'Profit' is not a bad word

Just a quick reminder that ‘profit’ is not a bad word. In fact, it’s a pretty important word. If companies can’t make a competitive return on their investment in your jurisdiction, over time they will leave and new companies will not invest. This does not mean that all companies will be profitable - that goal is impossible and would be bad for the economy - you want companies with bad business models to fail and companies with good business models to succeed - but overall, if industries can’t make an ROI they will not invest.

The good news is that overall profitability is rising in New Brunswick -at least as measured by the taxes they pay. In 2023, corporations and government business enterprises in New Brunswick paid $816 million in taxes to GNB, according to Statistics Canada, up from $393 five years earlier. Relative to GDP, over the five year period 2019-2023 New Brunswick ranked 5th among the 10 province for profitability using the taxes to GDP proxy after ranking 8th in the previous five year period. Ontario and Quebec flip from 1 or 2 over the entire timeframe but I think that is partially because so many head offices are located in Ontario.

I don’t have great data on profitability by industry but we know the gross operating surplus by industry (profits before debt services, taxes, etc.) from Statistics Canada. That data is lagged (2021 is the most current) and not as flattering. Using gross operating surplus, New Brunswick ranked 10th among the provinces over the five years 2017-2021. Further, we ranked 9th in manufacturing gross operating surplus, 9th in tourism-related industries and 9th in the strategically important transportation sector.

I think it is important to have profitability as a goal of economic development in the province. When looking at energy costs, productivity, trade and a host of other factors - at the fore should be impact on profitability or ROI. Ultimately you want to be a place where entrepreneurs and businesses can make a decent return on invested capital.

That is no different than you wanting to make a decent return on your personal investments.

I think we should put profitability on the list of economic measures that matter to the province’s prosperity.