In Brief: In this front page story in the Telegraph-Journal, AIMS acting President Charles Cirtwill says the latest employment figures should have provincial governments asking themselves whether the tax structures designed for the manufacturing sector, have been amended to reflect the realties of a service based economy.
New Brunswick’s employment growth was among the weakest in Atlantic Canada during the first half of the decade, suffering from declines in the agricultural, forestry, fishing, utilities and manufacturing sectors, Statistics Canada reported Tuesday.
The marked employment drops in the goods sectors came as the services industries staged across-the-board increases, signaling for analysts an ongoing transition in the provincial economy.
New Brunswick saw a modest increase of roughly 20,000 workers, or six per cent, between 2001 and 2006, lagging the national average of nine per cent employment growth, Statistics Canada said in its labour market study gleaned from Census data.
The Nova Scotia workforce, meanwhile, grew by about 30,300 people, or 7.5 per cent, while Newfoundland and Labrador saw a 7.3 per cent employment boost, gaining 13,700 workers. Prince Edward Island increased its labour pool by just 3,000 people, a 4.6 per cent gain.
In New Brunswick, the manufacturing sector sustained the deepest decline in employment, shedding 3,200 jobs, or eight per cent of the entire pool. The agriculture, forestry, fishing and hunting “sector” was next in line, losing 740 workers, or five per cent, while the utilities sector lost 300 jobs, an eight per cent drop.
“This region is now a high-cost environment because our wages are up, the dollar is at parity, and you’re going to see a shift from the manufacturing sector into the service sector,” said Charles Cirtwill, acting president of the think tank Atlantic Institute of Market Studies.
“The question that provincial governments have to ask themselves now is that since their tax structures were designed for a manufacturing economy, have they made the changes necessary to reflect the realties of a service based economy.”
Cirtwill said, for example, the federal Atlantic investment tax credit refunds taxes paid by the manufacturing industry, but leaves out the developing services sector.
“The tax structures are set up to penalize the areas where we are growing and reward the areas that are declining, and that doesn’t make a lot of sense,” he said.
According to Census data, the construction industry saw some of the greatest employment growth in New Brunswick between 2001 and 2006, gaining roughly 3,500 workers to build a nearly 21,000-strong workforce.
The healthcare and social assistance sector remains the top employer in the province, drawing 2,840 more workers to a pool of roughly 41,500.
Retail trade follows closely behind with 41,300 employees after picking up 2,900 more, or 7.6 per cent.
Other highlights from the services sector include a 7.5 per cent gain in public administration, a 10 per cent increase in wholesale trade, an 18 per cent boost to real estate and a 23 per cent rise in administration and support for waste management and remedial services.
David Chaundy, senior economist with the Atlantic Provinces Economic Council, said this ongoing transition from a goods-based economy to a services-based one reflects a national trend.
He said the declining sectors are largely focused on exports, which have been delivered major blows by the strong loonie and growing international competition.
“Where we are vulnerable is in food manufacturing and forestry, and that is where we need to redefine out competitive advantage,” said Chaundy.
“We have to ask ourselves, ‘What’s our future? Can we continue to compete on lower costs or do we have to move to more value added products? Do we have to invest in more skills and technology in order to be able to compete?'”