New Brunswick: From miracle to ‘meh’

The province was once the economic bright spot in Atlantic Canada. No one’s cheering now.

From miracle to ‘meh’

Photograph By Blair Gable

Uncertainty hangs over Canadian Forces Base Gagetown in southern New Brunswick. Cuts are coming. “It’s kind of scary,” says Rick Jenkins, 45, a shop steward for the Union of National Defence Employees at the base. “We’re not being told when we’re going to know,” he says. “It’s just unknown.”

For a province hailed for its “miracle” economy 15 years ago, this has become the order of the day. Canada’s major banks are predicting the province is in for some of the weakest economic growth in the country. The Bank of Canada anticipates New Brunswick’s GDP will grow just 1.5 per cent this year, the lowest of any province. Alberta, by contrast, is expected to grow 3.4 per cent. In 2011, the provincial economy incurred a net loss of more than 4,100 jobs. Last month the unemployment rate rose to 10.2 per cent, while in Canada as a whole it inched down to 7.2 per cent.

It wasn’t supposed to be like this. Under former Premier Frank McKenna’s reign, from 1987 to 1997, the province balanced its books and enjoyed a boom in call centre and technology jobs. The “McKenna Miracle,” as it was called, set New Brunswick apart from its Maritime brethren. In the years since, though, the province came to rely overwhelmingly on the public sector for its growth. Now the federal and provincial governments have slammed on the brakes in an effort to tackle deficits. Transfer payments from Ottawa to New Brunswick have flatlined after a decade of annual increases of more than five per cent, while the defence department recently announced at least 120 civilian jobs will be lost in the province. Other federal departments are expected to dramatically downsize in New Brunswick, while the province itself plans to shed 1,500 positions over the next three years.

There is one bright spot. The province recently granted Calgary’s Windsor Energy a licence to explore shale gas deposits in the south, which the government calls the “most significant economic opportunity” in a generation. But the scheme is already running into loud opposition from residents. Besides, any significant government revenue derived from shale gas is years away.

Despite all this, Donald Hammond, who heads Enterprise Chaleur, a business group in Bathurst, remains hopeful his region can weather the economic storm. But he’s realistic too. If there’s no work to be had at home, there’s always Fort McMurray, he says. New Brunswickers are travelling there in growing numbers to work for much of the year. “They are doing what we call ‘the milk run.’ We say in French la vol de lait. They go out there for three weeks, they come back, they spend money. They consume a lot.”

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