by Nathan White, Telegraph-Journal
Observers are encouraged by the self-sufficiency task force’s message of change, but they aren’t sounding a ringing endorsement for its final report.
The task force has released The Road to Self-Sufficiency: A Common Cause after four months of consultations. Leaders of business and economic organizations were poring over the report’s 91 recommendations on Monday, 80 of which the task force suggests should be addressed by May 2008.
“The message of change is critically important (and) very positive,” said Dave Plante, vice-president of the New Brunswick division of Canadian Manufacturers and Exporters.
A handful of recommendations would have government undertake a comprehensive review of policies and programs, streamline the regulatory process and improve the efficiency of Service New Brunswick. Plante said that would be welcome news for the private sector, which is often bogged down by red tape.
“The focus of the task force on improving the regulatory regime is very positive,” he said. “We still face an overly bureaucratic regulatory process.”
Andreea Bourgeois, New Brunswick director for the Canadian Federation of Independent Business, agreed.
“We’re pleased to see a major focus on reducing compliance costs and increasing efficiencies within Service New Brunswick,” she said. “It’s something we’ve been lobbying for for a long time and it’s great to see here. Now it’s a matter of seeing it implemented.”
Bourgeois, whose organization represents about 4,500 small- and medium-sized businesses in the province, said businesses in New Brunswick pay about $650 million int total each year to comply with regulations. She cited red-tape reduction as one of two major areas (along with an improved immigration strategy) that lead her to view the report positively.
“We’re talking about 10 per cent of the New Brunswick budget,” she said. “If that could be streamlined and reduced, it could be a great gain for the economy.”
But Plante perceived a conflict in the report, which recommends reducing red tape, but would also consider increasing public sector wages across the board and decentralizing government services by setting up more offices outside Fredericton.
“Raising civil service wages and creating new agencies will not necessarily deal with that issue,” said Plante. “A mantra for manufacturers and industry as a whole is, in order to compete in this new global economy, we have to become more productive. That should be a central tenet of the public service as well.”
Charles Cirtwill, acting president of the Atlantic Institute for Market Studies, an economic and social policy think tank, said that strategy would do nothing to move New Brunswick closer to self-sufficiency. A similar approach in Saskatchewan “failed miserably,” said Cirtwill, who added that the federal Department of Fisheries and Oceans experienced problems when it decentralized.
“If you move the finance department to Campbellton, how much influence are they going to have on the premier if they see him twice a year?” said Cirtwill. He also questioned whether across-the-board pay increases are necessary.
“And the even more fundamental flaw to this is the assumption that somehow government jobs are the key,” he added. “You do not build a sustainable economy on government jobs. They’re not creating any value added and they’re not creating a new product to sell to people in India or Alberta. There is no growth and no expansion potential there.”
Cirtwill said government should instead focus on improving efficiency within the public service, and create a better environment for the private sector to invest in developing the economy.
“There’s a difference between creating an economic environment in which success can happen and trying to kick-start an economy. The policies here are creating a kick-start without creating an environment in which the kick-start can grow the economy at a sustainable level,” he said.
Cirtwill, Plante and Bourgeois all sounded alarms over business attraction and development recommendations that suggest the government may get involved in picking business winners and losers.
Plante noted that the report recommends offering incentive packages to attract firms, shortly after the government raised corporate taxes for the first time since 1994.
“The message that came out initially and is still there is that corporate taxes can be increased to pay for other more focused incentives for investment,” said Plante. “We would not concur with that statement.”
“That usually means large firms, which is something that worries the small business guy,” added Bourgeois. “You’re going to give tax incentives to come here and make competition with the mom-and-pop shop down the street that didn’t have any help.”
“It’s not fair and there’s a whole debate about how you give tax credits out and we know in the past sometimes they’ve not been given in a clean way,” she said.
Bourgeois said 97 per cent of New Brunswick businesses employ fewer than 50 people, and that small businesses account for about 45 per cent of provincial gross domestic product.
Cirtwill pointed out that the taskforce’s recommendations are just that: recommendations. As the reviews roll in, Premier Shawn Graham now has a chance to act on the report as he sees fit.
“The Graham government needs to stand up and say, ‘Great, now we need to decide which are appropriate for New Brunswick and which aren’t because that’s what we were elected to do,’ ” Cirtwill said. “I don’t think they should be bullied into endorsing it wholly or rejecting it entirely.”