Saint John Telegraph Journal: N.B. has its work cut out attracting outside interest

Province does well in job numbers, but lags in dollar terms

By Kevin Barrett
Telegraph-Journal

In a very tangible way, Kevin Francis' Maritime roots have played a significant role in the Saint John economy.

In 2002, Mr. Francis, a Sydney, N.S. native took over as chief operations [sic] officer of the San Jose, California-based CenterBeam after years of executive experience with Xerox Canada.

Once thrust into the leadership position at CenterBeam, Mr. Francis convinced the firm's board of directors that Saint John would provide an affordable centre for its customer support services.

Two years later, it became a reality.

Recently, the information technology outsourcing company hired its 100th employee in the city, eclipsing its staff requirements at its San Jose office.

In many ways, CenterBeam is the poster company for attracting foreign investment to the province - a success story that Business New Brunswick minister Peter Mesheau likes to point to when trumpeting New Brunswick's efforts to lure foreign investment.

In a letter to the editor published last month in the Telegraph-Journal, Mr. Mesheau argued the province was one of the top performers across the country - landing 44 foreign direct investment projects between 2000 and 2004. Nova Scotia lagged with 32 while P.E.I. and Newfoundland lured eight a piece.

"Actually," the minister wrote, "statistics demonstrate that New Brunswick ranks 4th in the country just behind Ontario, Quebec and Alberta."

The Atlantic Provinces Economic Council, though, argues differently - it says the province is in fact dead last in bringing in foreign investment over those four years. By measuring foreign investment against total investment dollars flowing into the province, it determined that foreign interests controlled only a five per cent share.

Nova Scotia and Newfoundland, backed by off shore oil and gas developments, led the country with 41 per cent and 35 per cent, respectively. The national average was 26 per cent.

In real dollars, New Brunswick averaged $148 million a year in foreign investment over the four years - compared to a $1.6 billion annual average in Nova Scotia and $1 billion in Newfoundland.

"A lot of the foreign firms in New Brunswick are call centres. Those are good in terms of employment but it is not the same in terms of dollars," says David Chaundy, an APEC senior economist.

The APEC assessment doesn't take into account the LNG project in Saint John, where Irving Oil has partnered with the Spanish firm Repsol, or the AV Nackawic mill, which has significant investment from the Indian-based Aditya Birla Group.

Global circumstances - including the rise of Canadian dollar and the growth of the Asian economy - have hamper efforts to attract more foreign investment.

But with stagnant population, pulling in outside investors is even more vital to the province.

Statistics Canada projects that if current demographic trends remain in place, the province's population will only increase by two per cent by 2031, far behind the national growth rate of 20 per cent.

Also, the population will age significantly over that span.

Last year, 13.9 per cent of the population was 65 years of age or older in New Brunswick. That will rise to 29.1 per cent in 2031, says Statistics Canada.

In an interview, the Business New Brunswick minister says the province's goal is to create 1,500 to 1,600 new jobs a year through foreign investment. But he admits that won't be easy.

"I am a realist," says Mr. Mesheau. "It is tough. It is tough to keep what we have got and grow from within but we also have to get out there."

New Brunswick cities are deep into the effort too. Last week, Enterprise Fredericton launched a new website to promote the city's benefits to potential outside investors.

Doug Motty, executive director of the agency, says that while 60 to 80 per cent of economic growth comes from existing firms, focusing on new investors is vital for future growth.

"Overall, new investment into a community - whether it is cash coming in or direct job creation - is an important component."

Down Highway 7, Steve Carson, CEO of Enterprise Saint John, feels construction of the LNG terminal, the refurbishment of Point Lepreau, the reputation and ability of the Irving refinery, potential for investment for the province in alternative energy sources - such as wind powered energy - are reasons to be optimistic about future growth.

For Kevin Francis at CenterBeam, it being on the ground with the Xerox operations in Saint John that convinced him that the province, its workers and the low cost of doing business were right for CenterBeam. He believes so much in the province that he travels North America to speaks to entrepreneurs and potential investors to try to convince them to come, too.

"I had a real strong bias," he says, "but it was based out of real practical experience. I knew we could go to Saint John with a high degree of confidence."