RESETTING the SWITCH on ITS Headlines for a Refit Extraction of Minerals and Gases.” Look at What the Business Case Actually Is, Dept

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New Brunswick In 1983, the Point solutions that work. As for the potential of The Mactaquac Dam is Lepreau generating Brunswick. In particular, the expansion of a hydroelectric dam built SPECIAL REPORT station was the first the natural gas sector in an environmentally building a second nuclear reactor, this is an on New Brunswick’s CANDU 6 nuclear idea that is on my desk, for sure. But I think Saint John River. It reactor in the world to responsible manner will be promoted. New generates approximately achieve commercial regulations will be developed under the everyone understands that we’re going to 20 per cent of New operation. In recent Brunswick’s power. years, it’s made Petroleum Act to govern the exploration and have to reset the whole process and take a Photo courtesy NB RESETTING THE SWITCH ON ITS headlines for a refit extraction of minerals and gases.” look at what the business case actually is, Dept. of Energy. that is both years behind schedule and Of course, none of this will be easy, as and move forward from there. The key thing millions of dollars Craig Leonard told Atlantic Business we have to remember in New Brunswick is over budget. The refurbishment is Magazine in an interview not long ago. The that Lepreau, itself, is a great asset.” expected to be Apart from this, however, Leonard and completein 2012. province’s new Minister of Energy and the Photo courtesy NB Minister responsible for the Energy other energy experts in New Brunswick Dept. of Energy. Efficiency and Conservation Agency of agree that the province’s main strategic New Brunswick (which incorporates the advantage lies in the diverse mix of ENERGY operations of Efficiency NB), knows he has generating options it can deploy to erect a his work cut out for him. But, he appeared more efficient and cost-effective generation, Still, the November Throne Speech did freeze of electricity rates for New Brunswick both calm and optimistic, even about Point distribution and transmission system. At the provide some clues to Alward’s priorities. ratepayers. That work is underway. As well, Lepreau – where Atomic Canada of Energy moment, the province’s energy needs are “Your government [is committed] to an Energy Commission has been Ltd. (AECL) has been struggling with largely supplied by coal, diesel and oil-fired hide his enthusiasm. “The fact remains,” he by a 100 megawatt wind farm can reach FUTURE putting New Brunswick first with focussed established to develop a progressive, long- engineering and mechanical problems thermal stations (2,400 megawatts); says, “New Brunswick has the potential to $200-million over the 25-year life cycle of hydroelectric plants (890 megawatts); and , in the waning months of 2009, leadership,” it promised. “[We] will act on term provincial energy policy and provide related to the reactor’s calandria tubes – become the Saudi Arabia of wind. The wind the project. Furthermore, since these Point Lepreau, when it’s operating (700 former New Brunswick premier this by addressing [the province’s] energy guidance on both the future direction and the possibility of constructing a second resource map my team and I unveiled in estimates do not take into consideration megawatts). Less significant sources are Shawn Graham announced his challenges. [We] will put in place a of NB Power and New Brunswick’s nuke in the not-too-distant future. 2007 clearly showed exceptional wind eventual revenues from the trading of carbon When “Obviously, our first job is to get that natural gas and renewable forms of power, deal to sell the province’s energy utility to Hydro-Québec, legislative committee to ensure that the energy sector. The commission will potential for 4,000 megawatts of installed credits, the profits could be much higher plant back up and running,” he said. “But specifically wind. he did so with the confidence and bravado of a man who refurbishment of Point Lepreau is the release a 10-year strategy with specific wind-generating capacity along the Acadian once carbon markets are introduced into the we certainly feel a lot better about that About this last option, Yves Gagnon, a truly believed he was doing his fellow citizens an number one priority for NB Power and recommendations in 2011.” Peninsula.” economy.” today than we did a few months ago. We’re professor of mechanical engineering at the enormous favour. help bring that project to a successful close. Meanwhile, the speech declared, “your Moreover, he says, another research For this reason and others, Gagnon is confident that AECL has actually figured University of Moncton and the province’s After all, at that time, NB Power accounted for half of NB Power has been directed to establish government will foster the growth of the document he released at around the same sceptical about the benefits of nuclear out the problems and have come up with recognized authority on the subject, doesn’t New Brunswick’s accumulated $7-billion debt. The refit a mechanism to implement a three-year mineral and petroleum sectors in New time stipulated that, “The profits generated technology, which he believes is dirty and of the Point Lepreau nuclear generating station outside Saint John was foundering (years behind schedule, and millions of dollars over budget). Natural gas development was hobbled by regulatory red tape and a 15-year-old arrangement with western-Canadian-owned Enbridge that many industrial users considered monopolistic and Your perfect Winter getaway! uncompetitive. Coal and oil-fired plants needed expensive facelifts. And renewable energy technologies were not yet in the wind, the water or the sun-baked soil for those fortunate enough to own a piece of heaven on Think of it as your four and a half star playground. uncertain earth. For Grown-ups. Why not, then, make the grand play for solvency? Why not solve the energy and fiscal problems of a province teetering at the brink of bankruptcy with one bold move? Why not make the clarion of “transformational change” and the boast of economic “self-sufficiency by 2020 or bust” hardcore reality? Why not, indeed? Flash forward a year, and the future of New Brunswick’s energy options remains no less murky, though the debate has utterly reshaped the province’s political landscape. David Alward and his Progressive Conservatives swept into power last September – assigning Graham and his Liberals the dubious Saint John Refinery distinction of becoming the first one-term government in modern New Brunswick history – by tapping public outrage over the attempt (which ultimately failed) to sell out to Hydro- Québec. Now, a new premier sits in Fredericton, aware of the difficulties and yet cognizant of just how explosive the Hon. David Alward, Premier energy file can be for anyone who City of Saint John 1.877.859.7775 | CasinoNB.ca 21 Casino Drive | Moncton NB E1G 0R7 seeks to remain in public office. PLEASE PLAY RESPONSIBLY. MUST BE 19 YEARS OF AGE OR OLDER.

have excellent hydro, wind, nuclear (when take this situation seriously, and they it’s back on line, we will own a fantastic, WE NEED TO LEARN LESSONS FROM THE BEST recognize the urgency of the situation IN THIS SITUATION, brand new 30-year reactor). We have all PEOPLE WE CAN AND THEN WE HAVE TO PUT OUR BEST we’re in, then there will be enough WE ARE STARTING SLOWLY WITH ONE OR TWO these attributes to our generation mix. I’m savings. But this sense of urgency has very leery of going full bore in one TALENT TO WORK ON A STRATEGY GOING FORWARD.... I to be felt by every citizen. Every drop PER CENT CUTS �IN GOVERNMENT SPENDING�, direction.” DON’T SEE HOW THE PROVINCIAL GOVERNMENT CAN WORK is what we are looking for.” WITH A COMMITMENT OF TWO PER CENT Indeed, new opportunities for energy ITS WAY THROUGH THIS WITHOUT SOME TAX INCREASES. Those messages came through ANNUAL CUTS AFTER THAT. WE NEED TO HAVE diversification are emerging. Shale gas loud and clear in the new exploration in the province promises new DAVID GANONG government’s November 23 Throne PEOPLE THINKING DIFFERENTLY, TO CREATE A PRESIDENT export potential thanks to New Brunswick’s GANONG BROS. Speech when it declared, “This DIFFERENT CULTURE. advantageous proximity to energy hungry situation is clearly unsustainable. HON. BLAINE HIGGS Irving Oil’s Saint John Refinery is one of the 10 largest refineries in North America, and the largest refinery in Canada. customers in New England, where the cheap, Your government has come forward MINISTER OF FINANCE It produces over 300,000 barrels of finished energy products per day. Photo: irvingoil.com reliable fuel is quickly displacing other with a comprehensive plan to change sources of power in the marketplace. what we all hope for, but it depends on will be important. It’s developing the will stick to that. There are so many the culture of government and to horrendously expensive once all the he [Gagnon] says New Brunswick could be the As well, Newfoundland and Labrador’s so many circumstances that are difficult strategy. If we can’t do that, then other areas to look at.” address the challenges facing our “externalities” are considered, such as plant Saudi Arabia of wind, I think he’s absolutely and Nova Scotia’s partnership to wheel to predict. It then has to look at cutting somebody else will start making Indeed, he said: “In this situation, we province through responsible fiscal Engineering and Environmental refurbishment costs and the safe disposal of right in that we have the right geography,” the Lower Churchill hydro power via undersea spending in a very serious way, the way decisions for us. [Having said this] are starting slowly with one or two per management, citizen engagement and Design and Consulting spent, radioactive fuel. “There are a lot of minister says. “I also think there’s no question cable into the Maritimes could have an that we have never experienced in the I don’t see how the provincial cent cuts [in government spending], with focused leadership. This plan details misconceptions about renewable energy,” he about the eventual ascendancy of renewables.” enormously beneficial effect on rate stability province. And then, it has to increase government can work its way through a commitment of two per cent annual the actions your government will says. “Too many people here think wind, But, he adds, “There are also commercial and transmission revenues in this province, taxes.” this without some tax increases.” cuts after that. We need to have people take to put our province back on tidal, solar and biomass alternatives aren’t and market realities to consider. Wind has its should the new government in Fredericton Or as David Ganong, president of This, however, is a non-starter, at thinking differently, to create a different the road to prosperity while viable. But these technologies and processes own set of challenges. It’s a more expensive cooperate with its regional counterparts. St. Stephen-based Ganong Bros. and least for the time being. In an interview culture. The best successes are derived addressing New Brunswickers’ priorities, including jobs, education are being put to use and to good effect in form of electricity for us to produce and In the end, if New Brunswick’s energy a leading business light in New with Atlantic Business Magazine, when everyone is rowing in the same EXPERIENCE other parts of the world.” bring on to the grid. It’s more expensive also options remain murky, at least – or so it Brunswick, told the Saint John Finance Minister Higgs stipulated, direction. What we’re not going to do is and health care.” VISION Leonard doesn’t disagree. Not exactly, at any in terms of balancing it with other forms of appears – there are options for a change. And Telegraph-Journal in November: “We “We’ve been pretty clear about that in spend $300,000 on an external audit, This plan, the speech promised, COMMITMENT rate. New Brunswick currently maintains less generation. The windmills only blow so this should be cheery news to legislators who need to learn lessons from the best our platform. We have a lot of other which would typically be done by a new “contains many measures to put than 300 megawatts of installed wind much of the percentage of the day. Again, it’s might, for once, wish to avoid committing people we can and then we have to put areas to pursue. Premier David Alward government. 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No, what raised eyebrows around the room was the exceedingly rare spectacle of an elected official bluntly THE GOVERNMENT NEEDS Blending Classroom Knowledge and candidly confirming the bad TO DO THREE THINGS. with Real-World Experience news with no sugar to coat the truth. IT NEEDS TO PROMOTE GROWTH AND SEE GREATER REVENUES FROM “As a government, we are spending Expand. Export. Innovate. THIS.... IT THEN HAS TO LOOK AT CUTTING SPENDING IN A VERY SERIOUS more money than we receive,” WAY, THE WAY THAT WE HAVE NEVER EXPERIENCED IN THE PROVINCE. he said. “Our fiscal circumstances are unprecedented and simply AND THEN, IT HAS TO INCREASE TAXES. Gain the knowledge and entrepreneurial skills needed to unsustainable. We need to ask DONALD SAVOIE CANADA RESEARCH CHAIR IN PUBLIC ADMINISTRATION AND GOVERNANCE succeed in business with one of our MBA programs: ourselves some tough questions and, UNIVERSITÉ DE MONCTON in return, receive honest answers. It increased by less than one percentage • General MBA (full-time and part-time) is time for politicians to be brave point between 2007 and 2009. enough to admit that we’ve been Meanwhile, industrial growth (and the • MBA with Concentration in Entrepreneurship building bigger, but not necessarily levies it supplies to public coffers) has • MBA/LLB better for decades. Mostly what slowed to a snail’s pace due, in no small • MBA Engineering Management we’ve bought ourselves is a bigger measure, to the recent Great Recession, problem and bigger debt.” • MBA Sport and Recreation Management which has kicked the stuffing out of the In fact, for the fiscal year 2010- province’s export sector and undermined • Plus a variety of courses providing hands-on learning 2011, New Brunswick’s annual the fortunes of several, traditionally deficit is projected to be $800-million important industries, including the once- – up from $749-million only six mighty forestry. Faculty of Business Administration months ago. Its total accumulated As brutal as these challenges are for University of New Brunswick Fredericton debt is forecast to exceed $8-billion. policy makers, an even tougher one may Tel: 506.453.4766 Fax: 506.451.6946 If things don’t change dramatically be overcoming the natural limits of [email protected] for the better, the yearly shortfall will human apprehension. Simply put, a website: www.mba.unbf.ca rise to $1-billion on debt of $10- billion is a number so vast it can only be billion by 2012. Just as troubling, understood through metaphorical sleights perhaps, the rolling deficits have of hand. After all, if we’ve never actually become structural, rather than seen a billion of anything, does it really cyclical – the distinction being the exist? Who can get worked up about a former is largely immune to the debt no one can actually enumerate in the normal cycles of economic recovery. span of a normal life? If we don’t peek All of which firmly places the behind the curtain, we tell ourselves, but province near the very bottom of merely go about our lives as we always Canadian fiscal performance. have, nothing terrible will happen to us. The culprits in this conspiracy Of course, at some point, the curtain are predictably difficult to finger always springs open as it did in Ireland in with absolute certainty. But most November, when International Monetary politicians, business leaders and Business New Brunswick can help you Fund officials combed through that economists blame an unprecedented country’s books and demanded sharp rise in the cost of health care expand, export, or inject innovation budget cuts and brutal retrenchments as as the population ages more rapidly into your existing business. a condition of their multi-billion-euro than it has in previous decades. bailout. All at once, the inconceivable A PROFESSIONAL ENGINEER

Other factors include the increasing became starkly real and tangible: Foreign expenses of maintaining a modern Whether your business is large or small, rural or urban, bankers were now running the show, and efficient public school system for we can help you make smart business decisions. making policy, cutting programs. The a dwindling base of children; safe “Celtic Tiger” was declawed and left and durable transportation corridors Talk to us about finding leading business experts, sources of financing, mewling for its handlers’ table scraps. CAN SEE WHAT OTHERS CAN’T. and municipal infrastructure; and a New Brunswick is nowhere near precipitous rise over the past nine export market intelligence, expanding your business and more. befalling such a calamity; and the good years in the number of public sector news is the current crisis is generating an Because their licence means they have the education workers (some estimates suggest unprecedented degree of collaboration government or government-based and engagement at least among those and experience to give them a more comprehensive employment has increased by 14.3 Let us transform your ideas into who have no difficulty counting to a per cent, compared with private- billion. perspective. Every professional engineer is committed to A constituent member sector job growth of only 4.3 per business opportunities. “The government needs to do three of Engineers Canada cent). things,” says Donald Savoie, a Canada public safety and health, and to the highest standards On the revenue side of the ledger, Research Chair in Public Administration set by the profession. New Brunswick’s stagnating head Visit www.NewBrunswick.ca or contact our team directly and Governance at the Université de count has played havoc with the tax at 1 800-665-1800 to learn more. Moncton. “It needs to promote growth base: The province’s population and see greater revenues from this. That’s VISIT HIREAPENG.CA FOR MORE REASONS WHY HIRING A PROFESSIONAL ENGINEER PROVIDES AN EXCELLENT RETURN ON YOUR INVESTMENT. 36 | Atlantic Business Magazine | January/February 2011 38 | Atlantic Business Magazine | January/February 2011