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Higgs calls for 'cultural shift' to turn N.B.'s economic fortunes around –



Like a malfunctioning time machine, the COVID-19 crisis is threatening to transport New Brunswick’s economy back to where it was in 2010 or earlier, and that has Premier Blaine Higgs calling for radical changes in the province’s work ethic and entrepreneurial instincts coming out of the pandemic.

“We need a cultural shift here in New Brunswick. We need momentum that’s going to be created from this COVID crises,” Higgs said last week during a wide-ranging talk about New Brunswick’s economic problems on the provincial business podcast “Turning Point.”

“This may be a wake-up call for the country and for New Brunswick. I’m hoping we can springboard off of this.”

The explosion at Irving Oil’s refinery in October 2018 cut output and dragged on New Brunswick’s economy throughout 2019. It helped keep growth in provincial GDP below one per cent for the year for the 11th time in the last 13 years. (Submitted by Doug McLean)

On Monday, Statistics Canada reported New Brunswick’s economy had another underwhelming year prior to the pandemic, growing by just 0.98 per cent in 2019. It’s the 11th time in 13 years that growth in the province’s economy has been one per cent or less, ranking lowest among Canada’s ten provinces.  

Economic growth in New Brunswick has been so weak since the global financial crisis of 2008 it is not out of the question for all of the gains of the last decade or longer to be rolled back just this year.

Two weeks ago, New Brunswick’s department of finance projected the province’s economy will shrink by 4.3 per cent in 2020, with an average of private sector forecasts predicting a larger decline of 5.5 per cent.

Contractions of those amounts would send New Brunswick’s economy back to the size it was somewhere between 2007 and 2010, erasing up to 12 years of accumulated growth.

By contrast in better performing neighbouring economies, a five per cent contraction would erase just three years of growth in Nova Scotia, two in Quebec and a little more than one year in P.E.I.

Think bigger 

Higgs often cites international entrepreneur Amarjeet Singh Jatana and his company Canadian National Growers as a model for New Brunswick economic development. The company saw the province as an ideal place to grow and export apples and has established multiple orchards in Kent County without government help to make that happen. (Twitter)

With that as a backdrop, Higgs said New Brunswick needs to forget about deficit spending as a way to stimulate economic activity and apply the collective effort it used to contain the COVID-19 virus to remake the province’s economy.   

He called on entrepreneurs to think bigger about what is possible and on citizens to place more value on work.

“i think we can do a whole lot here in New Brunswick and attitude plays a role — a cultural shift plays a role,” said Higgs.

Claiming a number of New Brunswick firms could grow their businesses through export — but don’t — and a number of citizens could work — but won’t — the premier said it was important to understand what is holding the province back economically and fix it.

Stung by the reluctance of locals to fill jobs left vacant by a short-lived ban on temporary foreign workers, Higgs acknowledged low pay may be causing disincentives to employment in some cases but expressed his own belief that a lack of work ethic in the population is also causing problems.

“I think we have to understand why the jobs that are available here are not jobs we’re proud of and want to be part of,” said Higgs.   

Wage hike?

“Are the wages high enough?  But wages have to be tied with productivity. You do have to see if you’re going to earn more money there has to be a working culture there to support that because they go hand in hand.

“How many of the processors said to me — the farmers, other industries — said to me, ‘You know I need four, five six New Brunswick workers to replace one temporary foreign worker.’ What does that say about us as a society?”

Higgs appeared to make an outdated reference to the operation of the federal government’s employment insurance program, claiming without citing the evidence that too many New Brunswick residents are happy to work for 10 weeks and collect assistance the rest of the year.

“We have a system where people think being on the 10-42 program is a way of life,” said Higgs. 

But according to rules posted by Employment and Social Development Canada that’s not how the employment insurance system works.

Prior to the pandemic New Brunswick residents were required to work a minimum of 490 hours, at least 12 weeks, to qualify for 23 weeks of regular EI benefits in provincial regions with the highest unemployment rates.  

Earning 42 weeks of regular benefits required at least 1,610 hours of work in the previous year, or about 40 weeks of full time work.

Broaden ambitions

In 2018, the company S&P Data was offered $2.2 million by the New Brunswick government to open two business services call centres. In 2019 it closed and laid off all 245 employees. Premier Higgs believes government grants are not the way to create jobs. (Opportunities NB)

The premier also called out business owners who he said need to broaden their ambitions.  

He pointed, as he often does, to entrepreneur Amarjeet Singh Jatana of Canadian National Growers Inc. who three years ago began purchasing hundreds of acres of farmland in Kent County without government help to grow and export apples. Higgs said it is an example of how local businesses often overlook opportunity. 

“They were actually told you can’t do that here in New Brunswick. They have orchards around the world and they looked at our climate and said that’s a really good spot.” said Higgs.

“Sometimes we under-sell ourselves. We can convince ourselves you can’t do that in New Brunswick and that was a clear case. Even the farmers and the associations were like, ‘Oh, they can’t do that here in New Brunswick.'”

Higgs said he hopes the pandemic has shown the province it can come together and achieve important goals, a lesson he wants applied to the economy to end years of lacklustre growth.

“We don’t go back to where we were,” said Higgs.  “We go well beyond where we were.”

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Bleak economic picture expected in B.C.’s first fiscal update since start of COVID-19 pandemic –



British Columbia’s finance minister is expected to paint a bleak picture of the pronvice’s economy on Tuesday, more than four months after the global coronavirus pandemic started.

Carole James will provide her first fiscal update since February’s budget and is expected to show forecasted deficits for at least the next three years.

The province has earmarked $5 billion for immediate coronavirus financial relief, including $1.5 billion put aside for economic recovery.

The province has also seen a sharp decline in revenues associated with a significant drop-off in tourism and consumer spending.

B.C. adds jobs but lags behind other provinces in COVID-19 recovery

B.C. adds jobs but lags behind other provinces in COVID-19 recovery

“We all know the profound impact COVID-19 has had around the globe, across our country and in fact right here in British Columbia,” James said.

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“Tomorrow I will be giving a summary of that impact on our province, the impact on the people of our province.”

Read more:
B.C. employment affected by COVID-19 more than any other province: poll

Economists are mixed on what the overall impact will be on British Columbia’s economy. The Business Council of British Columbia is forecasting the provincial economy will shrink by 7.8 per cent. Deloitte expects B.C.’s economy to shrink by around five per cent this year.

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The financial outlook would be worse if a second wave of the virus comes in the fall. A second wave could potentially lead to more economic instability globally.

“I wish I had a crystal ball that could show us where we are going,” James said. “There are so many pieces, so many risks ahead, that continue to show the uncertainty. Whether it’s a second wave, or a shift in other jurisdictions that impact our exports and the work we do here.”

Read more:
Canadians facing CERB gap receive explanation via government email

The B.C. government has introduced legislation legally allowing it to run deficits. Previously, British Columbia was not allowed to run budget deficits.

In February, James introduced a budget with a $227-million surplus, but the COVID-19 crisis has rattled the foundations of the province’s fiscal outlook.

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The federal government is expecting the national deficit to soar to $343 billion this year. Finance Minister Bill Morneau warned last week the national economy may never go back to normal and there is no indication of a roadmap for when or how the government plans to rein in spending.

The fiscal snapshot from Ottawa shows a very real likelihood that the Canadian economy and consumer habits may not soon — if ever — return to what they were pre-COVID-19.

B.C. Liberal leader Andrew Wilkinson says even amidst the uncertainty the provincial government should outline an economic recovery plan.

“The federal government has spent almost $7,000 per person in Canada and the provincial NDP can’t figure out how to even spend $300 a person,” Wilkinson said.

“There are a lot of small businesses who are about to fail this fall. We’ve got families who are desperately trying to figure out what to do when school goes back because they don’t know which days are school days and that is going to hurt working women really hard because they won’t have a predictable opportunity to work.”

© 2020 Global News, a division of Corus Entertainment Inc.

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UK economy risks shrinking 14% this year, budget forecasters warn –



LONDON (Reuters) – Britain’s economy could shrink by more than 14% this year and government borrowing risks approaching 400 billion pounds ($500 billion) if there is lasting damage from the coronavirus, government budget forecasters warned on Tuesday.

The Office for Budget Responsibility said its central scenario, with only moderate scarring, showed a 12.4% fall in output, with a 14.3% decline if scarring is deeper.

Under an ‘upside scenario’ – which it said was an update of the sole scenario it presented in April – output would fall by 10.6%, while government borrowing would be limited to 263 billion pounds.

(Reporting by David Milliken, editing by Andy Bruce)

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Return of North American economy will negate need for tariffs, PM tells Trump – CP24 Toronto's Breaking News



WASHINGTON – Prime Minister Justin Trudeau urged Donald Trump to think twice Monday before imposing new tariffs on Canadian aluminum, saying the sector is emerging from the pandemic-induced production stance that prompted the White House to consider such measures in the first place.

Trudeau, who said in a news conference he had spoken to the U.S. president earlier in the day, told him that with the North American economy getting back up to speed, Canada’s aluminum smelters would soon be back producing value-added specialty products for the American auto sector.

The spectre of new tariffs emerged last month after Canadian producers, unable to shut down production and with their usual customers hamstrung by the impact of COVID-19, were forced to make a more generic form of aluminum and ship it to warehouses in the United States.

That alarmed certain U.S. smelter owners and operators, who have been urging the U.S. trade representative’s office to slap fresh levies on imports from Canada.

The pandemic “caused certain disruption in the aluminum sector that is starting to realign itself, given the economies are starting up again and manufacturing is getting going,” Trudeau said after his call with Trump.

“I impressed upon him that it would be a shame to see tariffs come in between our two countries at a time where we’re celebrating NAFTA and at a time where we want our businesses and our manufacturers to get going as quickly as possible.”

Canada has been on the outside looking in when it comes to the coming into force of NAFTA’s successor, the U.S.-Mexico-Canada Agreement, which took shape in 2017 and 2018 before a backdrop of steadily worsening relations between Trump and Trudeau.

While Trump welcomed Mexico’s President Andres Manuel Lopez Obrador to a celebratory event at the White House last week, Trudeau kept his distance, citing the tariff dispute and the ongoing COVID-19 pandemic among his reasons. A readout from Monday’s call said the prime minister “expressed regret” for being unable to attend.

The U.S. trade representative reportedly gave Canada a deadline of July 1 to impose export restrictions – the very day the USMCA took effect. That deadline has come and gone without a hint from either the White House or U.S. trade ambassador Robert Lighthizer about what happens next.

Trudeau said he and Trump also discussed the Canada-U.S. border, where non-essential travel has been curtailed since March in an effort to limit the spread of the novel coronavirus. The 30-day bilateral agreement to limit discretionary cross-border travel without restricting trade or essential workers has been extended three times and is now set to expire July 21.

Since the last extension, however, the public health crisis in the U.S. has exploded.

More than 100,000 new COVID-19 cases were identified over the weekend, particularly in southern states that reopened early, with Florida emerging as the new epicentre. Canada has had 108,000 confirmed cases in total, compared with more than 3.3 million cases and 135,000 deaths in the U.S. to date.

Hospitals in major urban centres across the United States are again nearing capacity and health care workers face another critical shortage of personal protective equipment like masks and respirators.

Recent polls suggest Canadians remain unequivocally opposed to reopening the border any time soon – a predictable symptom of the accelerating crisis in the U.S., said Kathryn Friedman, a University at Buffalo law professor and Wilson Center global fellow.

But there could be other lingering foreign-policy irritants at play, she added.

“I wonder if the United States had treated our dear neighbour, friend and ally a little bit better over the last three-and-a-half or so years, if the reaction would be as harsh,” Friedman said. “Maybe people are just like, ‘Well, too bad, I don’t care if you want to open the border.”’

Friedman is among several Canada-U.S. experts, border community leaders, northern state lawmakers and others who want to see a plan for when the time comes to lift the restrictions.

“I think we have to have this conversation,” she said. “I think we have to engage the right people now, so that when the border restrictions are eased, whenever that’s going to be, they are done so responsibly.”

It’s less a question of when and more a question of how, Friedman said – what sort of controls, testing and screening measures and other tools will need to be in place even after the emergency has passed.

“I’m more concerned that the climate will change, and some relevant government officials won’t have given any thought to how this border opening is going to take place,” she said.

“We have to get our act together and really think more clearly about how we’re going to handle these kinds of situations in the future, and really use science-based data – an evidence-based, science-based approach – to health screenings when it comes to border restrictions and border policies.”

Trudeau demurred Monday when asked whether this time, Canada and the U.S. might negotiate a closure that lasts longer than the standard 30-day window.

“We will be discussing with our American partners what the next steps should be, and I think this is a situation that is evolving rapidly and we need to keep responding to the situation on the ground.”

This report by The Canadian Press was first published July 13, 2020.

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