Let's Choose Growth - It's Time
Commentary from The Atlantica Centre for Energy
Let's Choose Growth - It's Time
For over 15 years The Atlantica Centre for Energy has assessed the potential of the energy sector in the Maritimes, and specifically here in New Brunswick. Over this period there have been some projects with great potential and some long shots, but all had one thing in common: they had an intrinsic reason for being located in New Brunswick. We call that a natural competitive advantage for New Brunswick, some reason for locating here that other regions don’t share or can’t replicate.
An example of a geographical competitive advantage includes being located near the ocean. In our early history we built and launched ships. We built ports. We harvested fish, developed an aquaculture industry and expanded seafood processing. And we are now researching the energy potential of the ocean too.
New Brunswick also has great agricultural lands for growing crops. Not unlike Saskatchewan and its wheat, we have perfected growing potatoes and have a vibrant forestry sector.
Below the surface we have resources too. Saskatchewan has turned its economy around by supporting potash, uranium, oil and gas. Saskatchewan embraced agriculture and resource development and in so doing became a “have” province with a strong economy and a growing population.
Of late New Brunswick has had difficulty developing the oil and gas sector to the detriment of our economy. Based on the University of New Brunswick’s economic reports available on Boostnb.com, New Brunswick has earned a “not progressing” grade on economic growth, value of exports, debt reduction and private sector investment. All are key metrics in assessing the health of the New Brunswick economy.
The Atlantica Centre for Energy has reviewed many opportunities for growth here in our home province. Since the energy sector has the largest economic multiplier (return on every dollar invested) we typically lean toward energy investment. We have been disappointed in the lack of energy investment, and the inability to move forward on energy projects which have that “natural competitive advantage” by being close to the ocean, or resident on/under our lands.
Throughout our history the fortunes of New Brunswickers have been (and will continue to be) dependant on our ability to develop our resources and export them to external markets. We were founded on those concepts and our future is tied to them. By restricting our ability to leverage our resources, we are dramatically hindering our ability to stand on our own and chart our own destiny. We have become chained to transfer payments received from other provinces who have harnessed their resources and now provide handouts to us.
As our provincial debt balloons, each year we sound like a Dicken’s character asking for “more, Sir.” We advocate to reduce our reliance on hand-outs and develop our own resources similar to other successful provinces.
Our challenges like funding health care, increasing literacy, establishing an effective educational system, and retaining our youth through job creation are all linked to broadening our revenue base and increasing royalties to the provincial government. All “have” provinces created diversified economies that include development of their resources. And yes, this includes harnessing our abundant shale gas reserves.
Our answer is not to cut services, but to expand royalties to fund effective government services. We do not believe these challenges can be addressed through tax increases on our population base. Natural gas development alone could boost the New Brunswick economy $900 million annually – enough to fund a reduction in taxes and provincial debt, while still delivering services to residents.
Newfoundland and Labrador and Nova Scotia have received billions in offshore royalties, supporting their economies for years. This is critical revenue that New Brunswick has been shut out of while our economy declines year after year.
We are fortunate here in New Brunswick to have resources to develop that domestic and export markets value. We are long past the date we should have been developing them. And like Saskatchewan, this is not an “either / or” situation. We can develop various sectors of the economy simultaneously. In fact, successful economies do just that – they have diversified investments that all play a part in supporting a prosperous region.
At the Atlantica Centre for Energy we advocate becoming a “have” province. It’s time.
The Atlantica Centre for Energy 27 Wellington Row, Saint John, NB E2L 3H4