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From Site Selection magazine, January 2012
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Family Ties

North America’s easternmost corner aligns its assets and its megaprojects.

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(left to right) Canadian Consul General Stephen Brereton welcomes to Atlanta Nova Scotia Premier Darrell Dexter, Newfoundland and Labrador Premier Kathy Dunderdale, Prince Edward Island Premier Robert Ghiz and New Brunswick Premier David Alward.
Photo by Virginie Kippelen courtesy of the Canadian Consulate

By Adam Bruns
Miramichi-based Sunny Corner Enterprises Inc. will increase its fabrication capabilities in New Brunswick with the support of a combined investment of more than $2 million by the federal and provincial governments. From left: Public Safety Minister and Solicitor General Robert Trevors; Miramichi MP Tilly O'Neill-Gordon; and Premier David Alward.
Miramichi-based Sunny Corner Enterprises Inc. will increase its fabrication capabilities in New Brunswick with the support of a combined investment of more than $2 million by the federal and provincial governments. From left: Public Safety Minister and Solicitor General Robert Trevors; Miramichi MP Tilly O'Neill-Gordon; and Premier David Alward.
photo courtesy of the Province of New Brunswick

On Monday night this week, Canada's best-known professional basketball player, B.C-bred Steve Nash, led the Phoenix Suns to a victory over the host Atlanta Hawks, his trademark dash of energy belying his 38 years (ancient by NBA standards).

Little did he know (or did he?) that a secret weapon was in the stands that night, in the form of four Atlantic Canada premiers and their entourages. Energy is their specialty. So is overcoming an aging work force.

Earlier that day, thanks to the assistance of the Canadian Consulate, New Brunswick Premier David Alward, Newfoundland and Labrador Premier Kathy Dunderdale, Nova Scotia Premier Darrell Dexter and Prince Edward Island Premier Robert Ghiz met with Site Selection for an exclusive conversation kicking off a three-day trade mission to this Southeastern U.S. capital.

As a group they reflect and promote the region's beguiling blend of pugnacity, gentility and poetry, which fans of the 2010 Winter Olympics in Vancouver will recall took the form of a team of kilted punk-rock fiddlers from Newfoundland. More than any other area of the continent, they sense what regional identity can accomplish.

"We know when any one of our economies improves, it strengthens the entire region," said Dexter of Nova Scotia, where last fall the Irving shipyard in Halifax garnered the lion's share of a Canadian federal shipbuilding contract valued at C$33 billion.

Dexter is quick to mention his province's 11 post-secondary institutions, and the technology investments and innovations they cultivate, all part of the province's "jobsHere" strategy. But in the next breath he draws attention to the $6.2-billion Lower Churchill Muskrat Falls hydroelectric power project now coming to long-awaited life to the benefit of both Nova Scotia and nearby Newfoundland and Labrador.

According to a memorandum of understanding reached by the two provinces in late November, peak direct employment in Newfoundland and Labrador will be approximately 2,700 people in 2013, and will generate more than $1.4 billion in total income for labor and business. The project will generate some $210 million in provincial tax revenues, plus some $525 million in federal tax revenues.

Meanwhile, major potash, tungsten and natural gas activity is ongoing in New Brunswick. And the region as a whole is launching a new venture capital program for start-up companies, with a special focus on information and communications technologies.

Asked what single best thing they and their respective assemblies can do to improve their provinces' business climates, Dexter cites a new business enhancement strategy built around innovation, competitiveness and learning, and created with the direct input of the business community. Dunderdale of Newfoundland and Labrador seconds the notion.

"The first thing business said to us was 'What are the rules? Give us clarity. What do we need to know to operate in your environment?' she said of her administration's launch in December 2010. According to an annual report released in January by the Canadian Federation of Independent Business, Newfoundland and Labrador is second only to British Columbia in red tape reduction, having reduced it by 25 percent between 2006 and 2009, and another two percent since 2009.

The province's energy plan lays out a vision well into this century's fifth decade, and, Dunderdale said, "states very clearly the expectations we have for an investor in our province, and what they'll get in return. Natural resource development to the benefit of our people is our primary core value — we're in the process of developing a modeling strategy that lays that out."

Investments in the province include oil exploration and R&D operations from ExxonMobil and Chevron, among others, as well as business growth from iron ore (Kami and Iron Ore Co. of Canada, among others), nickel and rare earths exploration activity. Oh, and that little hydro project, "which we're hopefully going to sanction very soon," she said.

New Brunswick's Alward pointed to KPMG's recent Competitive Alternatives report that identified his province as the most competitive jurisdiction in which to do business in North America. Helping it achieve that distinction, he said, is the fact that New Brunswick is the first fully broadband-covered province in Canada, thanks to the approximately $300 million in private investment the sector has accessed. He also cited the stable work force, especially in the IT sector: "People are with a company for 10 years on average. We see that as a real advantage to us. And as Canada's only officially bilingual province, we have that talent of language to bring to the table."

Alward said the legendary premier Frank McKenna brought development to the fore during his tenure in the 1980s and '90s, but "we lost that focus, and we're bringing it back. We've been working hard over the last year to redefine our economic development and innovation strategy." That strategy will be rolled out in the coming months, building on a base of 650 knowledge-based companies, and focusing on six key sectors. Recent facility expansions have included two in Moncton from ING and McKesson.

Like Newfoundland and Labrador, New Brunswick is also focusing on government accountability and red tape elimination.

"We now post any potential regulation changes online for six weeks prior to anything being rolled out, to ensure we're not doing something with a result we didn't anticipate," says Alward. "We're moving forward with a smart regulation regime — if we're putting in new regulations, we take others out."

Robert Ghiz of PEI says all the region's jurisdictions are trying to be competitive when it comes to red tape and taxation. But company leaders are asking him about innovative and skilled people.

"We have around 2.5 million people, but if you look at our universities and colleges, we can compete anywhere," he says. "Nova Scotia probably has more per capita than anywhere in North America. We're the smallest province, but we're fortunate to have a world-class university and college [UPEI]. Any company that comes in I take to meet the college president."

Hey, It's Good to Be Back Home Again

Much of the region's energy work force, including relatives of the four premiers, has gone west to work in the Alberta energy boom in and around Fort McMurray. Some even commute from Atlantic Canada.

"We've had a mobile work force in Newfoundland and Labrador for 500 years, in our fishery," said Dunderdale. "We have people all over our province who commute on dedicated flights to Fort Mac."

What are the provinces doing to reel them back in? Stacking up megaprojects, that's what. And appealing to a trait that Dunderdale said is similar to Ireland's: strong cultural connections to family and place.

"People go for six weeks and come home for two weeks," she explained. "We make sure we invest time and effort in Fort Mac and in other places where we know there are large concentrations of people from our province, and make sure they're well informed about what's going on at home."

The province is now developing a website that features all current job listings, required certifications and pay rates. And the reason job openings are queuing up because the giant projects are too. Dunderdale mentions the Hebron offshore exploration project, the $2.2-billion Vale Inco nickel processing project in Long Harbour, the Lower Churchill project, and ongoing massive expansions by iron ore companies.

"We have carefully planned and stacked those projects," she explained. "Companies know people have to have comparable pay and benefits."

The momentum already has had economic effects: Over the past eight years, the province's net debt as a percentage of GDP has decreased from 63.4 per cent to 26.2 percent, now equal to the Canadian average.

And those people are coming home, she said, because they know they have "12 to 15 years of work here if you do come home. That's extremely important, especially for young people who have established families in Fort Mac."

"I have two sons," added David Alward, "one is headed towards law and the other just got his plumbing license and is working towards his pipefitting designation. But work has dried up, and in the next 10 days he's headed to Fort Mac."

At the same time, however, just before Christmas, manufacturer and fabricator Sunny Corner, which builds drilling rigs for use around the world, opened a world-class operation in New Brunswick, and already has hired 80 of the 170 jobs it hopes to create. Alward asked those assembled at the ceremony how many had come home from "The Fort," and, he says, a good proportion raised their hands. One who didn't said he didn't come home from Alberta — he came home from Saskatchewan.

Alward said there's more to do in the areas of defense-related work and industrial fabrication, all with the aim of creating wealth in New Brunswick instead of Alberta.

"With all respect to Fort Mac, people live there because they have to, not because they want to," said Nova Scotia's Dexter. With the shipbuilding contract (21 combat vessels over three decades), the Lower Churchill momentum and a new $970-million offshore project from Shell, among others, "people can see a long-term future," he said. A recent study calculated Nova Scotia had potential reserves of 120 trillion cubic feet of natural gas and 8 billion barrels of oil. And renewable energy projects also are beginning to cluster in the region, whether capitalizing on the wind sector or the tidal momentum in the Bay of Fundy.

"They can begin a career and retire never having to leave home," Dexter said. "These three projects are stacked in such a way people can build their lives. We call it preparing for prosperity, and part of that is being able to bring home people from Alberta. They come back to their families, friends and communities. Every bit as important as higher economic returns are the social returns, people coming back to where they're from."

"We have a list of thousands of Islanders who live everywhere in the world who sent in their resumes, if anything opens up," says Ghiz of PEI, noting the continuing diversification of the region's economy beyond agriculture, fisheries and tourism into aerospace, bioscience, IT/back office and renewable energy. "What we have to do now is work with colleges and universities to make sure people are training for these megaprojects."

In a New Home

Not all of those people are native to Canada. Nor is sought-after FDI all in U.S. dollars.

In a "Talking Points" analysis on integration of migrant workers into corporations and communities issued on Nov. 30, 2011, Deutsche Bank's Dr. Claire Schaffnit-Chatterjee, while talking to Europe, pointed across the ocean for a guiding light, calling Canada "a leader" in recruiting, keeping, integrating and — perhaps above all — respecting immigrant worker skills, traditions and entrepreneurial spirit.

The premiers were on a trade mission to the United States, so were duty-bound to note their southern neighbor's status as their No. 1 trading partner: 80 percent of PEI's exports, for instance, go to the U.S., predominantly the Northeast. For New Brunswick, it's 85 percent.

"The U.S. is our best friend and that's not going to change, said Ghiz of PEI. "Having said that, we're exploring other options across the world: I've been premier for four years. I've made two trips to China, and I'm on my way to India at the end of this month. We're about to announce that one of the top five IT companies in India is going to set up their first operation in PEI, employing 300 people. And their number one issue was a skilled work force. A lot of the other countries are looking to Canada and the U.S. They want to invest over here. We're aggressive in our province at attracting new immigrants. Out of 146,000 people, there are 2,000 to 3,000 of Chinese descent. It's growing — they want to come and live the North American dream."

"If I look at our demographics, we've had some challenges," said New Brunswick's Alward. "We see immigration and solid settlement from the entrepreneurial side and skilled work force side as vitally important, and we're working collectively to promote the need for our provinces to have greater access to skilled immigrants and entrepreneurs. Other provinces, for whatever reason, have had more access than Atlantic Canada has had. So we will be more proactive as a region to take responsibility and grow opportunities for targeted skilled immigrants to our region."

In addition to short-term projects with such countries as the Philippines and Jamaica, Alward said solid Chinese and Korean communities are establishing themselves in New Brunswick. "We need to do a better job of being an inclusive, open society, so they don't make the decision to go on to Toronto or Vancouver," he said.

Alward also noted that favorable attention has come to Canada's fiscal stability during the economic crisis, often in the form of individuals seeking respite.

"We see people from England, Holland, Romania, all wanting to come to New Brunswick," he said.

"We find new immigrants come with a high level of entrepreneurial acumen," observed Dexter of Nova Scotia. Given his province's aging population, he said, "it's through immigration we're going to be able to soften some of the sharp edges of the demographic train we're on."

Premier Dexter will lead a Council of the Federation trade mission to China this fall, pursuant to multiple goals and actions outlined in the Canadian Premiers' strategy document released in July 2011, "Canada in the Global Economy."

In addition to also hosting growing communities of Korean and Chinese immigrants, "Nova Scotia has a highly successful and well developed Lebanese community, which has been very successful for many, many years," Dexter said. "Many people inside Nova Scotia don't know that. We've developed great ties with Lebanon and helped develop that community."

As for Newfoundland and Labrador, "if we brought every one of our people home that works in different parts of the world, we wouldn't have enough," said Dunderdale. The province is home to only half a million people, all with a strong sense of identity. It also includes immigrants from more than 100 countries, and 70 different languages. But the U.S. continues to maintain the strongest foreign ties.

"The fishery brought us here 500 years ago," she said. "We sold our fish to New England, which we called 'the Boston States.' We have four American bases in Newfoundland and Labrador," translating into years of Newfoundlander women marrying U.S. servicemen. And there is the dynamic mix of people associated with the offshore oil work.

"When companies are talking about having to bring in skilled workers, they also look to the U.S., particularly the Northeast U.S.," she said. "So there's an interest in immigration from the U.S., as well as from China and India. There is lots of room in Newfoundland and Labrador, and lots of opportunity. We have a shared history around so many industries, particularly the fishery. Those shared interests have been there for a very, very long time, and extend right down our borders."

If the queue of megaprojects is any indication, people and companies may soon begin to share a deeper interest in the deep waters and character of Atlantic Canada.

In early December, Innovation and Advanced Learning Minister Allen Roach (left) and Paul Wheaton, CEO of Atlantec BioEnergy, look over ethanol tanks ready for installation at the company's new R&D facility in Cornwall, PEI.
Photo by Brian Simpson, Provincial Photographer

Adam Bruns
Managing Editor of Site Selection magazine

Adam Bruns

Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.

   



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