Richard Saillant – Telegraph-Journal – February 16, 2021

Made famous by one of history’s most successful advertising campaigns, the Energizer Bunny marches to the beat of its own drum and just keeps going and going and going.

 Last week, while listening to Premier Blaine Higgs’s State of the Province address, I realized that he offers us his own version of the Energizer Bunny. Ask him a question about almost any public policy topic, and he is more likely than not to go on and on and on about waste and inefficiency and how we need to do better with existing resources.

Premier Higgs is New Brunswick’s “Optimizer Bunny.”

In and of itself, Premier Higgs’s razor-sharp focus on optimization is laudable. Pushed too far, though, it can easily turn into a counterproductive obsession. As the leader of an organization with a $10-billion budget that plays a role in the lives of New Brunswickers from the cradle to the grave, Premier Higgs is expected to frame the big policy issues of the day in terms that go beyond just making sure things run as efficiently as possible. Not all public policy issues can be solved through process engineering alone.

 Take health care. Asked about how he would make good on his government’s commitment to cut the number of New Brunswickers without a primary care provider in half, Premier Higgs appeared caught off guard. He eventually sought refuge in familiar terrain, emphasizing the need to “manage the entire system for a service delivery model” and to get “more results from the money being spent.”

To be sure, cutting waste and improving efficiency in health care should be a priority. As an overarching vision for the future of the sector, however, it’s a little thin. And that’s perhaps the biggest downside to Premier Higgs’s single-minded obsession with waste and inefficiency: by defining almost every public policy issue as a problem that needs to be optimized, Higgs often misses the forest for the trees.

It’s worth recalling that the provincial government has spent the last decade making its health-care system more “efficient.” If we adjust for general inflation and population aging, New Brunswick now spends considerably less on health care than it did 10 years ago. In fact, New Brunswick has brought down spending growth to such an extent that Health Minister Dorothy Shepherd was right to claim in her recent consultation document on health-care reform that “New Brunswick has, arguably, the most cost-efficient health-care system in the country.”

To her credit, Minister Shepherd recognizes – implicitly at least – that “efficiency” and “effectiveness” are not synonymous. That’s clearly visible when she notes that in New Brunswick, only 47 per cent of hip or knee replacement surgeries are performed within the national benchmark of six months since referral, compared to 72 per cent of Canadians. She could have added that, as New Brunswick’s health-care system became more “efficient” over the last decade, it also saw the second worst deterioration in wait times among all provinces.

During the question-and-answer after last week’s address, Premier Higgs was asked about “smart” investments that could help relaunch the economy. Tellingly, he did not come up with a single investment opportunity – this at a time when policy-makers around the world are talking about the need to invest to avoid “economic scarring” and up to one in five New Brunswick businesses is thinking about pulling the plug. Rather, he reminded New Brunswickers that we need to “change the philosophy that if we put money into something, it’s going to get better.” 

As a slogan, this is a fine line that plays well with those who espouse a small government philosophy. As a mantra for governing an entire province, it’s not only disconcerting: it’s also plainly false. 

To be sure, few public policy issues can be addressed just by spending more. That said, sometimes money is a vital part of the answer. 

Take the above example of hip and knee replacement wait times. The biggest obstacle to improvement in this area is a lack of hospital beds. In turn, this situation is inextricably tied to the fact that too many people are languishing in hospitals, waiting to be transferred to a long-term care facility. And, as we all know, a chronic shortage of staff is one of the main obstacles to expanding New Brunswick’s nursing home system. 

Premier Higgs has said in the past that low wages are not the main reason for staffing shortages in nursing homes. Higher wages may not be the panacea for all labour shortages, but in the case of nursing home workers wages are critical. Better pay will attract more workers. In turn, having more workers will improve working conditions, lower the pressure on existing staff and reduce turnover. Unlike in other professions that require more training, such as nurses and doctors, there are people available locally to take those jobs, if only they were more attractive.

 Ironically for Premier Higgs, if his government is successful in reducing wait times, the very outcome will be to spend more money, and not just on nursing homes. Wait times are a form of rationing. To shorten hip and knee replacement wait lists, surgeons and their teams must perform many more procedures, and their services don’t exactly come cheap.

A few years ago, the auditor general noted that unless we move to a different model of elderly care – which would inevitably require further investment – New Brunswick would likely need to more than double its number of nursing home beds over the next 15 years. How can we ever hope to meet this exploding demand for elder care without spending more and without training and hiring more people?

In his address, Higgs also announced a 90-day review of the rental housing market in New Brunswick. This may just be a tactic to justify inaction while the pandemic rages on. The fact that it will be conducted internally by Service NB – which spent months publicly denying the existence of a problem – is certainly not encouraging.

 Let’s assume – a big assumption – the review will be conducted objectively and competently. It may well come to the conclusion that escalating rents for lower-priced units are tied to the fact that, without financial assistance, developers lack the necessary incentives to respond effectively to rapidly-growing demand for such units.

If this is shown to be true, Premier Higgs will be faced with a dilemma. He may opt to leave the market to its own devices, in which case rents for lower-priced units will likely continue to escalate. The losers in this situation will be low-income households and the province’s economy through lower immigration flows. Lower rents offset the fact that private sector wages in New Brunswick are lower than in much of the rest of Canada. If rents catch up with the national average, New Brunswick’s cost of living advantage will be diminished.

Alternatively, Premier Higgs may choose to make a “smart” investment in keeping housing affordable by incentivizing the construction of low to moderately-priced units. This investment would also need to provide relief to low-income households facing escalating rents so as to help preserve social cohesion and openness to immigration.

At the risk of sounding like a broken record, sometimes one needs to spend money to make money. Not every public policy issue marches to the drum of the Optimizer Bunny alone.

Richard Saillant is an economist, public policy consultant and a Brunswick News columnist.