Originally published in Huddle Today on Sept. 25, 2018
SAINT JOHN – “Atlantic Canadians like change, as long as nothing changes.”
That was just one of many blunt, straight-shooting observations made by Don Mills, the outgoing CEO of Halifax-based market research company Corporate Research Associates (CRA), at his recent talk in Saint John hosted by the Saint John Region Chamber of Commerce.
Mills was in the city last Thursday for a lunchtime talk; the room full of business people and other officials such as Stephen Lund, CEO of Opportunities New Brunswick, and Saint John Mayor Don Darling. But that didn’t make him hold back any of his insightful but hard-hitting analysis.
His talk focused on the state of the economy in Atlantic Canada, zeroing in on New Brunswick and Saint John in particular. If anyone went there looking for a light-hearted, cheery pat on the back, they left disappointed.
“I think that every part of this region needs to be successful. Not just Halifax, not just Saint John, but every part of this region,” Mills told the full room at Saint John’s Trade and Convention Centre. “But we have special challenges here and if we don’t recognize them and we don’t address them, we can never succeed.”
Mills did offer some solutions, not wanting to be one of the naysayers he abhors.
I don’t know about you, but I’m completely fed up with people who complain and don’t have any answers. If you’re going to complain, at least give me another alternative. I have no time for people like that,” said Mills.
“I’m done with people complaining and whining. Either do something about it, offer a new solution, or shut up.”
Here are five key issues Mills says the region is facing, along with his some of his solutions to address them.
1) We have a rural problem
Nearly half of the people in the province live in rural areas and depend largely on seasonal employment. He says rural residents are not contributing fully to the province’s tax base, but expect the same level of access to public services.
“We have been promised that you have the right to live anywhere you want in Atlantic Canada and can expect the same level of public services and the same economic opportunity, or we will subsidize you in that choice,” said Mills. “Well, we tried that for 50 years and we’re almost broke. We have to make hard choices and we have to give people better service, but deliver it in a different way.”
Mills doesn’t suggest that everyone in rural areas move to the cities. What he does propose is changing the way we view cities and their markets. Instead of just looking at things through strict municipal borders, consider the wider community outside the city.
He used Fredericton and southern New Brunswick as an example.
“I like to think that these communities should stop thinking about the City of Fredericton as the marketplace, but as an economic region in how they do economic development strategy as a result of 147,000 people they have in their market, rather than the 65,000 [just inside the city],” said Mills.
He said this would make more sense when it comes to planning both business development and the delivery of public services.
“If I’m a business, I might think about the 147,000, I don’t want to think about the 65,000,” Mills said. “We need to think about economic development on market basis, not county basis because the natural way markets work is that if it’s in a reasonable driving distance, that’s the draw for your markets.”
This means people in rural communities could easily access work and other services, given they drive a reasonable distance.
“If we start doing this for all the urban areas, if the three cities do a really good job and there’s lots of crossover in servicing everybody living [in these areas], that means you can live in rural communities very nicely and take advantage of the nearby urban workplace and amenities,” he says. “That’s the model we need to think about for the whole province.”
Mills admits though that it’s going to take a politician with a lot of guts to tackle the province’s rural problem.
“We have a rural problem and we don’t want to acknowledge it. In the way our politics works, because of the divisions between urban and rural, you can’t address the issue,” said Mills. “Because you can’t get elected because of the distribution between urban and rural ridings. It’s impossible to fix it unless somebody actually has the courage to do something about it.”
2) Too many of us work for the government
Mills says that one in five people work for the public sector in Canada. In New Brunswick, the number is one in four. This is something that needs to be rebalanced, he says.
“What does that mean for the average person? It likely means your taxes are higher than they are elsewhere because somebody has to pay for it, right? It also means we play a man short on the private sector side in terms of growing the economy,” says Mills.
“If you believe the economy is built on the private sector, that’s where the prosperity is developed, we’re playing a man short. It’s one less employer to hire people to grow the economy.”
3) We’re running out of people and we need more…like now.
People have been talking about this for years, but Mills says it’s at a critical point where it needs to be addressed, and in a big way.
Right now, there are more deaths than births in New Brunswick. That isn’t changing as the population gets another year older every year. According to the last census, 11 of 15 counties shrunk in the province.
“In New Brunswick, it’s particularly bad because your population shrunk in the last census by half a per cent,” said Mills. “You know what that means? It means you have fewer taxpayers to pay an ever-increasing bill. It means you have the highest individual tax rate now in the country.”
If this problem doesn’t get fixed, Mills says taxes will only get higher, especially with increasing healthcare costs. He says healthcare eats up 47 per cent of New Brunswick’s budget, and it will jump to 65 per cent in the next 15 years. If the province’s population doesn’t grow, he predicts that health care costs will get so high that the young people that are left may move away.
“I’m looking at the few young people in the room today, the burden will be on you to pay for all of us old farts in the health care system. It’s going to be enormous. You’re going to really think twice about staying here,” said Mills. “I can guarantee the tax rates without population growth are going to go through the roof and there won’t be money for everything else.”
He says the answer to this is immigration, estimating that Atlantic Canada needs about 150,000 newcomers over the next 10 years. If the region is going to reach that lofty goal, a lot of us need to change our attitudes. He argues the region has very little experience with diversity compared to other areas in Canada like Toronto and Montreal.
Forty-eight per cent of New Brunswickers believe we are more or equally diverse compared to other parts of the country,” said Mills. “Apparently, they never left home.”
This is where the private sector needs to step in, he says.
“We need more companies advocating for diversity and immigration in the workplace. We need more people to say it’s ok to welcome people from different countries and to make them part of our communities,” said Mills. “I like to say we’re very friendly in Atlantic Canada, but not very welcoming.”
“We’ve got a lot of work to do and we need many voices on this. Government alone cannot do this. We need the private sector to really step up on this issue.”
4) We need to build more of an entrepreneurial environment.
This is something Mills believes is key to improving the fortunes of the province and the region.
“We have [Opportunities New Brunswick CEO] Stephen Lund who is bringing in jobs to the province, and that’s great,” Mills told the room.
“But we need to create those jobs inside the province as well. That means entrepreneurs prepared to take risks. We’re not as entrepreneurial as you might think.”
The region’s decades-long reliance on government is a huge obstacle, he says.
“We’re risk-averse, change-averse. There are lots of reasons for that, and part of it is that we’ve depended on government for our livelihoods for the length of anybody’s life in this room,” said Mills. “So the way we think about things is different from anywhere else in Canada as a result.”
This attitude needs to change, says Mills, because it’s the private sector that creates private sector jobs, not the government.
All these claims by governments all over the place saying, ‘yeah, we’re creating jobs.’ I’m tired of that job creation bullshit,” said Mills. “Because you know what? The only jobs that the government can create are public sector jobs. They can’t create one job in the private sector.
“What they can create are the conditions for private sector jobs. That promise is such a false promise and we fall for it every election.”
5) Our economy needs to be more diversified and export-oriented.
Mills says more companies need to think outside their provincial and regional borders.
“We don’t sell enough stuff to other people outside the region. It’s as simple as that. We need to become a lot more focused on other markets,” he said.
“This market is small and not growing. If you increase your business in this region, you take it from somebody else, so it’s a zero-sum game.”
Mills used his own company, CRA, as an example. They are based in Atlantic Canada and do work for clients in the region, but a good chunk of their business is elsewhere.
“We’re a market leader in market research, and there’s not a lot of markets left for us here,” he said. “My little company today, 35 per cent of our revenue come from outside the region. Our goal is to take it to 50 per cent because it’s the only way that we can grow our company.”
Yeah, the data is bleak, but somebody has to talk about it.
Mills will be leaving his position as CEO of CRA at the end of this year but will become the company’s chairman of the board and senior counsel. He’s been doing polling work for more than 40 years now.
After all this time, he remains optimistic about Atlantic Canada’s future but emphasizes that there’s a lot of changes that need to be made. But he admits these changes probably won’t happen until there’s government with the courage to make them.
“We’re going to have the same future if we don’t change some fundamental things. Will that happen? Probably not, I guess. Because of the way politics work in this region, nobody wants to make a hard decision on things,” Mills told Huddle after his talk.
They’re more worried about re-election. I think that’s the challenge we unfortunately face in this region. [It will] take a crisis for something to really change fundamentally.”
That hasn’t discouraged Mills from continuing to talk about statistics and what they mean. He says there’s a need to talk about these issues openly, and since he’s so late in his career and is unencumbered by politics, he’s one of the people able to do so.
“I guess I earned it from being in the business a long time. I think a lot of people are compromised and not able to speak out because a lot of private sector people are dependent on government contracts for some of their revenue, which means they really can’t speak out on issues where they should,” he said.
“I do a lot of work with governments. I think I’ve gotten to the point where people in decision making [roles] in the government are not taking personal offense about what I speak about. Maybe subconsciously, they’re glad somebody is saying some of these things because they can’t.”
He said he will continue to talk openly about these issues not only for the current generation in power, but for the ones that follow.
“The numbers speak for themselves. We’re falling further and further behind the rest of the country every year. I have five grandchildren that I’m speaking for. My kids are fine, they’re going to be fine,” he said. “But my grandchildren, I’m not sure they’re going to live here, they might not be able to afford it just from a taxation point of view if we don’t start fixing these issues.”
“That’s why I’m speaking out and I probably will for the foreseeable future.”