Province must get more competitive to remain prosperous says new report

Newfoundland and Labrador needs to focus on a lot more than oil if it wants to remain prosperous for future generations, according to a new report funded by The Newfoundland and Labrador Employers' Council.

The report, authored by The Conference Board of Canada, says the province needs to be more competitive and it includes several key recommendations in areas such as innovation, education, immigration, investment and government policy.

"Oil brought an economic boom to Newfoundland and Labrador, but that boom is ending, which means the province will not be able to rely as heavily on this industry to drive economic growth or fund government program spending," said Pedro Antunes, Deputy Chief Economist of The Conference Board of Canada. 

"Focusing on improving the province's competitive business environment will help mitigate some of the negative effects."

The report, Achieving Sustainable Prosperity: Benchmarking the Competitiveness of Newfoundland and Labrador, compares the province's competitive performance to its closest competitors in such areas as innovation, labour market, and the business environment. 

Antunes said this province did "phenomenally well" in the decade from 2003-13, with wages alone going up by 43 percent - compared to two-and-a-half percent in Ontario. But he was quick to add that the wealth generated by offshore oil is masking several fundamental problems.

The province has the oldest population in Canada and is not attracting enough immigrants to replace retiring workers, so Antunes predicts a decline in our labour force.

"That's going to be the number one challenge I think for the province. Not only are you seeing a decline in GDP, but that means very weak government revenues and an aging population that requires health care and other services," Antunes said.

The report has several recommendations on how the province can improve its economic outlook.

"Immigration is a really important piece of that," Antunes said. "The education indicators, the quality of the workforce in NL could be improved with better alignment around education and the needs of the business sector. We need to engage older workers."

Cynthia Crosbie of Crosbie Group Limited welcomes the push to attract more immigrants.

Their company supplies trade labour to the offshore and it's a constant challenge to keep workers - particularly with the aging workforce.

"To keep the workforce that are qualified and competent there is a huge challenge so to be able to bring in some new immigrants and train them into the way we perform roles is very critical," said Crosbie

The report also recommends improving the tax system, reining in debt by cutting program spending, especially in public administration and investing in infrastructure.

"Infrastructure is an investment, it pays dividends for you. Where we're spending is not on infrastructure it's in programs and services. So once that money is spent and we're using oil revenues to do that which won't be there forever, that is unsustainable, according to the Conference Board." said Richard Alexander of the Employers' Council.

There were few surprises in the report for David Haire, vice president of the Canadian Manufacturers and Exporters in this province.

He's on board with attracting more immigrants and promoting innovation. But he warns that we shouldn't get ahead of ourselves either.

"I would stick to the top two or three [recommendations]. I think if we tackle all of these we'll bog down from a strategic standpoint. People that are working on two or three things usually get two or three things done."