New Brunswick's back office sector: Fight like heck.
I read this morning that the long, drawn out closure of ExxonMobil’s business support services centre in Moncton will close soon. At its peak the firm employed at least 1,200 people in the province and had, by my estimate, at least a $70 million payroll. If you don’t combine all of Robert Irving’s different companies, for a while ExxonMobil was likely the largest private sector employer in the Moncton region.
I hope the people in charge fought hard to keep that company here. I hope the regional mayors, Premier and even Prime Minister went to Texas to make the case for New Brunswick. If the federal government can pay billions to keep an auto plant in southern Ontario, I hope at least a modest effort was made to keep Moncton’s largest private sector employer. I have a hunch the PM never even knew.
I’m a little extra annoyed as I was part of the team in the 1990s that worked to attract this company to the province. And has been said about many companies that have left the province in recent years, the company still has substantial back office operations around the world, just not anymore in New Brunswick.
Now we should turn out attention to how we retain and even grow what is left of the sector. The number employed in the sector has been declining for years. In 2004, 8.6% of all employment across Canada was in this sector. As of 2023, it was only 3.4%.
Shouldn’t we attempt to keep one of the largest export-focused contributors to New Brunswick’s GDP? Shouldn’t we try to figure out why we have lost more employment than any other province (% change) in the last 10 years -by a wide margin? To put this into perspective, New Brunswick has lost more jobs in this sector than there are total employed in NL, PE, NS and MB combined.
Back offices, as of 2023, contributed more the NB’s GDP than the entire tourism industry, the IT industry, and the petroleum refining sector. Worth fighting for?
There are very few industries in Canada, and none this large, where New Brunswick generates 2.7 times as much GDP as the next closest province. Worth fighting for?
And for those ignorant types, including certain university profs, who like to criticize the ‘sweat shops’, I suspect a lot of New Brunswickers would sweat for $52.66/hour (office administrative services) or $31,70/hour for business support services). Worth fighting for?
Finally, there are those that say this sector is doomed because of artificial intelligence. That may be so but even if that is correct (and I am not entirely convinced) shouldn’t New Brunswick be the place where firms build and test these new AI-enabled services?
Just for the record between 2020 and 2023, the number of jobs in this sector increased across Canada, PEI, NS, ON, AB and BC. Meanwhile, in New Brunswick the number of jobs declined by 29%.
Ontario added over 10,000 new jobs in this sector between 2020 and 2023.
The good news is that despite losing jobs, the GDP contribution has not dropped nearly as fast due to rising wages. Hopefully what’s left is la crème de la crème".
Want to talk value prop? New Brunswick is the most productive place in Canada by a wide margin to do this kind of work.
Is this industry worth fighting for?
I think so. If you don’t, what other sectors do you think can replace an industry that still contributes more to the GDP than the entire tourism industry (at much higher wages)?
Nice rant David… backed up with statistics. I like it! 😊
David, thank you for keeping your “It’s the Economy Stupid” torch burning over the past twenty or so years. As always, you covered the needless loss of another important NB business/sector so darn well, supported by facts and insights. Bravo! We can only hope someone can reignite the pride to be a New Brunswicker, before it’s too late.
I have come to understand that we, the majority of voters in this province, are very sadly to blame for our continued demise as a province. We get what we vote for!!
Our current crop of weak, naive, and inexperienced non-visionary leaders has no concept of pride, innovation, productive change, or effective growth. They know neither what these things mean nor how to make them happen in NB. A lot of tough questions need innovative answers, and only true leadership can stand against the craziness. How the hell did NB lose out on developing the second-largest tungsten mine in the world? How did BC get approval for developments in natural gas, while we are stuck in NB with a moratorium on the entire industry?
A deficiency in political leadership, combined with the persistent loss of control over large, innovative New Brunswick businesses, has led to the disappearance of head offices, either forced out, sold, or regulated away. Consequently, the province's business environment, along with its intellectual capital and key personnel, has significantly deteriorated. After twenty-five years, the economic landscape resembles the aftermath of the Chernobyl nuclear disaster.
New Brunswick lost the vision and the imperative to expand its economy. There is no standing still – you either grow forward or shrink into non-existence. Twenty-five years later, where the hell are today’s crop of truly visionary leaders like KC and other Irvings, Frank McKenna, Ken Cox, Leno Celeste, Gerry Pond, etc. Why has the innovation stopped?
The days you speak of in your ExxonMobil closure story (the 1990s) were a time of real growth and innovative change in NB. We had wise, strong leadership and partnerships between governments and businesses, and all the gains achieved in that era were by people who were actually enabled by the leaders and held accountable for real change and growth, to the benefit of New Brunswickers.
I can thankfully still remember the pride I felt as a New Brunswicker when:
… during the contact centre growth period in NB, a number of us “disciples of change” at NBTel would descend into Bell Canada territory in Quebec or Ontario and meet with their customers. Our peers at Bell actually came to fear our presence, claiming we were “stealing their customers” by encouraging them to outsource and relocate their operations, taking advantage of the many innovations and efficiencies their business could achieve in New Brunswick. As you know, many, many companies relocated significant operations to New Brunswick like ExxonMobil, FedEx, Purolator, and most of the Canadian banks, to mention only a small sample from the Contact Center glory days!!
…. and, in the early 90s, when a small group of us crept into the back of a large conference room of the Boston Convention Center. Southern New England Tel. (SNET) was hosting us, and someone was giving a presentation on… who knows what? It was the day before we were supposed to present about the quality improvement process that NBTel had led at one of our major national customers - DND base Gagetown. The conference host noticed us enter, and stopped what he was saying mid-sentence, to introduce our team like we were “celebrities from NBTel - the most innovative telco in Canada”, to the standing applause from the 400 attendees across the USA. Yep, that was a bit weird for us, but certainly appreciated!
… and, in Aug 2020, the pride felt by our small “skunkworks” team from NBTel, along with six other innovative e-learning sector partner companies from NB, when we announced winning the largest e-learning outsourcing contract in the world, at that time, worth $175M over 5 years. Until that day, our collective of players going after that contract, who didn’t even have a corporate name, finally came into existence as Innovatia Inc.
These may be gone forever, but I really hope and pray, the new Holt Liberal team (assuming she gets Frank McKenna’s backbone and guidance) and the soon-to-be Pierre Poilievre federal government can change the path of New Brunswick and partner with local businesses for growth. We need to change from being the Canadian “handout” province or the “senior care home” center of Canada, to something better. We need more of our young people to be proud to stay and come back here to work at meaningful, diverse jobs, building new homes, raising their families, and help grow our economy.
…. as you say David, simply “It’s The Economy, Stupid!
Thanks to you again David,
Brent Sansom,
A concerned, still proud, retired New Brunswicker & Canadian citizen