would be unreasonable for the task force to have suggestions for us on the same day they announce it.”
However, businesses would obviously be able to pay staff more if they pay less to government, “so tax reduction would be one of the key issues.”
An even bigger one would be productivity, says the provincial branch of Canadian Manufacturers & Exporters (formerly the Canadian Manufacturers Association), although government has a role to play there as well, in the view of director David Plante of Riverview.
Plante thinks the task force might be looking at the issue from the wrong end; don’t try to increase wages, increase productivity first, then higher wages will follow higher profits.
In the larger scheme, New Brunswick’s actual workers are as productive as they are anywhere in the country, says Plante. Productivity – the relative amount of product from, say, an hour’s work – can indeed be a labour issue but it’s also tied to new automation and more efficient use of the facilities we already have, both of which are, in turn, tied to new investment.
“The taxation regime is a key element of the investment climate and we are competing for a limited amount of investment capital with businesses all around the world,” said Plante. “When boards of directors are making decisions about where to put their next plant, taxes come very much into play in making those decisions.
“Quite frankly, our members say that when they are considering expansion, the United States is a viable alternative.”
In fact, when it comes to competition for workers, New Brunswick should be thinking about the south as much as they are of the east, says Plante.
“Remember that Alberta pays some of the highest wages in the country, but they’re struggling to find enough workers too. The labour market is a very competitive market and a lot of other factors go into compensation.”
There is plenty of evidence to back that up. According to the recently released 2007 edition of Canadian Demographics – the Financial Post’s 80th annual guide to almost all market areas in the country – New Brunswickers fare well financially relative to their fellow Atlantic Canadians.
The report says Fredericton residents enjoy the highest average household income of any city in the province, predicted to hit $67,800 by mid-2007, while households in both Moncton and Saint John average $62,800.
Those numbers are better than any other Atlantic Canadian city except Halifax ($70,300) but lag well behind the Canadian average of $72,000 and far behind average household incomes in Ontario and Alberta cities.
For example, in Toronto the figure is $91,700 and in Calgary it’s $101,900. Even in cities closer to Metro Moncton’s 135,000 population the numbers are much bigger in those provinces; for example Spruce Grove near Edmonton (population, 121,000, household income $90,600) or Cambridge, Ont. (pop. $125,000, income $76,700).
However, the number one factor in the cost of living is housing, and the Canadian Real Estate Association tells a compelling tale.
Housing prices at the end of 2006 averaged $140,000 among New Brunswick’s three major cities, compared to the Canadian average of $280,000, the Toronto average of $355,000 and the Calgary average of $360,000.
In northern Alberta’s tarsands capital of Fort MacMurray, the biggest magnet for Maritimers in the province, a modular home costs $300,000 and a regular house $500,000.