Sustainable growth starts here
A lot has been said about the tax dollars spent on the shipsstarthere campaign. Very little has been said about the $500,000 spent by the Irvings. Those funds represent the first tangible return on this opportunity, the first instance of the “multiplier” in action. Certainly the public relations firms, web designers and sign printers involved appreciated the business.
The Canadian government has been explicit about their intention to leverage our ongoing national need for ships into the base for a vibrant, sustainable, world leading ship building industry. They have done their part. First by letting a few very large long term contracts instead of a series of signficant but largely patchwork smaller deals. Second, and this was a near miracle, keeping politics largely out of the process of awarding those contracts.
Now it’s our turn. The Irvings showed the way, by putting their own money at risk to engage the community and market our skills to the world. Others are following suit. Small and medium companies alike are trying to identify the components and the likely quality standards that will be required to be sub-contractors on this project. This is a natural extension of what we learned from our offshore opportunity: that our region is small and local contracts are limited as a consequence, but that the skills and expertise built on those contracts open up a huge vista for global work. Our revenues from the offshore are declining, as will the federal spending on ships, but our offshore service industry is still here, and the goal is to ensure our shipbuilding capacity outlives this first 25 year contract. I trust the folks on the current trade mission in Israel are enquring about the age of the Israeli coast guard fleet.
What else can business do to help our province maximize this opportunity? Well, they can throw a party, as the Halifax Chamber is about to do. That is not sarcasm, boosterism is important, just ask the companies who funded Calgary Mayor Nenshi’s recent across Canada dog and pony show. Indeed, that was almost entirely what the shipsstarthere campaign was about and it was a huge success in that regard. Its success rivals that of the smartcity campaign of almost a decade ago.
Of course, the smart city energy died out, even as smart industry continued to grow in our region. That is our second biggest challenge today, sustaining the shipsstarthere enthusiasm and using it to leverage growth in other, unrelated, sectors. Gordon Stevens from Uncommon Group has suggested that two ways to do this are for consumers to spend and businesses to hire. That’s a good place to start. He would prefer you buy “local”; I am content if you just buy, but either way, get out the debit card please.
On the hiring front, yes take the leap, but while you are it lower the bar. We have a talented workforce who may not have five years experience or who may have fewer working years ahead than they do behind them. In either case, learn from the Irving example and share some of the risk. Model successful companies who hire and grow their workforce, unafraid to lose a well trained “investment” to a competitor because they are confident in their ability to attract a similar investment away from the competition in return.
On that “skills” theme, I hope parents, young people and society alike will use the shipsstarthere resources to revaluate the skilled trades. I have always been struck by the disconnect between people complaining about the outrageous rates they pay for plumbers, electricians and carpenters and the disregard we have collectively held for these, and other, skilled trades as the basis for a prosperous and well rounded life. We have spent at least two generations pushing everyone to go to university. But such a one-track mind has predictable results: high student debt loads, high student unemployment, “education inflation” (a degree isn’t worth what it once was), and a shortage in skilled trades people. Aerospace and the offshore helped put a dent in our collective bias against skills, here’s hoping ships can torpedo it entirely.
Finally – and this will be the hardest of all – don’t demand government start spending this money. With a $25 billion contract, and talk of $600 million added to our annual GDP and $100′s of millions added to the tax take of federal, provincial and municipal governments, it seems like nothing is now unaffordable. Nothing could be further from the truth. We have deep, structural issues on all of our government’s books. This contract and its spin-offs give us a good chance of fixing those problems, but not if we keep demanding ever more spending and ever lower taxes. Business can help set an example by tempering their own expectations for new boutique tax credits or targeted incentives.
Restraint, prudence, and sustainable growth – like ships – start here.
Charles Cirtwill is President of AIMS, an independent economic and social policy think tank based in Atlantic Canada.
