With southern New Brunswick on the cusp of an economic boom driven by several large-scale energy projects, businesses across the province are anxious to be part of the anticipated growth.
‘Our objective is to make sure all companies are prepared to have the appropriate programs and services in place to take advantage of some of the energy projects underway,’ says Richard LeBlanc, executive director of the Enterprise Network.
A slate of projects underway or proposed in the region could mean $44 billion in spending over the next 10 years, according to a report issued by Benefits Blueprint.
On Aug. 20, representatives from the province’s enterprise agencies, regional managers of the Atlantic Canada Opportunities Agency, and Business New Brunswick will meet with senior officials at the province’s department of energy.
“Our objective is to make sure all companies are prepared to have the appropriate programs and services in place to take advantage of some of the energy projects underway,” said Richard LeBlanc, executive director of the Enterprise Network.
LeBlanc co-chairs a working group comprised of officials from the above organizations that will meet every three or four months.
“It’s the same thing we do everyday with our companies, only we are doing it differently by putting emphasis on companies that might have something to gain from these projects.”
Several major projects are already underway in southern New Brunswick, including a new potash mine in Sussex, a liquified natural gas facility and accompanying pipeline in Saint John, and the refurbishment of the Point Lepreau nuclear generating station. A second oil refinery and nuclear unit at Lepreau are also a possibility.
Those familiar with the situation acknowledge that some leakage – the flow of money to out-of-province businesses – will occur.
Yet experts disagree on how to minimize leakage, or whether government should prevent it at all.
The Benefits Blueprint report, issued in April, suggested three areas that need to be addressed to ensure growth throughout the province: improve the link between businesses and the companies organizing the projects; increase the productivity of businesses so they can compete for the contracts; and expand the workforce and ensure existing staff is well-trained.
“We know there is a significant opportunity for small and medium-sized businesses to benefit from the growth set to get underway here,” said Toronto consultant Dave Hardy, who headed up the study.
The challenge, Hardy says, is to ensure that small and medium-sized businesses around the province capitalize on the work created by the larger firms, as well as the consulting and engineering firms sub-contracting products and services work.
Donald Savoie, a professor at Université de Moncton, says some leakage was unavoidable, but hoped contracts not won by firms in the province would nevertheless stay in the region.
“As these major projects go ahead, it’s an opportunity not just for New Brunswick but for Atlantic Canada to benefit,” said Savoie.
“If we narrow our focus to just New Brunswick we won’t be able to meet the demand. I don’t think they’ll have a choice – there are things that (firms in) Halifax can do that we can’t.”
Savoie and Charles Cirtwill, executive vice-president of the Atlantic Institute for Market Studies, both say the government appears to have learned from past mistakes on major development projects.
In the case of Hibernia, for instance, the massive petroleum drilling project off the coast of Newfoundland, a percentage of the labour force and contracts were required to remain in-province.
Cirtwill says this kind of protectionism doesn’t bode well for the long term economic prospects of a province.
“New Brusnwick shouldn’t mandate for these companies to win the bids. As long as government doesn’t come in with huge cheques to prop up these small companies, then it makes sense to help show them (the opportunities available). It’s up to the companies to pick up the ball and run with it,” said Cirtwill.
If companies in the province improve their productivity and lower-costs in an effort to win bids, they stand to gain not just from the boom in the province, but on developments across the country for years to come, Cirtwill said.
“The far better approach is to make sure these companies are prepared to benefit from the growth in New Brunswick, but also be competitive to bid for projects in Ontario, Quebec, Alberta.”