Sunday, May 22, 2011

 

REALITY CHECK

When Atlantic Canada's four provincial Premiers met in southeastern New Brunswick a few days ago they came-out resolved to ask the Federal Government for more transfer funds. Although Prime Minister Harper did promise in last month's Federal election campaign to maintain a steady level of transfers; I'm guessing given Ottawa's deficit budget measures that any "new" money is not soon to flow down towards the east coast.

Residents in two of the Atlantic Provinces will go to the polls in provincial elections this fall; Prince Edward Island on October 3; and Newfoundland & Labrador a week later on October 11. The get-tough posturing with Ottawa over transfer payments to the "have-not" may be good fodder for provincial politics but quite likely to fall on deft ears federally, in particular in those two jurisdictions which voted overwhelmingly against the Harper Conservatives in the May 2nd Federal encounter. And, from the perspective of the other three Atlantic provinces, though they may be envious of Newfoundland's recent offshore oil wealth, it probably doesn't help the "one-size fits all" argument favouring increased transfer funds from the Feds either.

Lest I digress: Flush from his majority win in Ottawa Mr. Harper has promised to pass his budget; scrap the long-gun registry with its 250 jobs based in Miramichi, New Brunswick; deliver on his omnibus "get-tough on crime" agenda; and kill subsidies for political parties - while at the same time chopping more than $4-Billion per year in annual spending. In addition to massive Federal job cuts, experts predict that means painful reforms to the Employment Insurance Program and (you guessed-it) Equalization payments to the provinces.

When Statistics Canada's April inflation numbers were published at week's end no one, least of all New Brunswickers, were surprised that theirs was the highest in the land: A reflection of the usual "sin tax" increases foisted on them by the Progressive-Conservative government of Premier David Alward in an effort to stave-off provincial bankruptcy. Sadly the same measures contained in the province's March provincial budget played a significant factor in a double-whammy which resulted in the loss of 2000 full-time jobs and kicked the provincial un-employment rate to more than 10 Percent.

The trend was in sharp contrast to the rest of Canada with a national unemployment rate of 7.6%; which added nearly 60,000 jobs in April. Commenting specifically on the New Brunswick situation a senior economist with the research think-tank Conference Board of Canada described Premier Alward's austerity measures as..."necessary to address the inevitable long term impact of crumbling finances."

Across North America less than 7% of the population has in savings more than the $500,000 which is estimated to get us through our "Golden-Years." In reality 63% either don't know how much they have; or admit to having less than $25,000 in savings. And; that same Conference Board of Canada predicts that specifically New Brunwick's aging population will scuttle any long term potential growth for at least the next generation. In North America, economic growth is set to ease overall as "Baby Boomers" retire. Pretty much since the end of the great sailing ship era of the 19th Century Atlantic Canada's problem has been to retain it's young workers. I was a product of that great migration west 45 years ago. It is a migration which has shown little sign of moderating over the past 5 (or more) generations.

In demographics alone, New Brunswick already has less than one young person entering its workforce for every person leaving it. And; that does NOT account for the 41.4% of provincial students surveyed a year ago who indicated that would be "likely" or "very likely" to leave their native province in order to find work. Despite noble efforts to turn around its provincial fortunes, New Brunswick's economic problems will only get worse. That's the reality of the Boom, Bust and Echo cycle of the post war euphoria of the mid-20th century which demographers have been warning about since the halcyon days of the "sixties".

For reasons theorists and economists may debate for decades; it's happening first in one of the country's smallest regions...but New Brunswick's slow agony into economic chaos should be a clarion call to every other region of the North American Continent that we are poised for, and headed down the same path. If magic somehow produces an effective remedy to the woes that ail my native province; it will be an experiment to watch, and a lesson to be learned.

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