Economic and political issues in NS

[someone123]

Another positive piece of news: Shell has confirmed that their oil exploration plans for the Shelburne Basin are still moving forward in 2015/2016 despite the drop in the price of oil. The timing might actually be pretty good since it takes many years for projects like that to move forward

I could see the next few years being pretty good for NS economically.

[someone123]

Originally Posted by Drybrain

For sure, and yet the population growth was pretty good too. Only lagging a bit behind the country's major metros (except Montreal, which is growing very, very slowly). All this "Halifax is stagnating/declining" stuff really seems overblown when you see stats like this.

It's interesting to look at some of the other cities too. Regina and Saskatoon for example had very high population growth but not high employment growth. Moncton's population growth rate was slightly above that of Halifax (1.4% vs 1.3%) but employment fell by 1.1% there. Total employment is a bit less than 1/3 that of Halifax. Calgary and Edmonton are interesting because their employment growth is still strong but not quite as strong as population growth, so the employment rate fell in both cities during 2014 assuming this data is correct. This is a change from a few years ago when the employment rate was going up and population growth was trailing; it could be that we're getting farther along in that economic cycle. In 2015 if we see poor or negative job growth but high population growth in Alberta there will be lots of unemployed people.

Halifax's employment total is now up to slightly over 50% of the NS total, 65% of the employment of the entire province of NB, 96% of NF's total, and about 3x PEI. Median incomes per household are about 10% higher in Halifax than NB (that is probably conservative since it's not corrected for household size -- I'd expect smaller households in the city, though that might not be the case). Pretty soon we will probably see earnings in Halifax (HRM only, not central NS) exceed those of all of NB. This is why I think Halifax is a good spot to locate things within the region and why Moncton being near the geographic centre isn't as important as it seems. That advantage would have been larger back in, say, 1950 (although it was also harder to travel around back then, so maybe it was a wash on balance), but it is not as important today.

[someone123]

NS full time employment is up by 7,600 between January 2014 and January 2015. That is huge. The number of part time jobs declined, so the overall increase in employment was 3,400 (note that a transition to from part time to full counts as the "loss" of a part time job). The unemployment rate is down to 8.4% in NS, which is not far off from the national average of 6.6%.

This came up because there was feedback in ANS about an article they published about the bleak job market in NS. The premise of the article was that employment fell from December to January, but part of that is due to a regular seasonal shift rather than a sudden change in the health of the economy. Year-over-year monthly comparisons are more meaningful. Another negative article reporting on economic stats that are actually positive.

[someone123]

Apparently RBC is moving into the former RIM building in Bedford. They're planning to hire 500 people over the next 10 years, but there's speculation that they may end up hiring as many as 2,000 locally.

[Keith P.]

Originally Posted by someone123

Apparently RBC is moving into the former RIM building in Bedford. They're planning to hire 500 people over the next 10 years, but there's speculation that they may end up hiring as many as 2,000 locally.

This is awesome news. Of course the usual suspects are criticizing the package that brought them here, saying that the govt should have spent the money (which they haven't spent, because it is payroll rebates that only kick in once the jobs exist) on fixing potholes and leaky school roofs. Unbelievable.

[Drybrain]

Originally Posted by Keith P.

This is awesome news. Of course the usual suspects are criticizing the package that brought them here, saying that the govt should have spent the money (which they haven't spent, because it is payroll rebates that only kick in once the jobs exist) on fixing potholes and leaky school roofs. Unbelievable.

I think it's legit, though, to query why the government would bother providing payroll rebates to one of the most profitable private enterprises in the country. If this spins off into 2,000 jobs, that'll be huge, but the first 150 (which is I believe all that's firmly committed at this point) are just going to be working at some cheque-processing facility, from what I've gleaned from news reports.

[Keith P.]

Originally Posted by Drybrain

I think it's legit, though, to query why the government would bother providing payroll rebates to one of the most profitable private enterprises in the country. If this spins off into 2,000 jobs, that'll be huge, but the first 150 (which is I believe all that's firmly committed at this point) are just going to be working at some cheque-processing facility, from what I've gleaned from news reports.

Simple. Because they would not come here otherwise.

[beyeas]

I have no fundamental problem with payroll rebate grants. They are a far far cry better than the days when government would just shovel over a wad of cash to a company who could then potentially just fold a year later. The payroll rebate scheme at least requires that the jobs be created, and I would bet that it is still a net win for the province in the short term.

My issue with them, however, is more that I don't think in the long term they are a successful business strategy. It becomes no different than offering a deep sale on a new TV. You may buy the TV because it is really cheap, but the next time you go to buy a TV you have no loyalty to that brand, and if someone else offers a lower price discount, you are probably just as likely to go with them. On the other hand, if you sell someone on the fundamentals of why they need to buy your TV, because it matches what they love in a TV, then you have a chance of building loyalty to that brand. Take people who buy Apple computers... most who do have no idea whether it is any better that other products out there, and it certainly isn't the cheapest, and yet they are utterly loyal and will keep buying Apple product after Apple product.

In the end, payroll rebates are no different. Once the program is over, RBC or whoever is likely to pack up and move the jobs to whoever else will offer them the deal. This is very different from if they had come here instead for a fundamental reason that spoke to how working in NS could help their company. That we feel the need to convince companies through rebates speaks more to the fact that we have fundamental structural flaws in our provincial economy, and have difficulty therefore articulating why a company should come that doesn't involve a rebate.

[someone123]

I think in particular that NS needs to grow its own local companies that have an inherent attachment to the province. Branch offices will open and close anywhere. This is why I think Volta Labs is great.

That being said, I also agree that the payroll rebates can be a good trade-off. Whether or not corporate welfare is a good thing as a whole shouldn't matter much to the provincial government's decision making process because NS isn't in a position to change the system.

[IanWatson]

Originally Posted by Keith P.

Simple. Because they would not come here otherwise.

And I think that's exactly why people think payroll rebates and other cash-for-business schemes are stupid. If the only reason a company will come here is because we hand them $22 million, what will they do when the money runs out?

I agree we need to attract businesses, but to do that we need to make changes that actually make Nova Scotia an attractive place to do business, not just a place to cash big government cheques and then move on, hat in hand, to the next groveling locale.

[Keith P.]

Originally Posted by IanWatson

And I think that's exactly why people think payroll rebates and other cash-for-business schemes are stupid. If the only reason a company will come here is because we hand them $22 million, what will they do when the money runs out?

Then the province has enjoyed years of employment from their presence and gathered tax revenues and spinoff benefits over that time that far exceeded the cost. So hopefully they can afford to pursue soemthing even greater.

[ILoveHalifax]

It is sad that major corporations could not be better Canadian citizens. RBC should be happy to open facilities in Halifax without a great big bribe.
Corporations pay a very low tax rate with the hopes that they will create jobs, but that it seems is just not enough.
Shame, shame, shame.

[Keith P.]

Originally Posted by ILoveHalifax

It is sad that major corporations could not be better Canadian citizens. RBC should be happy to open facilities in Halifax without a great big bribe.
Corporations pay a very low tax rate with the hopes that they will create jobs, but that it seems is just not enough.
Shame, shame, shame.

Why, when other jurisdictions will offer them similar incentives? Why would they come here? Surely not for the weather.

[worldlyhaligonian]

Only in NS would people complain about jobs.

Why do we have to provide incentives? Because all the banks are based in Ontario and that province has been eating our lunch since confederation. Private companies aren't going to locate here because look at our size and location. The benefit is a lower wage and educated workforce.

This sort of scheme is much better than direct handouts to sunset industries in rural Nova Scotia (i.e. everybody in Halifax subsidizing those who choose to live in the country... at our expense).

Those who complain are simply sour. Look at the teacher scandal... thats a real issue.

[worldlyhaligonian]

Originally Posted by Drybrain

I think it's legit, though, to query why the government would bother providing payroll rebates to one of the most profitable private enterprises in the country. If this spins off into 2,000 jobs, that'll be huge, but the first 150 (which is I believe all that's firmly committed at this point) are just going to be working at some cheque-processing facility, from what I've gleaned from news reports.

The alternative is no jobs? And also... from a sustainability point of view... don't we want to attractive, otherwise, profitable businesses. Or are "Dunder Mifflins" of the world a good investment in the NS people's mind?

[fenwick16]

RBC locating in the old RIM complex is great news. Hopefully they will eventually create 2,000 new jobs in Halifax.

With the good RBC news there is some bad news that is a real headshaker for me - http://www.cbc.ca/news/canada/nova-scoti...ust-weather-related-says-union-1.2982835. Since this story became news several days ago, a couple of ships have diverted to US ports.

A good reputation is important to attract new business to the port, so I just can't understand how the situation at the Autoport is allowed to happen. Surely someone can come up with a practical solution and spend the money necessary to show that Nova Scotia means business. Everyone involved should be working around the clock to get this cleared up.

[Colin May]

Give me 3 reasons why a business should locate in Nova Scotia rather than anywhere else in N America ?

[fenwick16]

Originally Posted by Colin May

Give me 3 reasons why a business should locate in Nova Scotia rather than anywhere else in N America ?

1) There are many reasons not to locate in the US (high corporate taxes, racial tension, guns, guns, and more guns).
2) Nova Scotia has a highly educated workforce with lower wages than found elsewhere in Canada.
3) In the case of the financial sector with so much financial business done online, why is it necessary to locate in a major city?

[worldlyhaligonian]

Originally Posted by Colin May

Give me 3 reasons why a business should locate in Nova Scotia rather than anywhere else in N America ?

Funny enough, some hedgefunds have located staff here because the Atlantic Time zone is 1 hour ahead of the market opening in NY.

[Colin May]

Originally Posted by fenwick16

1) There are many reasons not to locate in the US (high corporate taxes, racial tension, guns, guns, and more guns).
2) Nova Scotia has a highly educated workforce with lower wages than found elsewhere in Canada.
3) In the case of the financial sector with so much financial business done online, why is it necessary to locate in a major city?

My question was 'any business' and you have provided no reason why Nova Scotia should be preferred over Maine, Massachusetts, Oregon or many other states or provinces.
Corporate taxes is a minor issue and based on police statistics the other issues listed in 1) may be good reasons not to locate in Halifax.
'Highly educated' is dependent on the particular qualifications and how they fit in the marketplace. Having a lot of people with a Bachelor degree does not translate to highly educated.
A company looks at several key factors : Availability of skilled labour, competent government, good schools, cultural assets, quality of life, connectivity to the world, and attitude towards business. We have the last 3 but the first 4 are somewhat lacking.