New Brunswick Finance Minister Ernie Steeves will deliver his government’s 2022-2023 operating budget next week in circumstances that require a combination of careful, long-term thought and immediate, short-term action. The minister has a challenging balancing act ahead of him – COVID-19 restrictions have been lifted but many businesses and sectors are still feeling the effects and the road to recovery will be longer than some imagine. Inflation, record-breaking fuel prices, rising interest rates, the housing crisis, lack of access to primary health care and the continued pandemic-related health effects as well as other financial pressures are affecting businesses and individuals alike and are a significant threat to halt our short- and long-term economic recovery. The war in Ukraine and other dynamic global events that are creating uncertainty abroad and domestically. Adding a further wrinkle to the situation is the province’s massive surplus – reported at nearly half a billion dollars in the third quarter fiscal update.
Of course, not all surpluses are created equal, and a significant portion of the increased revenue are driven by unsustainable, one-time federal transfers, but the province’s current fiscal position does provide flexibility and options to propel growth and diversify our economy – which would help to bridge this current period of uncertainty as well as help insulate provincial finances from future downturns. Our organization has often called for fiscal restraint and reducing the provincial debt – and while that remains important, we must look at the big picture and not be overzealous fiscal hawks.
Growing cost pressures for businesses and households, which have significantly escalated over the past month, have become the primary concern that requires immediate action. Recently, a group of seven local chambers of commerce along with the Atlantic chamber wrote to Premier Higgs to express the seriousness of the situation and made clear the need for government to act to mitigate some of the inflationary effects being felt by everyone.
There are parallels here to the pandemic itself. When the health crisis hit, the government took decisive action to protect our healthcare system from a surge that it could not handle. We need that same attitude now about the economy – we are heading towards crisis territory on the current trajectory and the government must attempt to blunt the effects of the current inflationary environment by creating surge-protection-type, short-term crisis relief to businesses and households to bridge this temporary roadblock on the road to recovery.
Being a competitive business environment isn’t just about costs (although important) – it also requires government to make the right investments at the right time that will aid growth in such areas as workforce development, infrastructure, reducing red tape and maintaining livable communities. One area of growing concern for all levels of government that is having an impact on growth and livability in New Brunswick and elsewhere is housing, which is impacting immigration, workforce development, population growth, the livability of communities, health and more. We have attended several pre-budget consultations at both the federal and provincial levels and the need for housing investment was a universal theme amongst all participants, whether they were representing business, labour, seniors, students, newcomers and more – literally everyone.
These are difficult times for government and business – it is difficult for both to plan, budget and set goals. Given this dynamic environment, we should focus on what we know. Other than the cost environment, many of our economic issues today are the same as pre-pandemic (although exacerbated in some cases). Developing the workforce is a key priority – we need more people and skills development for the 21st century economy and this is an area where government has a clear and important role to play. If there’s one area to focus investment, it is here – attracting and retaining newcomers, repatriating New Brunswickers, attracting Canadians looking for a better quality of life and providing opportunities for training will pay dividends – both in the short and long term. This growth can fuel the other services that we need – a world-class education system, quality health care and the social supports that provide stability when required. Let’s make the right investments at the right time such as fulfilling our housing needs and get through this period of uncertainty and make the province’s “new normal” growth and sustainability.
Krista Ross is CEO of the Fredericton Chamber of Commerce, a nationally accredited organization with more than 1,000 members, is an active business organization engaged in policy development and advocacy that affects the competitiveness of our members and the Canadian business environment. The Chamber’s vision is ‘Stronger Community Through Business Prosperity’.