by Charles Cirtwill

It is a well accepted truism in almost every aspect of human existence, “no pain, no gain”.

We apply that to our efforts at personal development, physical fitness and even to the raising of our children. A little pain now is seen as the price to pay for a lot of benefit later. We also accept that a little pain now will often communicate the lesson to be learned far more permanently in our psyche than just being told that the iron is hot or that your tongue will stick to cold metal.

Yet, there is one area of human endeavour where we do not apply this rule.  Note, I did not say it is inapplicable, I said we do not apply it.  Or at least we do not apply it here in Atlantic Canada.

That area is human commercial interaction, otherwise known as the economy.

People buy products that deliver the most benefit to them at the lowest cost. Other people want to sell those products in order to make the money they then use to buy other people’s goods. Therefore, people come up with new and innovative ways of making things so that their products are cheaper or deliver more value. Old businesses die and new businesses take their place. Economic innovation, experimentation and growth involve, as does every other human activity, a certain amount of risk and an unavoidable quotient of loss.

Successful economies, large and small, get this. Not only do they get it, but they act on it. They create an environment where any business can thrive, where risk is accompanied by reward and where failure is celebrated, not ridiculed, unless you learn nothing from it. The focus in those economies is how to lower costs, how to improve access to markets and how to increase access to and reduce the costs of the factors of production (land, labour, and capital; human and intellectual).

But in Atlantic Canada things are different. As a general rule we are extremely risk averse. Risk to us, isn’t about the reward, it is about the potential harm, and not just to us but to others. We care for and worry about each other in a real, tangible way. Hence we have among the highest rates of charitable giving, but we are also almost fanatically committed to protecting every person with a job in this region from losing it, sometimes no matter what the cost.

Our governments reflect this aversion to risk. They focus not on creating an environment where innovation is encouraged but on selecting either the right business or the right sector to invest in. Infrastructure is left to decline while millions are spent on forgivable loans and payroll rebates. Consider some of the recent recommendations of the self sufficiency task force in New Brunswick.  Another $500 million from Ottawa, federal and provincial jobs spread around the province to prop up failing communities, and government equity positions in companies in order to mitigate the risk (and the reward).

Our aversion to risk is reflected in our mixed feelings about entrepreneurs. Some we embrace, others we do not. Some entrepreneurs who have not struck it rich are ne’er-do- wells who can’t get a real job. Other entrepreneurs who are successful “know somebody”, were “just lucky”, or are simply reviled for their success. Entrepreneurs as a class are unwelcome, because they are comfortable with risk and we are not, and so they succeed despite us, they go elsewhere, they don’t innovate, or they fail.

The result of this is a precipitous decline in our economy.  In 2005, Voluntary Planning in Nova Scotia did a study comparing that province to 15 “peer economies”. In 1981 Nova Scotia was ranked 4th out of 15, by 2001 they were last. Similar declines are in evidence across the region with out migration and labour shortages being only the latest and most visible evidence of that.

If Atlantic Canada is going to reverse the innovation gap that according to one estimate costs us between five and ten thousand dollars per person, per year, we need to get more comfortable with risk. We have to get better at managing our collective grief at the pain of displacing those 500 workers at the chocolate factory, the steel refinery or the pulp mill.

If we can all accept that a scraped knee is the price of learning to walk, then we must also accept that a lost job can be the price to be paid for a new economy and more opportunity.


Charles Cirtwill is the acting President of the Atlantic Institute for Market Studies, a non-partisan public policy think tank based in Halifax.