The Maritime economy is in deep trouble, particularly in New Brunswick, because of its reliance on public sector jobs and the large number of people living in rural areas, says the chief executive officer of Corporate Research Associates.
Don Mills says the Maritimes have trailed the rest of the country in terms of economic growth for the past 20 years.
The unemployment rate in the region is consistently the highest, he said.
Meanwhile, the Maritimes are last for population growth, said Mills, who is based in Halifax.
"We’re not that attractive a place to live in terms of the economy that we have in this region," he said.
Mills said he believes one of the biggest contributing factors is the distribution of population across the region.
In the Maritime provinces, at least 45 per cent of the population lives in small communities of fewer than 5,000 people, he said. By comparison, only about 20 per cent of the rest of the population across Canada is considered rural, he said.
'Growth in the public sector has outpaced the growth in the private sector. And this is really bad news for the region because it's the private sector that actually creates wealth.' —Don Mills, Corporate Research Associates
It is more expensive to deliver government services, such as health care and roads, in rural regions, said Mills.
It's also more difficult to develop permanent, full-time jobs in many of the small communities, which is why so many people in the region are dependent on seasonal work, such as fisheries, he said.
The Maritimes are also too dependent on government funding and government jobs, said Mills.
In New Brunswick, for example, about 25 per cent of the population works for the public sector, compared to about 21 per cent for the national average, he said.
"The other thing that's disturbing, however, is that the growth in the public sector has outpaced the growth in the private sector. And this is really bad news for the region because it's the private sector that actually creates wealth and prosperity for the region," said Mills.
"It's the private sector that creates products and services for sale that allow our economies to grow."
Another problem in New Brunswick is the lack of development of natural resources, said Mills.
Growth in sectors, such as natural gas, must be environmentally-friendly, he said. But without them, there will be no economic progress, he stressed.
"We’ve got to find a way to grow our economies better than where we have been over the last 20 years or so," said Mills. "That is fundamental to the future of this region."