Joint Letter: Protecting the New Brunswick economy

Hon. Blaine Higgs, 

Premier Province of New Brunswick 

Chancery Place, P. O. Box 6000 

Fredericton, NB E3B 5H1

Via email: blaine.higgs@gnb.ca

Re: Protecting the New Brunswick economy Dear Premier Higgs,

15 March 2022

On behalf of business communities we represent across New Brunswick, we applaud and thank you for your attempts to seek immediate, temporary relief at the gas pumps for consumers and businesses until prices stabilize, and for “looking very seriously” at what can be done to lower these record gas prices.

We believe that this is a step in the right direction, as the cost of energy threatens to severely exacerbate other looming threats to the province’s economic growth. Between interest rate hikes, gasoline prices reaching record highs, housing market availability and affordability and a surge in inflation – our economy is entering a new crisis after two years of the pandemic. New Brunswick’s economy has fared relatively well through COVID-19, but that position is now being eroded by these other pressures. The longer this goes on, the closer we are to seeing what’s been driving the recovery – household spending and real estate (by all accounts) bubbles – that are about to pop, the question becomes ‘What measures can the government put in place to mitigate those financial pressures?’. Are there other mechanisms at government’s disposal – deferred or reduced property taxes, reductions in provincial gas taxes, housing programs, or direct financial assistance – that can work as effectively or better to stave off economic paralysis?

The financial pain of this situation is not only being felt by people commuting to work. Businesses are dealing with the challenge of passing on cost increases to consumers, which in turn adds more pressure on employers to raise another major cost – salaries. When faced with these inflationary financial pressures, most individuals and businesses only have one tool – reducing their discretionary spending. Consumer spending has been a primary factor of the province’s COVID-19 economic recovery and in order to continue our positive momentum, it is essential that your government take action to mitigate the effects of these inflationary pressures on consumers and businesses. We encourage your government to use surplus revenues generated during the 2021-2022 financial year to create surge

protection-type, short-term crisis relief to businesses in order to bridge this temporary roadblock on the road to recovery.

Following our most recent discussions with economist Herb Emery, we are convinced that government must rapidly implement measures to buffer the economy and mitigate the sharp unanticipated increases in costs. Business has the capacity to adapt over time, but not without urgent bridging help from the government to minimize the impacts and protect business, and the economy, from stalling.

This situation draws many parallels to what was done to protect the healthcare system from a surge during the height of the pandemic. The solution here is to keep consumer spending power robust without adding additional wage costs to business – maintaining business viability and while keeping households above water. The measures by government to help guide our economy through this short- term crisis are more straight-forward than what we needed to fight COVID-19 – it is getting relief to households and businesses in a timely and effective manner.

If New Brunswick needed protection against a surge in COVID-19 cases during the pandemic, we now need inflationary surge protection. COVID-19 threatened our personal health; inflation, rising interest rates, skyrocketing housing prices, huge increases in energy costs combine to threaten our economic health.

Once again, we hope we can continue to count on your government to provide leadership and whatever support is necessary to ensure that New Brunswick and our small businesses continue on the path to recovery and prosperity.

Sincerely,

John Wishart, CEO, Chamber of Commerce for Greater Moncton
Krista Ross, CEO, Fredericton Chamber of Commerce
David Duplisea, CEO, Saint John Region Chamber of Commerce
Cathy Pelletier, Executive Director, The Chamber of Commerce of Edmundston Region

Cheryl McGraw, General Director, La Chambre de commerce et du tourisme du Grand Caraquet Paul Bedford, President, Sussex and District Chamber of Commerce
Sheri Somerville, CEO, Atlantic Chamber of Commerce

Julie Pinette, General Director, The Chaleur Chamber of Commerce.