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JDI Roundtable on Manufacturing Competitiveness in New Brunswick

Wither the North

Herb Emery

For a funny guy, Marshall Button writes some depressing commentaries about the North of the province. His latest commentary on the North Shore as the “underdog of New Brunswick” harkened back to the Dalhousie of his youth where the feeling of “living on the edges” and being overlooked was met with a North Shore swagger to take on the Goliath of southern New Brunswick. Today, the fight seems gone from the underdog, leaving the Northern Tiger of post-World War II New Brunswick toothless, now caged during COVID, and a “kept region.” As now Moncton residing Marshall Button put it, “in the mid-1990s we stopped being hewers of wood and drawers of water and became losers of work and drawers of pogey.”

The North Shore was one of the great provincial and federal government growth projects after World War II. Provincial effort, and Federal dollars, went into developing secondary manufacturing of natural resources and the region’s valuable mineral deposits. By the 1960s Bathurst was considered the fastest growing city in New Brunswick while the North Shore’s pulp and paper, mineral smelting, and fish processing added to the province’s other industrial powerhouse of Saint John. The population of Restigouche and Chaleur as late as 1976 dwarfed that of Fredericton and York County and rivalled that of the Moncton and Saint John regions.

As late as Richard Hatfield’s tenure as premier, it seemed understood that New Brunswick’s impressive growth after World War II, and likely future prosperity, depended on its resource sector-based exports. In the North, Button describes how “the sweat of our brows was the fuel that ran much of the rest of New Brunswick”… and “you get the sense that most of the tax revenues from the high-paying jobs in the north were sucked into provincial coffers in Fredericton, only to be squandered on questionable projects in other regions”. Button may be referring to high profile failures like the Westmorland Chemical Park in Dorchester or Bricklin in Saint John.

It’s not clear how important taxes from the North Shore were for the “questionable projects” in other regions as opposed to provincial and federal government decisions for where to spend federal dollars aimed at growing the provincial economy. As great as the resource industries were for generating wealth and good paying jobs, the province’s high dependence on them created some political headaches with their volatility. Governments generally failed to manage programs and revenues to smooth out the labour market volatility resulting in communities feeling insecure about the future of their mills, mines and plants. Labour unrest at the mines and mills in the region made headlines. Government had to work to keep the large multinational mill and mining interests willing to sustain their peripheral operations in New Brunswick when market conditions turned for the worse. That created a growing interest in pushing a diversification of the industrial base of the province to industries that were not tied to the resource sector using federal monies for industrial incentives. 

The industrial diversification push also addressed the problem that the province was trying to grow other parts of the province that were struggling and did not have the resource base of the North of the province. The province created industrial parks in Charlotte County, around Saint John, and in Dorchester’s infamous Westmorland Chemical Park. Attempts were made to attract manufacturing establishments that would export from New Brunswick while not being dependent on the natural resource base. By the 1970s and into the 1980s, the province identified several target areas such as metal fabrication, electronics and some industries that would support the supply chain of the emerging offshore oil industry in Atlantic Canada. 

Another development from the industrial diversification push in the 1970s was the increasing focus of federal money for industrial incentives to attract industry to the south’s dominant urban centres, Saint John and Moncton.

In his review of New Brunswick’s economy and politics[1], Richard Wilbur observed that in 1971 “While the economic sun beamed on southern New Brunswick, it seemed totally absent in the north.” Wilbur’s harsher, more detailed explanation was “One way to visualize New Brunswick’s economic picture in 1971 would be to draw a line diagonally across the province, from slightly north of Moncton through to Fredericton and the US border. To the south lay prosperity, especially in the old port city of Saint John. To the north lay sick and in some cases, dying pulp mills, retarded base metal mines and a declining fishing industry.”

Wilbur describes December 1, 1971 as “Black Wednesday” for Bathurst when the Consolidated Bathurst pulp and paper mill and several nearby base-metal mines announced layoffs of 750 workers. 280 more workers faced job losses that same month when the American-owned Gorton Canada Limited announced its plan to sell its facilities at Caraquet and move to the Magdalene Islands based on a Quebec government offer of a large subsidy for a new and larger plant that could be operated eleven months a year instead of seven. Wilbur assessed that Premier Hatfield in 1972 seemed to have no plan that would “stem the continuing decline in resource-based industries, especially those in the northeast, which seemed to be surviving on welfare and DREE (federal) cheques.”

In response to “Black Wednesday,” The NB Federation of Labour (NBLF) organized “a mammoth ‘Day of Concern’” for Bathurst on January 1972 to draw attention to the economic crisis posed by large lay-offs. In advance of the event, the NBLF called for the provincial government to immediately place a freeze on layoffs and for a “vigorous intervention by the federal government,” preferably by naming the northern counties “special areas” for federal DREE funding.

Wilbur describes January 16, 1972 as likely the longest day of Premier Hatfield’s life when he joined Robert Stanfield, Leader of the Progressive Conservative Party of Canada, David Lewis leader of the Federal NDP, and Jean Marchand the federal Minister of Regional Economic Expansion on the speaker’s platform in Bathurst. Wilbur describes the audience as comprised of “3500 anxious and at times angry citizens.” 

The “Day of Concern” crowd called for Mathilda Blanchard, a union organizer from Caraquet, with repeated chants “On veut Mathilda! On veut Mathilda!” Upon gaining the podium, Blanchard, pointing to Minister Marchand, “said the only thing the federal government had done was to study and restudy the region and then to tell the people they were illiterate and should move to urban areas. ‘You’ve destroyed our forests. You’ve destroyed our oyster beds. You’ve ruined our farms with your property taxes. You’ve ruined our education system and reduced our unemployment insurance scheme to zero by moving everything to Moncton. But we’re not moving!” Wilbur reports the crowd carried her shoulder-high from the arena.

The “Day of Concern” led to provincial and federal government response and action. In September 1972 Premier Hatfield and Minister Marchand returned to Bathurst to announce in front of a friendlier crowd that an amendment to   a 1966 federal program (Fund for Rural Economic Development) would provide another $68 million ($440 million in 2020 purchasing power) to the North Shore area by 1976 “to alleviate what Mr. Hatfield called ‘the profound socio-economic problems of the North East.’” 43 percent of those funds would be from the province. Hatfield stated that the new agreement emphasized “the roles played by residents of the area in identifying and solving their own problems.” Mr. Marchand said “that the primary goal would be the creation of jobs and the training of people to take advantage of available employment.”  In subsequent actions, the province revamped its forest policies and introduced short term supports for ailing pulp and paper mills until the markets for their outputs recovered. 

What would bring a PC Premier, two federal party leaders and a federal Minister in January to face a large angry crowd in Bathurst in 1972? One draw was the swagger and regional fighting spirit that Button describes for the old North Shore. Second, politically the North of the province was much more important than today. In 1966, 44 percent of the province’s 616,000 residents were in the North as defined by Wilbur. 50 years later in 2016, the province’s population reached 750,000 but most of that growth was in Moncton and Fredericton and their surrounding areas. With no population growth after 1976, the North accounted for 35 percent of the province’s population 2016. Saint John, once the industrial engine of the province has not seen the gains of the other two cities since 1976. 

What explains the underdog North Shore losing its political bark and perhaps even bite?  Industrial decline in the resource-based industries is definitely a factor. Today, 36 percent of employment in the Northeast is in Health Care and Social Assistance, Education and Public Administration compared to 30 percent for the province overall. Where the sweat of the northern brow once fueled New Brunswick’s economic engine, the region today depends on spending decisions in Fredericton and Ottawa. Population aging also plays a role. The northern population today is older, comfortable and much more accepting of its economic condition than in its youth when it was willing to fight, and fight dirty if needed, to get the win over those entitled elites in the south.

But that explanation may be too simple. Mining may or may not have depleted its ore bodies and be a spent force. Forest industries have faced global rationalization and relocation of production but New Brunswick did not lose the industries, the North Shore did. Unlike the south and west of the province where the mills remain, the province invested in four lane highways while not building up the infrastructure of the North. The Northwest with access to the four lane Route 2 has only 28 percent of its employment in the broad public sector because 20 percent of its employment is in manufacturing, many based on the same forest industries that once drove the economy of the Northeast. 

The North Shore of New Brunswick is no longer the economic engine that it was but it is a cautionary tale for the province. By choosing to turn away from our comparative advantage in resource-based manufacturing industries, we move from being the respected, scrappy underdog of Confederation to a pitiable ward of Ottawa. As Marshall Button points out, people like to root for the underdog. 

[1] New Brunswick: An Annual Review, 1960-2006. Published by Atlantic Canada Portal and Electronic Text Centre, University of New Brunswick Libraries, 2008.

Herb Emery is a Brunswick News columnist and the Vaughan Chair in Regional Economics at the University of New Brunswick.

This article first appeared in a Brunswick News publication - Oct. 31, 2020

The JDI Roundtable on Manufacturing Competitiveness in New Brunswick is an independent research program made possible through the generosity of J.D. Irving, Ltd. The funding supports arms-length research conducted at UNB.