November 2023

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CENTRE FOR
THE STUDY
OF LIVING
STANDARDSThe Deteriorating Investment
Performance of New Brunswick: The
Achilles Heel of the Economy

Leonel Ordoñez

November 2023

CSLS Research Report 2023-09

The Deteriorating Investment
Performance in New Brunswick: The
Achilles Heel of the Economy
Table of Contents
List of Exhibits................................................................................................................................ 1
List of Charts................................................................................................................................... 1
List of Tables .................................................................................................................................. 3
List of Appendix Charts .................................................................................................................. 3
Abstract ........................................................................................................................................... 4
Executive Summary ........................................................................................................................ 5
Introduction ..................................................................................................................................... 9Part One: An Overview of Investment Developments in New Brunswick, 1961-2021 ............... 11
A. (Section 1): Total Investment (Business and Government), 1961-2021............................ 13i.

Investment as a Share of Nominal GDP......................................................................... 13

ii. Investment Growth ......................................................................................................... 23iii.

Net Investment ............................................................................................................ 25

B. (Section 2): Residential Business Investment, 2000-2021 ................................................ 28i.

Residential Business Investment Growth ....................................................................... 28

ii. Residential Business Investment as a Share of Nominal GDP ...................................... 30
iii.

Residential Business Net Investment ......................................................................... 30

C. (Section 3): Non-Residential Business Investment (Structures, M&E), 2000-2021 ......... 33i.

Non-Residential Business Investment Growth .............................................................. 33

ii. Non-Residential Business Investment as a Share of Nominal GDP .............................. 35
iii.

Non-Residential Business Net Investment ................................................................. 35

D. Non-Residential Business Investment in Structures (non-residential buildings andengineering construction), 2000-2021....................................................................................... 38i.

Non-Residential Business Investment in Structure Growth ........................................... 38

ii. Non-Residential Business Investment in Structures as a Share of Nominal GDP ......... 39iii.

Non-Residential Business Net Investment in Structures ............................................ 40

E. Non-Residential Business Investment in M&E, 2000-2021 .............................................. 41i.

Non-Residential Business Investment in M&E Growth ................................................ 41

ii. Non-Residential Business Investment in M&E as a Share of Nominal GDP ................ 41iii.

Non-Residential Business Net Investment in M&E ................................................... 42

a. A Closer Look at Investment by Industry ...................................................................... 43
iv.

Non-Residential Business Investment (Structure and M&E): Industries ................... 43

v. Non-Residential Business Investment in Structures: Industries .................................... 46vi.
F.

Non-Residential Business Investment in M&E: Industries ........................................ 47(Section 4): Government Non-Residential Investment (Structures, M&E), 2000-2021 ... 48
i.

Government Non-Residential Investment Growth ......................................................... 49

ii. Non-Residential Government Investment as a Share of Nominal GDP ........................ 50
iii.

Non-Residential Government Net Investment ........................................................... 51

G. Non-Residential Government Investment in Structures (non-residential buildings andengineering construction), 2000-2021....................................................................................... 52i.

Non-Residential Government Investment in Structures Growth ................................... 52

ii. Non-Residential Government Investment in Structure as a Share of Nominal GDP..... 52iii.

Non-Residential Government Net Investment in Structures ...................................... 53

H. Non-Residential Government Investment in M&E, 2000-2021 ........................................ 54i.

Non-Residential Government Investment in M&E ........................................................ 54

ii. Non-Residential Government Investment in M&E as a Share of Nominal GDP .......... 55
iii.

Non-Residential Government Net Investment in M&E ............................................. 56

Part Two: The Nexus of Policies and Programs: Shaping Investment in New Brunswick .......... 57
A. Tax Incentives .................................................................................................................... 57
B. Investment Promotion Agencies ........................................................................................ 63
C. Business Support Services ................................................................................................. 64
D. Financial Assistance........................................................................................................... 65
E. Infrastructure ...................................................................................................................... 70
F.

Business Regulations ......................................................................................................... 72

Part Three: Summary and Conclusion .......................................................................................... 74
A. Trends of Investment ......................................................................................................... 74
B. Policies and Programs Directly Impacting New Brunswick’s Investment Development . 75

C. Conclusion ......................................................................................................................... 78
References ..................................................................................................................................... 80
Appendix ....................................................................................................................................... 85

List of Exhibits
Exhibit 1: Investment Development in New Brunswick, by Type of Investment as a Share of
Nominal GDP (current prices) and Sector (Business or Government) in 2021 ............................ 12

List of Charts
Chart 1: Percentage Point Difference between New Brunswick’s and Canada’s Total Investment(current prices) as Share of Nominal GDP, 1961-2021 ................................................................ 14
Chart 2: Percentage Point Difference between New Brunswick’s and Canada’s Non-Residential
Government Investment (current prices) as Share of Nominal GDP, 1961-2021 ........................ 17
Chart 3: Percentage Point Difference between New Brunswick’s and Canada’s Residential
Business Investment (current prices) as Share of Nominal GDP, 1961-2021 .............................. 18
Chart 4: Percentage Point Difference between New Brunswick’s and Canada’s Non-Residential
Business Investment (Structure and M&E (current prices)) as Share of Nominal GDP, 1961-2021....................................................................................................................................................... 19
Chart 5: Percentage Point Difference between New Brunswick’s and Canada’s Non-Residential
Business Investment in Structures (current prices) as Share of Nominal GDP, 1961-2021......... 20
Chart 6: Percentage Point Difference between New Brunswick’s and Canada’s Non-Residential
Business Investment in M&E (current prices) as Share of Nominal GDP, 1961-2021 ................ 21
Chart 7: Total Investment (current prices) as Share of Nominal GDP, Canada, and Provinces,
1961, 2000 and 2021 ..................................................................................................................... 23
Chart 8: New Brunswick’s Gross Investment and Net Investment as Share of Nominal GDP,
(current prices), 1961-2021 ........................................................................................................... 27
Chart 9: New Brunswick’s Net Investment-to-Gross Investment Ratio, (current prices), 19612021............................................................................................................................................... 27
Chart 10: Growth and Trends of Business Residential Investment in Canada and New
Brunswick, 2000-2021 .................................................................................................................. 28
Chart 11: Residential Business Investment as a Share of Nominal GDP (current prices), Canada
and New Brunswick, 2000-2021................................................................................................... 30
Chart 12: Residential Business Net Investment, Canada and New Brunswick, 2000-2021 ......... 31
Chart 13: Growth and Trends of Business Non-Residential Investment in Canada and New
Brunswick, (2012 chained dollars), 2000-2021 ............................................................................ 34
Chart 14: Non-Residential Business Investment as a Share of Nominal GDP, Canada and New
Brunswick, (current prices), 2000-2021 ....................................................................................... 35
Chart 15: Growth and Trends of Business Non-Residential Net Investment in Canada and New
Brunswick, (2012 chained dollars), 2000-2021 ............................................................................ 36
Chart 16: Business Non-Residential Net Investment and Investment in New Brunswick, 20002021............................................................................................................................................... 37

1

Chart 17: Non-Residential Business Investment in Structure per capita: New Brunswick as aproportion of Canada (%), (current prices) ................................................................................... 39
Chart 18: Non-Residential Business Investment in Structure Growth (chained dollars), Canada
and New Brunswick, 2000-2021................................................................................................... 39
Chart 19: Non-Residential Business Investment in Structure as Share of Nominal GDP, Canada
and New Brunswick, 2000-2021................................................................................................... 40
Chart 20: Non-Residential Business Investment in M&E Growth (Compound Annual Rate)(chained dollars), Canada and New Brunswick, 2000-2021......................................................... 41
Chart 21: Non-Residential Business Investment in M&E as a Share of Nominal GDP in Canada
and New Brunswick, 2000-2021................................................................................................... 42
Chart 22: Business Non-Residential Investment in Structures in New Brunswick, by SelectIndustry, (2012 constant dollars per capita), 2000-2021 .............................................................. 47
Chart 23: Business Non-Residential Investment in M&E in New Brunswick, by Select Industry,(2012 constant dollars per capita), 2000-2021 .............................................................................. 48
Chart 24: Growth and Trends of Non-Residential Government Investment (chained dollars) in
Canada and New Brunswick, 2000-2021...................................................................................... 49
Chart 25: Non-Residential Government Investment as a Share of Nominal GDP, Canada and
New Brunswick, (current prices), 2000-2021 ............................................................................... 50
Chart 26: Non-Residential Government Net Investment per capita in Canada and New
Brunswick, (chained dollars), 2000-2021 ..................................................................................... 51
Chart 27: Non-Residential Government Investment in Structures Growth, Canada and New
Brunswick, (chained dollars), 2000-2021 ..................................................................................... 52
Chart 28: Government Non-Residential Investment in Structures as a share of Nominal GDP,
Canada and New Brunswick, (current prices), 2000-2021 ........................................................... 53
Chart 29: Non-Residential Government Net Investment in Structures, Canada and New
Brunswick, (chained dollars), 2000-2021 ..................................................................................... 54
Chart 30: Non-Residential Government Investment in M&E, Canada and New Brunswick,(chained dollars), 2000-2021 ........................................................................................................ 55
Chart 31: Non-Residential Government Investment in M&E as a Share of Nominal GDP, Canada
and New Brunswick, (current prices), 2000-2021 ........................................................................ 56
Chart 32: Non-Residential Government Net Investment in M&E, Canada and New Brunswick,(chained dollars), 2000-2021 ........................................................................................................ 56
Chart 33: Corporate Income Tax Rate for Active and Small Businesses, 1961-2019 .................. 58
Chart 34: Interest Rates in Canada (Overnight Rate), 1990-2022 ................................................ 60
Chart 35: Finanicals Between 2017-18 and 2021-22 (in millions $) in Canada ........................... 67
Chart 36: Most Active Venture Capital Firms and Funds ............................................................ 69

2

List of Tables
Table 1: Total Investment and Investment Components as a Share of Nominal GDP in New
Brunswick, (current prices), 1961, 1985, 2009 and 2021 ............................................................. 15
Table 2: Total Investment and Investment Components as a Share of Nominal GDP in New
Brunswick, (current prices), 1961-1985 and 2010-2021 .............................................................. 22
Table 3: Total Investment Growth in New Brunswick and in Canada (Compound Annual GrowthRate), (chained dollars), 1961-2021.............................................................................................. 24
Table 4: Total Investment and Investment Components in New Brunswick, (2012 chained
dollars), 1961, 2000, 2015 and 2021............................................................................................... 1
Table 5: Compound Annual Growth Rate of Total Investment and Investment Components in
New Brunswick, (2012 chained dollars), 1961-2021 ................................................................... 25
Table 6: Comparison of New Brunswick’s Total Investment and Depreciation Growth Rate
(Compound Annual Growth Rate), (chained dollars), 1961-2021 ............................................... 26
Table 7: Non-Residential Business Investment by Industry in New Brunswick, (chained dollars),
1961-2021 ....................................................................................................................................... 1
Table 8: Non-Residential Business Investment Growth in NB, (chained dollars), 1961-2021 .... 45
Table 9: Reduced Tax Rates for Zero-Emission Technology ....................................................... 61
Table 10: Finanicals Between 2012-13 and 2015-16 (in millions $) in Canada .......................... 66
Table 11: Most Active Government Funded Venture Capital in Canada ..................................... 69

List of Appendix Charts
Appendix Chart 1: Total Investment Growth (Compound Annual Growth Rate), (chained
dollars), Canada and Provinces, 1961-2021 ................................................................................. 85
Appendix Chart 2: Total Investment spending per capita (2012 chained dollars) in Canada, New
Brunswick, and Provinces, (2000, 2008, 2015 and 2021) ............................................................ 88
Appendix Chart 3: New Brunswick’s Business Non-Residential Investment and Depreciation(chained dollars), 2000-2021 ........................................................................................................ 90
Appendix Chart 4: Business Spending in Structure Assets in the Information and Cultural
Industry, (constant 2012 Dollars per capita), 2000-2021 ............................................................. 91
Appendix Chart 5: Non-Residential Business Investment in M&E: Trends of Industries with
Upward Sloping Investment, (constant 2012 Dollars per capita), 2000-2021 .............................. 91

3

The Deteriorating Investment
Performance of New Brunswick: The
Achilles Heel of the Economy
Abstract
This report provides a throughout analysis of investment trends in New Brunswick overthe past six decades. Based on New Brunswick's investment growth, the share of investment in
GDP and net investment, the overall picture suggests that the province's investment has
weakened. Particularly since 2008, the province experienced a substantial fall in its grossinvestment which slightly picked up after 2015. The main driver of this development was nonresidential business investment in structural assets. This type of investment witnessed a sharp fall
after the 2008-2009 economic crisis, and it was produced by the investment fall in the utility
industry. In addition, although to a lesser extend, non-residential business investment inmachinery and equipment (M&E) contributed to the overall investment fall. From 2000 to 2021,
investment in M&E did not grow and its share of GDP experienced a steep downward trend.

4

The Deteriorating Investment
Performance of New Brunswick: The
Achilles Heel of the Economy
Executive Summary
Investment is a key pillar of use for an economy: it serves as a catalyst for economic
growth, job creation, technological advancement, and infrastructure development. It contributes
to a sustainable and vibrant economy that can provide opportunities and improve the well-beingof citizens. For the past twenty-one years, New Brunswick has experienced a fall in its share ofinvestment, leaving uncertainty about the province's economy and the opportunity to meet goalsof diversification and development. Therefore, this report aims to provide a thorough analysis of
New Brunswick’s investment compared to that of Canada as a whole. By presenting a detailed
picture of New Brunswick’s government and business investment, this report sheds light on
fundamental factors that have prevented the province from having a better investment
performance.
The report is organized into three major parts. The first part provides a detailed overview
of New Brunswick's investment compared to Canada from 1961 to 2021, with a major focus on
recent developments (from 2000 to 2021). Part two examines New Brunswick's policies andprograms in recent years and how those have affected investment in the region. Lastly, based on
the analysis of the first two sections, part three provides a conclusion and a set of key factors toconsider for improving investment performance in New Brunswick.
In part one, the overall trends of total investment are examined from 1961 to 2021 in
Canada, New Brunswick, and the rest of the provinces. The analysis reveals that total investment
as a share of nominal GDP fell to 16.6 per cent in 2021, a fall-off of 2.4 points since 2000 and
5.5 points since 1961, shedding light on the province's weak investment performance. From
2000-2021, New Brunswick's total real investment grew at 0.76 per cent per year, the lowest
growth rate among all provinces and 1.81 percentage points below the Canadian rate.
Consequently, this led to a reduction in the level of net investment and a fall in the net
investment-to-investment ratio since 1961. The average share of net investment in GDP was 3.34
per cent between 2000 and 2021. By 2021, the net investment-to-investment ratio plummeted to
13 per cent, substantially lower than the share in 1961 of 27 per cent.
The report explains in detail how such poor investment performance in New Brunswick
has developed and what has been the cause of it in recent years (2000-2021). The analysis is5disaggregated by types of investment conducted by the government and business sectors during
the last sixty years. Key findings of our analysis of New Brunswick's business and government
investment include the following:
•

•

•

•

•

•

Over the last 60 years the total investment share of nominal GDP in New Brunswick
has fallen precipitously. After averaging a very strong 27.6 per cent of GDP in 19611985, the share fell 10.8 points to 16.8 per cent 2009-2021. At the national level thefall was only 1.1 points from 21.6 per cent to 20.5 per cent. After averaging 127 percent of the national average in 1961-1985, New Brunswick’s investment share fell to
82 per cent in 2009-2019. This stark contrast in investment trends is likely the mostimportant structural difference between the performance of the two economies overthe last six decades, driving output and productivity outcomes.
Business residential investment made no contribution to the fall-off in investment in
New Brunswick as its investment share was virtually unchanged between 1961-1985
and 2009-2021 at 5.9 per cent and 5.7 per cent respectively. However, since theresidential investment share increased at the national level (5.2 per cent to 7.6 percent), New Brunswick’s relative performance for this type of investment fell from112 per cent of the national average to 76 per cent.
Albeit still behind the national level, real residential business investment fared
relatively well in New Brunswick, growing at 3.32 per cent per year between 2000
and 2021. The 2008-2009 economic crisis slowed residential investment; however, it
did not cause any substantial drop.
The story for non-residential business investment was the opposite of the residential
one. After the 2008-2009 economic crisis, New Brunswick suffered a sharp decline in
its investment, growing at a negative 7.4 per cent per year from 2008-2015; it thenincreased slightly from 2015 to 2021. Between 2000-2021, the province had no
growth in its non-residential business investment.
About three quarters of the fall-off in the investment share in New Brunswick
between 1961-1985 and 2009-2021 is accounted for by business non-residential
investment, which fell 8.1 points from 15.4 per cent to 7.3 per cent. This was a muchgreater fall than for Canada where the share fell only 2.8 points from 12.7 per cent to
9.9 per cent. After achieving 120 per cent of the national share of non-residential
business investment in 1961-1985, New Brunswick’s share for this importantinvestment category fell to 76 per cent in 2009-2021.
Non-residential business investment is composed of both investment in structures andin machinery and equipment. Both components contributed significantly to the total
investment fall-off in New Brunswick between 1961-1985 and 2009-2021. The shareof machinery and equipment investment in GDP fell 4.6 points from 8.8 per cent to
4.1 per cent, compared to 2.9 points fall from 6.6 per cent to 3.7 per cent in Canada.
The considerable decline at the national level meant that New Brunswick’s relative
performance only fell from 132 per cent of the national average to 110 per cent. In
6

•

•

•

•

•

absolute terms, the province does not have a shortfall in machinery and equipment
relative to the national average.
Although structures investment as a share of GDP fell less than machinery andequipment in New Brunswick between 1961-1985 and 2009-2019, the relative
performance of this type of investment appears worse. This is because structures did
not fall at the national level (6.2 per cent in both 1961-1985 and 2009-2021). This
resulted in New Brunswick’s investment share in structures falling from 107 per centof the national average to 52 per cent between periods. The largest investment
shortfall between New Brunswick and Canada is thus for business structures.
The reason behind the significant drop in non-residential investment between 2008
and 2015 was due to the sharp decline in structural assets investment. In effect, thegrowth rate for investment in structure fell significantly to a negative 13 per cent per
year between 2008 and 2015, worse than the negative growth rate of M&E assets of
1.6 percent.
At a closer look, the industries that were responsible for the fall of business
investment for non-residential assets were the utility and manufacturing industries.
More specifically, these industries have been among the top five most important ones
for investment in New Brunswick. The sharp decline of investment in the utility
industry between 2008 and 2015, significantly affected investment in structure assets.
On the other hand, similarly, investment in the manufacturing industry did not grow.
Hence, this affected the development of investment in M&E assets and contributed tothe overall fall in New Brunswick’s gross investment.
About one quarter (2.4 points) of the 11 percentage points fall-off in the investment
share in New Brunswick between 1961-1985 and 2009-2021 was due to the decline in
the government non-residential investment share from 6.3 per cent to 3.9 per cent.
This share fell less at the national level (0.8 points from 3.7 per cent to 2.9 per cent).
The absolute size of the share was greater in New Brunswick in both periods,
suggesting that there is no government underinvestment in the province relative to thenational average.
Unlike business non-residential investment, the public sector has taken a more
important role for the past twenty-one years. In effect, the proportion of New
Brunswick’s total non-residential investment that is allocated to public nonresidential investment (structure, machinery, and equipment) increased by 11.8
percentage points between 2000 and 2021 (22 per cent vs 34 per cent), whereas theshare of business-on-residential investment fell by 12 percentage points (78 per centvs 66 per cent).

In part two, the report provides a detail evaluation of the different direct policies andprograms that have been implemented in Canada and in New Brunswick over time. It provides
an overview of direct policies and programs such as tax incentives, investment promotion

7

agencies, business support services, financial assistance, infrastructure development, andbusiness regulatory environment. The following are key summarize findings:
•
•
•

•

•

•

•

Over time, corporate tax rates (provincial and federal) have fallen and haveparticularly been benefiting small businesses.
The federal government offers investment tax credits such as the Atlantic Investment
Tax Credit to support and incentivize investment in the region.
New Brunswick’s investment has had an inverse correlation with the Canadianinterest rate. More specifically, during periods of high-interest rates, the province
witnessed an upward trend in its investment, whereas, during periods of low interest
rates, the province's investment substantially dropped.
Nowadays, businesses in New Brunswick have access to three investment promotion
agencies. These are Opportunities NB, Atlantic Canada Opportunities Agency, andInvest in Canada. This has contributed to the growth of businesses and investment inrecent years.
With the collaboration between private and public sectors, several centres andprograms have been created to provide business mentorship or training toentrepreneurs or small businesses. Some of these centres and programs include Planet
Hatch, Ignite Fredericton, Oasis Mentorship, and the Community Business
Development Corporation.
Over the years, the New Brunswick government has provided significant financial
assistance for investment. According to the Canadian Venture Capital Association in
2021, among the Atlantic provinces, New Brunswick was the most active province inventure capital investment with $126 million and 14 deals.
Although numerous projects for infrastructure have been implemented in New
Brunswick, the province keeps falling in the implementation of its investment sincesome programs have not achieved their goals due to poor funding management.

Based on investment trends and the evaluation of policies and programs implemented
over the years in New Brunswick, part three summarizes and concludes the analysis by providing
key factors that should be considered to improve investment performance in the provinces.

8

The Deteriorating Investment
Performance of New Brunswick: The
Achilles Tendon of the Economy
Introduction1
This report aims to explain New Brunswick’s investment developments, particularly
since 2000 relative to Canada and other provinces. By painting a detailed picture of New
Brunswick's investment trends, this report sheds light on fundamental aspects such as investment
growth, investment share of GDP, and net investment levels. Investment is a fundamental
component of GDP that can increase production and productivity and, thus, lead to short andlong-run economic growth. Consequently, given the many important effects that investment has
on an economy, having a comprehensive understanding of investment is of vital importance.
This report consists of three parts. The first part examines investment developments inthe province, including trends in both residential and non-residential investment (for structuresand machinery and equipment) conducted by the business and government sectors in bothnominal and real terms. A comparison is made to the national average and other provinces. The
second part reviews and evaluates policies and programs affecting investment in New
Brunswick, at both the federal and provincial levels, including investment subsidies andincentives. Ultimately, based on the evidence provided in the first two parts of the report, thethird part summarizes and provides key factors to consider for the improvement of investment
performance in New Brunswick.
The examination of investment developments in part one has four sections. Section one,
provides an overview of government and business investment, analyzing the fundamental aspects
of investment growth, the share of investment in GDP and net investment between 1961 and2021. Section two then discusses developments of residential business investment with a focus
on recent years between 2000 and 2021. Next, Section three discusses trends in non-residential
business investment (structure and M&E) between 2000 and 2021, covering the development ofeach subcomponent separately.2 Ultimately, section four looks at non-residential government
investment development between 2000 and 2021, and similarly to the previous section, it
discusses the development of each subcomponent separately.

1

This report was written by CSLS economist Leonel Ordonez under the supervision of Andrew Sharpe, Executive
Director. The database for the report is posted with the report at http://www.csls.ca/reports/csls2023-09-data.xlsx.
2
Throughout this report, we refer to Machinery and Equipment assets by their short terminology “M&E”.

9

Part two of the report examines federal and provincial policies and programs that haveaffected New Brunswick’s investment development for the past six decades. It particularly
focuses on reviewing policies and programs with a direct effect on investment such as tax
incentives, investment promotion agencies, business support services, financial assistance,
infrastructural development, and business regulatory environment.
Finally, part three of the report analyzes outcomes from parts one and two of the report,
providing a summary of the findings and a conclusion regarding the investment situation in New
Brunswick

10

Part One: An Overview of Investment Developments in New Brunswick, 19612021
This report overviews trends in investment in New Brunswick compared to otherprovinces and Canada as a whole. Investment is an important contributor to GDP, playing a vitalrole in economic growth. In particular, the greater the flows of new investment there are, thehigher the capital stock level will be. Since capital is a key input into production, productivity
and output are expected to rise. Likewise, investment can produce a multiplier effect which canhelp change the economic trend, causing a short-term and long-term boost in an economy. On
the other hand, New Brunswick's economic engine is based on its manufacturing exports whichhave faced challenges in recent years to develop and maintain a strong base. Therefore, if theprovince wants to maintain competitiveness, investing in new machinery, equipment, andbuildings will be necessary. Given all the latter, it is relevant to understand the developments ofinvestment in New Brunswick’s economy.
This section provides a comprehensive analysis of fixed capital formation (investment),
including developments in total investment, business non-residential and residential investment,
and government non-residential investment. Notice that this report does not provide a detailed
analysis of the trends of residential government investment since Statistics Canada only provides
non-disaggregated data on residential investment for all business, government, and non-profit
institutions. Exhibit 1 shows the breakdown of total investment by type of investment and sector.
Each box contains the proportion of GDP going towards the kind of investment in 2021, withbusiness investment making up a more significant share than government investment (12.6 percent vs 3.9 per cent). In addition, given that there will always be some degree of expenditure by
the government on residential assets, based on the difference between non-residential
government investment and total government investment, the calculated residual for New
Brunswick's government residential investment (nominal value) in 2021 was $369 million, ashare of 0.8 per cent of nominal GDP.3
Total investment developments in New Brunswick are examined thoroughly from 1961
to 2021, whereas for the different components of total investment, the analysis focuses on recent
developments (i.e., from 2000 to 2021). To avoid confusion, throughout the report, whenreferring to investment growth, real investment is used. On the other hand, when referring to theshare of investment, nominal investment is used to incorporate changes in relative prices. Lastly,in this report, the term “investment” will refer to gross investment and only when not referring togross investment, then we refer to investment as a net investment.

3

The sources used to calculate government residential investment in New Brunswick in 2021 come from Statistics
Canada, Table 36-10-0222-01, and Table 36-10-0098-01. The residual is calculated subtracting the non-residential
government investment from the gross government (investment).

11

Drawing on Statistics Canada data from the flows and stocks of fixed residential and nonresidential capital by asset type, as found in Table 36-10-0099-01 and Table 36-10-0098-01, thissection finds that New Brunswick’s total investment has performed poorly relative to Canada
and other provinces. The overall growth for the 2000-2021 period was the lowest among all
provinces and by 2021, New Brunswick’s total investment per capita was ranked last. The
proportion of GDP going towards total investment fell substantially since 1961. Using the samedata from Statistics Canada, it was possible to identify that New Brunswick's non-residential
government investment increased its share of total non-residential investment from 2000 to 2021.
In contrast, the share of non-residential business investment fell significantly, suggesting that
more non-residential investment has been allocated from government than from business in thepast twenty-one years.
Exhibit 1: Investment Development in New Brunswick, by Type of Investment as a Share of
Nominal GDP (current prices) and Sector (Business or Government) in 2021

Total Investment(16.5 %)

Government(3.9%)

NonResidential(3.1%)

Residential(0.8%)

Non-

Business(12.6%)

Residential(6.6%)

NonResidential(6.0 %)

Structures(2.6 %)

Machinery andEquipment(0.5%)

Structures(3.1 %)

Machinery andEquipment(2.9 %)

Industry
TrendsIndustry
TrendsIndustry
TrendsIndustry
Trends12

A.

(Section 1): Total Investment (Business and Government), 1961-2021

i.

Investment as a Share of Nominal GDP

In 1961, investment from businesses and government in New Brunswick was $177
million, 22.1 per cent of nominal GDP and 0.8 percentage points above the national rate. As
shown in Panel A of Chart 1, between 1961 and 1985, the share of New Brunswick's investment
in GDP hovered between a range of 0.63 and 15.25 percentage points above that of Canada,reaching an all-time high of 38.8 per cent in 1975.4 During this same period, New Brunswick's
average share was 27.6 per cent, 6.3 points above the Canadian average share of 21.3 per cent.
However, after 1985, the percentage points difference between New Brunswick andCanada shares gradually disappeared, resulting in an opposite outcome than that of the firsttwenty-four years. From 1986 to 2009, New Brunswick's average share dropped to 17.9 per cent,
0.3 points below the national average share of 18.2 per cent. This downward trend in the sharecontinued between 2010 and 2021 where the average share hovered 3.7 points below the
Canadian share (16.8 per cent vs 20.5 per cent).
Panel B from Chart 1 presents the share of New Brunswick investment from nominal
GDP as a proportion of Canada. Unsurprisingly, the relative share has also fallen considerably
over time, from 126.9 per cent of the national average in 1961-1985 to 98.2 per cent in 19862009 to 82.3 per cent in 2010-2021, an overall substantial fall of 45 percentage points.
To assess the absolute performance of the investment, Table 1 presents New Brunswick's
investment trends between 1961 and 2021, with three periods (i.e., 1961-1985, 1985-2009, and2009-2021) and by investment component. From 1961 to 2021, New Brunswick’s investment
share from nominal GDP fell by 5.6 percentage points with the largest fall during 2009-2021 by
3.6 points and lower drops during 1961-1985 by 1.7 points and 1985-2009 by 0.3 points. Muchof the decline since 1961 in gross investment was driven by the substantial reductions in nonresidential business investment. In 1961, non-residential business investment was 10.8 per centof GDP, falling to 6.0 percent in 2021; a substantial fall of 4.8 percentage points. Thisdevelopment was influenced by the investment progress in each non-residential business
investment subcomponent. As shown in Table 1, business investment in structure, machinery andequipment assets fell between 1961 and 2021, with both types of investment by around 2
percentage points and with larger drops during 2009-2021. On the other hand, a similar situation
occurred in non-residential government investment which fell by 3.6 points between 1961 and2021; contributing to the overall fall of the percentage of GDP going towards investment in New
Brunswick.
4

Panel A in Chart 1 presents the trends of investment shares from New Brunswick and Canada together withup/down bars highlighting the existent point difference. Similar Panels are provided in Chart 2 to 6 in this report,
highlighting the point difference with up/down bars.

13Chart 1: Percentage Point Difference between New Brunswick’s and Canada’s Total
Investment (current prices) as Share of Nominal GDP, 1961-2021
Panel A: Percentage Point Difference (Up/Down Bars)
45
45

Per Cent
Per Cent

40
40
35
35
30

Average Share
2010-2021:- (NB) 16.8%- (CAD) 20.5%

22.10

30
25

21.02

22.10

20
25

21.02

15
20
10

21.30

Average Share 1986-2009:- (NB) 17.9%- (CAD) 18.2%

Average Share 1961-1985:
21.30- (NB) 27.6%- (CAD) 21.6%
Average Share 1961-1985:- (NB) 27.6%- (CAD) 21.6%

15
5
10
0
5
0

16.58

16.58

Average Share 1986-2009:- (NB) 17.9%- (CAD) 18.2%

New Brunswick's Investment as share of nominal GDP

Canada's Investment as share of nominal GDP

New Brunswick's Investment as share of nominal GDP

Canada's Investment as share of nominal GDP

Panel B: New Brunswick as a Proportion of Canada
180
160

Per Cent

140
120
100
80
60
40
20

Average Share 1961-1985:
126.9 %

Average Share 1986-2009:
98.2%

0

Average Share
2010-2021:
82.3%

New Brunswick as a Share of Canada

Sources: Statistics Canada, Table 36-10-0325-01; Table 36-10-0222-01; Table 36-10-0099-01 and Table 36-100098-01

14

Table 1: Total Investment and Investment Components as a Share of Nominal GDP in New
Brunswick, (current prices), 1961, 1985, 2009 and 2021
Share
in
1961

Share Shareinin1985 2009

Share Percentage Percentage Percentage Percentage
in
PointsPointsPointsPoints2021 1961-1985 1985-2009 2009-2021 1961-2021

22.1

20.4

20.1

16.5

-1.7

-0.3

-3.6

-5.6

6.7

4.7

3.6

3.1

-2.0

-1.1

-0.5

-3.6

Gross Business
Investment

15.2

15.6

16.5

13.4

0.4

0.9

-3.1

-1.8

Residential
Investment

4.3

5.5

6.2

7.4

1.2

0.7

1.2

3.1

10.8

10

10.3

6.0

-0.8

0.3

-4.3

-4.8

Spending in
Structures

5.2

3.4

5.2

3.1

-1.8

1.8

-2.1

-2.1

Spending in
M&E

5.6

6.5

5.1

2.9

0.9

-1.4

-2.2

-2.7

Total
Investment(Government
and Business)
NonResidential
Government
Investment(Structure,
M&E)

NonResidential
Investment

Sources: Statistics Canada, Table 36-10-0099-01, and Table 36-10-0098-01

To visually enhance the distinctive developments in Table 1 (i.e., 1961-1985, 1985-2009,
and 2009-2021), Charts 2 to 6 present the trends in the share of investment in GDP in New
Brunswick for each investment component, as well as New Brunswick's relative level from thenational average share between 1961 and 2021.
Chart 2 shows that non-residential government investment in GDP in New Brunswick has
historically been above the national average, falling over time from an average share of 6 percent to 4 per cent (Panel A). In relative terms, the share fell from 174 per cent of the national
average in 1961-1985 to 149 per cent in 1986-2009 to 133 per cent in 2010-2021 (Panel B).
Hence, the province does not have a public non-residential investment gap relative to Canada.

15

New Brunswick’s residential business investment as a proportion of nominal GDP has
been relatively stable from 1961 to 2021. Chart 3 reveals that the share was at 6 per cent in both
1961-1985 and 2010-2021 (Panel A). However, as a proportion of the national average, thepercentage has fallen from 112 per cent in 1861-1985 to 85 per cent in 1986-2009 to 76 per centin 2010-2021 (Panel B). The latter mirrors the increase of Canada’s residential business
investment in GDP from an average of 5.2 per cent in 1961-1985 to 7.6 per cent in 2010-2021.
The province has a residential business investment gap relative to Canada.
As shown in Chart 4, the share of non-residential business investment in GDP in New
Brunswick has substantially fallen from an average share of 15.4 per cent in 1961-1985 to 9.5
per cent in 1986-2009 to 7.3 per cent in 2010-2021, an overall drop of 8 percentage points. At
the national level, the decline in the share of non-residential business investment was much less,by 4 percentage points (Panel A). The relative level of New Brunswick's non-residential
investment share in intensity has massively fallen from 120 per cent of the national average in
1961-1986 to 94 per cent in 1986-2009 to 74 per cent in 2010-2021 (Panel B). Consequently, theprovince has a significant non-residential business investment gap, an outcome that has widenedin recent years.
Charts 5 and 6 present the developments in the share of non-residential business
investment in structure, machinery and equipment. Both mirror the poor faring of non-residential
business investment in New Brunswick. In particular, the percentage of non-residential
investment in structures in GDP in New Brunswick almost halved from an average share of 7 percent in 1961-1985 to 4 per cent in 1986-2009 to 3 per cent in 2010-2021. At the national level,
there was no decline in this share (6 per cent) between 1961-1985 and 2010-2021 (Panel A of
Chart 5). Therefore, New Brunswick's proportion from the national average has fallen from 107
per cent in 1961-1985 to 88 per cent in 1986-2009 to 53 per cent in 2010-2021, a significant dropof 55 percentage points and mirroring a serious structure investment gap (Panel B of Chart 5).
The share of non-residential business investment in M&E in GDP in New Brunswick has
had a similar development. The average share sharply fell from 9 per cent in 1961-1985 to 6 percent in 1986-2009 to 4 per cent in 2010-2021. For Canada, the decline in this share was lesspronounced, only 3 percentage points from 7 percent in 1961-1985 to 4 per cent in 2010-2021(Panel A of Chart 6). Given the former and the latter, New Brunswick's non-residential M&E
intensity fell less than that of structures, from 132 per cent of the national level in 1961-1985 to99 percent in 1986-2009 to 110 per cent in 2010-2021, a drop of 22 percentage points andsuggesting that New Brunswick does not appear to have machinery and equipment investment
gap with Canada (Panel B of Chart 6). However, the 5 percentage points fall in New Brunswick's
machinery and equipment investment share of nominal GDP indicates a problem.

16

Chart 2: Percentage Point Difference between New Brunswick’s and Canada’s NonResidential Government Investment (current prices) as Share of Nominal GDP, 1961-2021
Panel A: Percentage Point Difference (Up/Down Bars)
12

Average Share 1961-1985:- (NB) 6.3%
- (CAD) 3.7%

10

Average Share 1986-2009:- (NB) 3.5%
- (CAD) 2.4%

6
4
2
0

CanadaNew Brunswick

Panel B: New Brunswick as a Proportion of Canada
250

200

Per Cent

Per Cent

8

Average Share
2010-2021:- (NB) 3.9%
- (CAD) 2.9%

150

100

50

Average Share 1986-2009:148.7%

Average Share
1961-1985: 173.7 %0

New Brunswick as a share of Canada (NB/Canada)

Sources: Statistics Canada, Table 36-10-0098-01

17

Average Share 20102021: 132.8%

Chart 3: Percentage Point Difference between New Brunswick’s and Canada’s Residential
Business Investment (current prices) as Share of Nominal GDP, 1961-2021
Panel A: Percentage Point Difference (Up/Down Bars)
12

Average Share 1986-2009:- (NB) 4.9%
- (CAD) 5.7%

10

6

4

Average Share
2010-2021:- (NB) 5.7%
- (CAD) 7.6%

Average Share 1961-1985:- (NB) 5.9%
- (CAD) 5.2%

20CanadaNew Brunswick

Panel B: New Brunswick as a Proportion of Canada
160
140
120

Per Cent

Per Cent

8

100
80
60
40

Average Share
1961-1985: 112.1 %Average Share 1986-2009:
84.6%

20
0

New Brunswick as a share of Canada (NB/Canada)

Sources: Statistics Canada, Table 36-10-0099-01

18

Average Share
2010-2021: 75.8%

Chart 4: Percentage Point Difference between New Brunswick’s and Canada’s NonResidential Business Investment (Structure and M&E (current prices)) as Share of
Nominal GDP, 1961-2021
Panel A: Percentage Point Difference (Up/Down Bars)
25

Average Share 1986-2009:- (NB) 9.5%
- (CAD) 10.1%

Per Cent

20

Average Share
2010-2021:- (NB) 7.3%
- (CAD) 9.9%

15

10

Average Share 1961-1985:- (NB) 15.4%- (CAD) 12.7%

50CanadaNew Brunswick

Panel B: New Brunswick as a Proportion of Canada
180
160
140

Per cent

120
100
80
60
40

Average Share 1986-2009:
94.1%

Average Share 1961-1985: 120.1 %20
0New Brunswick as a share of Canada (NB/Canada)

Sources: Statistics Canada, Table 36-10-0098-01

19

Average Share 20102021: 73.8%

Chart 5: Percentage Point Difference between New Brunswick’s and Canada’s NonResidential Business Investment in Structures (current prices) as Share of Nominal GDP,
1961-2021
Panel A: Percentage Point Difference (Up/Down Bars)
12

Average Share 1986-2009:- (NB) 4.0%
- (CAD) 4.5%

10

Average Share
2010-2021:- (NB) 3.2%
- (CAD) 6.2%

Per Cent

8

6

4

2

0

Average Share 1961-1985:- (NB) 6.7%
- (CAD) 6.2%

CanadaNew Brunswick

Panel B: New Brunswick as a Proportion of Canada
180
160
140

Average Share 20102021: 52.4%

Per Cent

120
100
80
60
40
20

Average Share 1986-2009:
88.2%

Average Share 1961-1985:
107.4 %

0

New Brunswick as a share of Canada (NB/Canada)

Sources: Statistics Canada, Table 36-10-0098-01

20

Chart 6: Percentage Point Difference between New Brunswick’s and Canada’s NonResidential Business Investment in M&E (current prices) as Share of Nominal GDP, 19612021
Panel A: Percentage Point Difference (Up/Down Bars)
14
12

Average Share 1986-2009:- (NB) 5.5%
- (CAD) 5.6%

Per Cent

10

Average Share
2010-2021:- (NB) 4.1%
- (CAD) 3.7%

8
6
4
2
0

Average Share 1961-1985:- (NB) 8.8%
- (CAD) 6.6%

CanadaNew Brunswick

Panel B: New Brunswick as a Proportion of Canada
180
160
140

Per Cent

120
100
80
60
40

Average Share 1986-2009: 99.0%

Average Share 1961-1985:
132.4 %

20
0

New Brunswick as a share of Canada (NB/Canada)

Sources: Statistics Canada, Table 36-10-0098-01

21

Average Share 20102021: 109.5%

In general, all investment components have experienced a downward trend for the past
six decades except for residential business investment. During the first 24 years, from 19612021, almost all investment components fared better than the national average. However, from1985 onwards, these investment developments started to be outpaced by the national average,
leading to investment gaps relative to Canada which widened in recent years. Consequently, as
discussed earlier and shown in panels of Chart 1, New Brunswick's total investment share of
GDP has substantially fallen.
Table 2 presents further information regarding the fall in the average share of investment
and each investment component from GDP in New Brunswick, accounting for periods 19611985 and 2010-2021. After averaging a very strong 27.6 per cent of GDP in 1961-1985, theshare fell 10.8 points to 16.8 per cent in 2010-2021. About one quarter (2.4 points) of the 11
percentage points fall-off in the investment share between 1961-1985 and 2010-2021 was due tothe decline in the government non-residential investment share from 6.3 per cent to 3.9 per cent.
Business residential investment made no contribution to the fall-off as its investment share wasvirtually unchanged between both periods at 5.9 per cent and 5.7 per cent. Ultimately, about
three-quarters of the fall-off in the investment share in New Brunswick between 1961-1985 and2010-2021 is accounted for by business non-residential investment, which fell 8.1 points from
15.4 per cent to 7.3 per cent. Both components for which non-residential business investment iscomposed of contribute to the total investment fall-off. The share of M&E investment in GDP
fell 4.6 points, whereas the share of structures fell 3.5 points between 1961-1985 and 2010-2021.
Table 2: Total Investment and Investment Components as a Share of Nominal GDP in New
Brunswick, (current prices), 1961-1985 and 2010-2021
Average Share
1961-1985

Average Share
2010-2021

Percentage Points
1981-85 and 2010-21

Total Investment (Government
and Business)

27.6

16.8

-10.8

Non-Residential Government
Investment (Structures, M&E)
Residential Business
Investment

6.3

3.9

-2.4

5.9

5.7

-0.2

Non-Residential Business
Investment

15.4

7.3

-8.1

Spending in Structures

6.7

3.2

-3.5

Spending in M&E

8.8

4.1

-4.6

Sources: Statistics Canada, Table 36-10-0099-01, and Table 36-10-0098-01

22

A Closer Look to Recent Developments (2000-2021)
For recent developments between 2000 and 2021, the investment share in GDP in New
Brunswick fell by 2.42 percentage points, from 19.0 per cent in 2000 to 16.6 per cent in 2021.
After experiencing a rise in the share in 2000-2008, New Brunswick witnessed criticalinvestment developments in subsequent years. From 2008 to 2015, investment sharply fell,
resulting in a significant drop of 6.4 points in the share and represented the worst outcome
among all provinces in the country. By 2015, New Brunswick's share was 15.6 per cent, 5.38
percentage points below the national average. For the last period between 2015 and 2021, New
Brunswick experienced an increase in investment which produced a slight rebound of 0.92
percentage points in the share. As a result, by 2021, of all provinces, New Brunswick's
investment share of GDP was the second lowest, exceedingly only that of Newfoundland andLabrador (Chart 7).
Chart 7: Total Investment (current prices) as Share of Nominal GDP, Canada, andProvinces, 1961, 2000 and 2021
40

35

Per Cent

30
25
20
15
10
5
0

BritishColumbia
1961
23.02
2000
15.73
2021
25.99

Ontario

CanadaAlberta

17.95
15.59
21.51

21.30
16.74
21.02

32.61
22.26
20.53

Nova
Scotia
23.81
18.41
20.32
1961

Sask

PEI

QuebecManitoba

29.53
19.24
19.59

36.52
17.24
19.44

19.54
15.10
18.64

23.55
15.13
17.92

2000

New
Brunswick
22.10
19.00
16.58

2021

Sources: Statistics Canada, Table 36-10-0325-01; Table 36-10-0222-01; Table 36-10-0099-01 and Table 36-100098-01

ii.

Investment Growth

New Brunswick's total investment grew at a compound annual rate of 2.48 per centbetween 1961 and 2021, 0.46 points below the national rate of 2.94 per cent (Table 3). During
this period, New Brunswick had the fifth lowest growth rate of all provinces (Panel A of

23

NFL
37.89
24.13
12.84

Appendix Chart 1).5 Prior to the 2000s during the 1961-1981 and 1981-2000 periods, New
Brunswick experienced annual investment growths of 4.06 per cent and 2.76 per cent (Panels B
and C of Appendix Chart 1). This growth continued in 2000-2008 at a rate of 4.2 per cent, thefourth lowest rate among all provinces and 1.15 points below the Canadian rate. However,between 2008 and 2015, investment growth sharply plummeted below zero to negative 4.2 per
cent. Consequently, the national compound annual growth rate exceeded that of New Brunswick
by 5.4 points, the widest gap in investment growth ever experienced between New Brunswick
and Canada (Table 3). During this same period, New Brunswick, Prince Edward Island, andQuebec were the only provinces that experienced a negative investment compound annual
growth rate, and, among the three, New Brunswick had the lowest rate (Panel E of Appendix
Chart 1). For the last period between 2015 and 2021, as presented in Panel F of Appendix Chart
1, New Brunswick's total investment growth picked up to 2.18 per cent, 1.69 percentage points
above the 0.49 per cent from Canada.
As a result, particularly in recent years, investment developments in New Brunswick
have been subject to ups and downs. The province ranked second last in the growth rate between
2008 and 2021 with a negative 1.31 per cent, just above Alberta, which ranked last with anegative growth rate of 2.59 per cent. On the other hand, New Brunswick ranked last with a 0.76
per cent growth rate in 2000-2021 (Panel G of Appendix Chart 1), reflecting the poor
performance of investment in the province for the last twenty-one years.
Table 3: Total Investment Growth in New Brunswick and in Canada (Compound Annual
Growth Rate), (chained dollars), 1961-2021
New Brunswick

CanadaGap Between
Investment Growth in
New Brunswick andCanada, 1961-2021

2.48

2.94

-0.46

1961-2000

3.42

3.14

0.28

1961-1981

4.06

4.74

-0.68

1981-2000

2.76

1.49

1.26

2000-2021

0.76

2.57

-1.81

2000-2008

4.20

5.35

-1.15

2008-2015

-4.20

1.25

-5.45

2015-2021

2.18

0.49

1.69

Periods

1961-2021

Sources: Statistics Canada, Table 36-10-0099-01, and Table 36-10-0098-01

5

Appendix Chart 1 contains panels from A to G, presenting the growth rates of Canada and all provinces during
different periods from 1961 to 2021.

24

To enhance comparability with Canada and other provinces, Panels A to D from
Appendix Chart 2 present investment developments in per capita terms. More specifically, in
2000, New Brunswick's per capita investment was $6,333 (2012 chained dollars), ranking sixth
among all provinces and 16 per cent below the Canadian average of $7,603 per capita (Panel A).
In 2008, New Brunswick's per capita investment increased 39 per cent since 2000, resulting in an$8,848 per capita investment with the same ranking among all provinces (Panel B). However,investment per capita spending dropped in 2015 to $6,448, ranking second last of all provinces
and 40 per cent lower than the national average (Panel C). By 2021, New Brunswick's per capita
investment was $7,047, ranking last among all provinces and 32 per cent below the national
average of $10,404 per capita (Panel D). The takeaway from the latter developments permits us
to visualize a much clearer story of New Brunswick's investment deterioration over time, ranking
sixth during the early-mid 2000s to last in 2021 in its per capita investment.
Tables 4 and 5 present developments of each type of investment to provide a thoroughunderstanding of the reasons for New Brunswick's weak total investment growth. In the periods
1961-2000 and 2000-2008, New Brunswick had increases in its investment flows, in real terms
driven by the growth in each investment component (Table 4 or 5). Nevertheless, as discussed
earlier, after 2008, performance deteriorated. From 2008 to 2015, New Brunswick's total
investment experienced a sharp fall of 26 per cent (Table 4). Over this period, except for nonresidential government spending, all investment components had negative growth rates. Nonresidential business investment fell by a substantial 41.8 per cent, a result mainly caused by themassive 62.5 per cent fall in investment in structures (Table 4). Total investment did slightly
rebound over the 2015-2021 period (13.8 percent increment), but the province saw drops in its
non-residential business investment, mainly from investment in M&E which fell by a significant
24.2 per cent.
Table 4 provides details on the total contribution of each component to investment in
New Brunswick over the years from 1961 to 2021. As expected, business investment accounts
for a higher share than non-residential government investment (77.5 per cent vs 22.2 per cent).
Among the subcomponents, non-residential investment has contributed 47 per cent, whereas
broken down by structure and M&E, spending in structure assets a 26.9 per cent to the total
investment; larger shares than those by residential investment (30.5 per cent) and spending in
non-residential M&E assets (20.2 per cent). Therefore, arguably much of New Brunswick's weak
investment performance has been driven by the weak non-residential business investment
development, as well as by the weak investment in structures.

25

Table 4: Total Investment and Investment Components in New Brunswick, (2012 chained dollars), 1961, 2000, 2015 and 2021

Total Investment(Government andBusiness)
Government
NonResidential
Investment(Structures,
M&E)
Gross Business
Investment
Residential
Investment
NonResidential
Investment
Spending on
Structures

Investment
in 1961

Investment
in 2000

Investment
in 2008

Investment
in 2015

Investment
in 2021% Change
in
Investment
1961-2000% Change
in
Investment
2000-2008% Change
in
Investment
2008-2015% Change
in
Investment
2015-2021

Total
Contribution
1961-2021
(%)

1,280

4,753

6,608

4,893

5,570

271.3

39.0

-26.0

13.8

100

461

883

996

1,045

1,099

91.5

12.8

4.9

5.2

22.2

807

3,858

5,602

3,839

4,465

378.1

45.2

-31.5

16.3

77.5

276

1,207

1,872

1,667

2,395

337.3

55.1

-11.0

43.7

30.5

531

2,651

3,730

2,172

2,070

399.2

40.7

-41.8

-4.7

47.1

402

1,580

2,226

834

1,056

293.0

40.9

-62.5

26.6

26.9

129
1,071
1,504
1,338
1,014
730.2
40.4
-11.0
-24.2
Spending
on M&E
Sources: Statistics Canada, Table 36-10-0099-01, and Table 36-10-0098-01. The table highlights in “dark grey” the major types of investment that fell in New
Brunswick since 2008

24

20.2

Table 5: Compound Annual Growth Rate of Total Investment and Investment Components
in New Brunswick, (2012 chained dollars), 1961-2021
1961-2000

2000-2008

2008-2015

2015-2021

3.42

4.20

-4.20

2.18

1.68

1.52

0.69

0.84

Gross Business
Investment

4.09

4.77

-5.26

2.55

Residential Business
Investment

3.86

5.64

-1.64

6.23

Non-Residential
Business Investment

4.21

4.36

-7.43

-0.80

3.57

4.38

-13.09

4.01

5.58

4.34

-1.66

-4.52

Total Investment(Business andGovernment)
Non-Residential
Government
Investment(Structures, M&E)

Spending in
Structures
Spending in M&E

Sources: Statistics Canada, Table 36-10-0099-01, and Table 36-10-0098-01

iii.

Net Investment

In simple words, net investment can be defined as the difference between the total money
spent on gross investment and the cost of depreciation of those fixed assets. Net investment canserve as an indicator for assessing a region's or country's economic production capabilities since
it provides a better sense of trends in the true size of the effective productive capacity of thecapital stock. As a result, net investment development provides much more thorough information
about investment in New Brunswick. In this subsection and throughout the rest of the report, realvalues are used when looking at net investment growth, whereas when analyzing the proportionlevels of net investment, nominal values are used.
In 1961, the net investment in New Brunswick was $362 million (chained 2012), an
amount that increased by 96 per cent to a $710 million in 2021. A major reason for such a small
increase in the province's net investment is attributed to the steady depreciation growth and fallin gross investment. More specifically, between 1961 and 2021, New Brunswick experienced adepreciation compound annual growth rate of 2.82 per cent, higher than the gross investment

25

growth rate and, hence, dragging down net investment growth to a negative 0.34 per cent (Table
6).
As shown in Table 6, from 1961 to 2000, New Brunswick's net investment grew at a low
rate due to the strong depreciation growth and the low gross investment. In the 2000s, between
2000 and 2008, net investment growth accelerated to 0.79 per cent; however, due to the poorgross investment development mentioned earlier between 2008 and 2015, the net investment
growth rate plummeted to a substantial negative 5.31 per cent. For the 2015-2021 period, New
Brunswick experienced a rebound in its growth rate of 1.62 per cent, increasing the net
investment value by $516 million (chained 2012). Overall, there has been a worse performanceof net investment than gross investment over 1961-2021 due to faster growth of depreciation,
reversing after 2015.
Table 6: Comparison of New Brunswick’s Total Investment and Depreciation Growth Rate
(Compound Annual Growth Rate), (chained dollars), 1961-2021
Periods
1961-2021
1961-2000
2000-2021
2000-2008
2008-2015
2015-2021

Depreciation
Compound Annual
Growth Rate
2.82
3.36
1.82
3.41
1.11
0.56

Investment Compound
Annual Growth Rate
2.48
3.42
0.76
4.20
-4.20
2.18

Net Investment
Compound Annual
Growth Rate
-0.34
0.06
-1.06
0.79
-5.31
1.62

Sources: Statistics Canada, Table 36-10-0099-01, and Table 36-10-0098-01

Chart 8 shows New Brunswick's gross investment and net investment as a share of
nominal GDP. The overall trend reflects similar outcomes discussed in Chart 1 and shows asignificant decrease in the share of investment and a shocking fall in the share of net investment.
Compared to historical trends before the 2000s, the net investment average share almost halvedin the last twenty-one years (7.3 per cent vs 3.3 per cent). Particularly between 2008 and 2015,
the share had a significant drop of 5.27 percentage points, whereas the overall drop between
2000 and 2021 was 3.08 percentage points.
Chart 9 shows the share of net investment as a percentage of gross investment. The
overall trend reveals a substantial fall in the share from 27 per cent in 1961 to 13 per cent in
2021, a large fall-off of 14 percentage points. This is a concerning development since it suggeststhat the share of investment used to increase the stock of capital goods in New Brunswick's
economy has fallen over time. The depreciation rate has risen and so more of investment goes toreplenishing existing capital stock. In other words, the rate of capital accumulation in theeconomy has fallen, with negative implications for the province's long-term productivity,
development, and economic growth.

26

Chart 8: New Brunswick’s Gross Investment and Net Investment as Share of Nominal
GDP, (current prices), 1961-2021
45
40
35

Per Cent

30

Average Share 1961-1999:(Net Investment) 7.26%(Gross Investment) 24.0%

Average Share 2000-2021:(Net Investment) 3.34%(Gross Investment) 17.7%

25
20
15
10
5
0

Total Investment (current prices) as share of nominal GDP

Net Invesment (current prices) as share of nominal GDP

Sources: Statistics Canada, Table 36-10-0325-01; Table 36-10-0222-01; Table 36-10-0099-01 and Table 36-100098-01

Chart 9: New Brunswick’s Net Investment-to-Gross Investment Ratio, (current prices),
1961-2021
60
50
40
30
20
10
0

Total Net Investment-to Gross Investment Ratio

Sources: Statistics Canada, Table 36-10-0325-01; Table 36-10-0222-01; Table 36-10-0099-01 and Table 36-100098-01

27

B.

(Section 2): Residential Business Investment, 2000-2021

i.

Residential Business Investment Growth

Residential business investment has fared relatively well in New Brunswick throughout
the past sixty years. In 1961, the province had a residential business investment per capita of$461 (2012 chained dollars), an amount that rose to $1,608 or $1.2 billion in 2000, growing at anannual rate of 3.9 per cent. This growth remained strong during the 2000s and for the 2000-2008
period, New Brunswick's business residential grew at a rate of 5.6 per cent, 0.23 percentage
points above Canada (Panel A of Chart 10). Between 2008 and 2015, the growth rate plummeted
to a negative 1.6 per cent and bounced back during the 2015-2021 period at 6.2 per cent, 2.29
percentage points above the Canadian growth rate. Consequently, albeit still below, New
Brunswick's overall housing investment growth rate from 2000 to 2021 was just 0.55 percentage
points below Canada's (3.9 per cent vs 3.3 per cent).
Panel B in Chart 10 shows the developments of residential business investment per capita
between 2000 and 2021. There has been an upward trend in investment for Canada and New
Brunswick for the past twenty-one years. Between 2008 and 2015, the trend kept relatively
steady, and by 2021, New Brunswick's business residential investment per capita rose to $3,030,
equivalent to $2.3 billion. New Brunswick now has 61 per cent of Canada's per capita businessresidential investment, down 11 percentage points from the 72 per cent share in 2000 (Panel C of
Chart 10).
Chart 10: Growth and Trends of Business Residential Investment in Canada and New
Brunswick, 2000-2021
Panel A: Residential Business Investment Growth (2012 chained dollars)
7

6.23
5.41

6
5

Per Cent

4

3.32

5.64
3.94

3.86

3.87
3.32

3

2.09

2
1
0
-1
-2

-1.64

-3
1961-2000

2000-2008

2008-2015
CanadaNew Brunswick

28

2015-2021

2000-2021

Panel B: Residential Business Investment per capita (2012 chained dollars)

Business Residential Investment percapita (2012 constant dollars)

5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Panel C: Residential Business Investment per capita (current prices): New Brunswick as aproportion of Canada (%)
80
75
70

Per Cent

65
60
55
50
45
40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Sources: Statistics Canada, Table 36-10-0099-01 and Table 17-10-0009-01

29

ii.

Residential Business Investment as a Share of Nominal GDP

New Brunswick's business residential investment share from nominal GDP has substantially
improved since 2000, increasing from 4.1 per cent in 2000 to 7.4 per cent in 2021, a 3.3
percentage points increment. This positive result has been part of a stabilized and strong
development in the business residential investment in the province. Between 2008 and 2015, theshare fell shortly by 1.1 points and rapidly recovered between 2015 and 2021, rising by 2.3
points. Nevertheless, in comparison to the shares of GDP going towards business residential
investment in Canada, the percentage point difference with New Brunswick has widened since2008 and by 2021, New Brunswick's share was situated 2.4 points below the national share(Chart 11). In relative terms, New Brunswick’s relative business residential investment
decreased by 17.6 points from 92.6 per cent of Canada’s to 75 per cent during the 2008-2021
period; similarly, from 2000 to 2021, this relative level decreased by 18.2 points (93.3 per centvs 75 per cent).
Chart 11: Residential Business Investment as a Share of Nominal GDP (current prices),
Canada and New Brunswick, 2000-2021
12
10

Per Cent

864202000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0099-01 and Table 36-10-0222-01

iii.

Residential Business Net Investment

The stable rise in residential gross investment that New Brunswick experienced from
2000-2021 has contributed to an overall increase in the province’s residential business net
investment. Panel A of Chart 12 pictures the latter, New Brunswick’s residential business grossinvestment and net investment.

30

In 2000, New Brunswick's residential net investment was $553 million rising to $943
million by 2021 (2012 chained dollars), a percentage rise of almost three quarters. Relative to
Canada, between 2008-2015, New Brunswick had a larger drop in its net residential investment
growth rate (- 4.5 per cent), which contributed to an important fall (Panel B of Chart 12). From2015 to 2021, the rate of growth bounced back and accelerated to 1.7 per cent, whereas Canada
experienced no growth. The latter reversed the negative development and led to a substantial
recovery, reaching previous residential net investment levels. Nevertheless, the overall
development (i.e., 2000-2021) shows that New Brunswick keeps falling behind the national
growth, majorly due to the weak gross investment development and steady depreciation (Panel C
of Chart 11). Between 2000 and 2021, New Brunswick experienced a high business residential
depreciation growth rate, and the share of depreciation in GDP more than doubled, from 2.2 percent in 2000 to 4.6 per cent in 2021 (Panel D of Chart 11). Therefore, the annual growth rate ofresidential net investment in New Brunswick in the period 2000-2021 was negative 0.6 per cent,
0.95 points below the Canadian growth rate.
Panel E in Chart 12 shows the residential business net investment to gross investment
ratio in New Brunswick. The overall trend from 2000 to 2021 has been downward. In 2000, theshare was 47.3 per cent falling to 38.2 per cent in 2021 (9.1 percentage points drop). The biggest
drop occurred between 2008 and 2015, recovering with an increase of 4.94 percentage points
during the 2015-2021 period. Hence, there has been a larger portion of gross investment goingtowards maintaining and replacing existing capital goods rather than adding new capital goods toincrease production capacity.
Chart 12: Residential Business Net Investment, Canada and New Brunswick, 2000-2021
Panel A: Residential Gross Investment and Net Investment in New Brunswick, (2012chained dollars)
3,000Million of Dollars

2,500
2,000
1,500
1,000
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Business Residential Net Investment

31

Business Residential Investment

Panel B: Residential Business Net Investment Growth, (2012 chained dollars)
3

2.04

2

1.73

1.38
0.00

0.40

0
-1

-0.85

-2

-0.46

-0.55
-1.13

-3
-4

-5

-4.54

-6
1961-2000

2000-2008

2008-2015
Canada2015-2021

2000-2021

New Brunswick

Panel C: Residential Business Gross Investment and Depreciation, (2012 chained dollars)
Mllions of Dollars (2012 constant)

3000
2500
2000
1500

1000
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Residential Depreciation in New Brunswick

Residential Investment in New Brunswick

Panel D: Residential Depreciation as a Share of Nominal GDP, NB, (current prices)
5.0
4.5
4.0

Per Cent

Per Cent

1

3.5
3.0
2.5
2.0
1.5
1.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
New Brunswick

32

Panel E: Residential Net Investment-to-Gross Investment Ratio, New Brunswick, (current
prices)60

Per Cent

50
40

30
20
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Net Investment to Investment Ratio (current prices)

Sources: Statistics Canada, Table 36-10-0099-01

C.

(Section 3): Non-Residential Business Investment (Structures, M&E), 20002021

The proportion of New Brunswick’s total non-residential investment that is allocatedto non-residential business investment (structure, machinery and equipment) fell by 12
percentage points between 2000 and 2021. In 2000, the share accounted for 78 per cent of thetotal non-residential investment. This proportion reached a peak of 79 per cent in 2008 and fell
gradually to 66 per cent in 2021. Out of the total share, the share of business investment in
structure assets accounted for 34 per cent, whereas the share of manufacturing and equipment
assets accounted for 32 per cent in 2021.
i.

Non-Residential Business Investment Growth

Contrary to New Brunswick’s residential business investment developments during 20002021, non-residential business investment has witnessed a decline. In effect, the only growth in
New Brunswick’s non-residential investment occurred from 2000 to 2008 with an annual growthrate of 4.3 per cent, just 0.57 points below the national rate. In subsequent years, the province
encountered a sharp decline in its investment and the growth rate plummeted below zero tonegative 7.4 per cent and negative 0.8 per cent in periods 2008-2015 and 2015-2021 (Panel A of
Chart 13). These negative developments were also taking place at the national level, particularly
between 2015 and 2021, having a substantial negative compound annual growth rate and worse
than that of New Brunswick (1.72 percentage points below). Consequently, the overallcompound annual growth rate for New Brunswick between 2000 and 2021 was negative, 2.53
percentage points below Canada’s growth rate (1.4 per cent vs -1.2 per cent). Panel B below
shows the continued fluctuation of non-residential investment in both regions, with New
33

Brunswick showing an overall downward slope, whereas Canada shows a marginal overall
upward slope. By 2021, New Brunswick’s non-residential business investment per capita was$2,619 (2012 chained dollars), 26 per cent above Nova Scotia’s and 40 per cent below Canada’s
per capita spending.6
Chart 13: Growth and Trends of Business Non-Residential Investment in Canada and New
Brunswick, (2012 chained dollars), 2000-2021
Panel A: Non-Residential Business Investment Growth
6
4

3.63

4.21

4.93

4.36

2

1.36

0.72

Per Cent

0
-2

-0.80

-1.17

2015-2021

2000-2021

-2.52

-4
-6
-8

-7.43

-10
1961-2000

2000-2008

2008-2015
CanadaNew Brunswick

Business Non-Residential
Investment (2012 constant dollars
per capita)

Panel B: Business Non-Residential Investment per capita
7,000
6,000

5,000
4,000
3,000
2,000
1,000
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01 and Table 17-10-0009-01

6

The database used to conduct the analysis in this report contains recent investment developments in Nova Scotia tocompare with New Brunswick.

34

ii.

Non-Residential Business Investment as a Share of Nominal GDP

As shown in Chart 14, the share of non-residential business investment in GDP in New
Brunswick has fallen since 2000, a trend that has been more pronounced after 2008. From 2000
to 2021, the share dropped by 5.53 percentage points (11.5 per cent vs 6 per cent). Eventually,
the percentage point difference between the Canadian and New Brunswick shares widened since2009 and by 2021, New Brunswick’s share was situated 2.29 percentage points below thenational share (6.0 per cent vs 8.3 per cent). Nevertheless, similar to New Brunswick, the overall
trend that Canada witnessed was also downward sloping, mirroring also the poor non-residential
business investment experienced at the national level.
Chart 14: Non-Residential Business Investment as a Share of Nominal GDP, Canada and

New Brunswick, (current prices), 2000-2021
13
12

Per Cent

11
10
9
8
7
6

5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01 and Table 36-10-0222-01

iii.

Non-Residential Business Net Investment

Due to the poor development of non-residential gross investment flows from the businesssector in New Brunswick, the net investment has dwindled markedly. In 2000, the businesssector’s per capita non-residential net investment accumulated $1,073 (chained 2012), an amountthat fell below zero to $262 in 2021. As shown in Panel A of Chart 15, after the 2008-2009
economic crisis, New Brunswick’s business net investment for non-residential assets sharply
declined until 2016, an outcome that developed differently for Canada. Particularly between
2012 and 2021, New Brunswick’s business non-residential net investment worsen to substantial
negative amounts. The reason for the latter is further explained in Appendix Chart 3, where New
Brunswick’s gross investment fell consistently lower than depreciation between 2012 and 2017,
increasing in 2018 and falling again until 2021. Consequently, New Brunswick’s non-residential

35net investment did not grow between 2000 and 2021, and its growth rate was a negative 2.1 per
cent, 1.38 percentage points below the national rate (Panel B of Chart 15).
To further illustrate the weak development of non-residential net investment in New
Brunswick, Panel A and B of Chart 16 show the trends of net investment and gross investment,
and net investment as a share of investment. Outcomes particularly from Panel B show that theshare of business non-residential net investment from non-residential gross investment has fallen
since 2008. After reaching an all-time high of 32 per cent in 2008, the province had a massive
fall of 60 percentage points from 2008-2016. Thus, by 2016, New Brunswick reached an all-time
low of 28 per cent, and by 2021, the share remained below zero at a negative 9 per cent. Thesedevelopments present a concerning scenario, especially for a type of investment that accounts fora bigger share of total investment developments.
Chart 15: Growth and Trends of Business Non-Residential Net Investment in Canada and
New Brunswick, (2012 chained dollars), 2000-2021

Net Business Non-Residential Investment(2012 constant dollars per capita)

Panel A: Business Non-Residential Net Investment per capita
2,000
1,500
1,000
500
0
-500
-1,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

36

Panel B: Business Non-Residential Net Investment Growth
2

1.07
0.55

1

0.57

0.47

0
-0.37

-1

-0.80
-1.34

Per Cent

-2
-3

-2.18

-2.54

-4
-5
-6
-7
-7.25

-8
1961-2000

2000-2008

2008-2015
Canada2015-2021

2000-2021

New Brunswick

Sources: Statistics Canada, Table 36-10-0098-01 and Table 17-10-0009-01

Chart 16: Business Non-Residential Net Investment and Investment in New Brunswick,
2000-2021
Panel A: Non-Residential Net investment and Non-residential Investment, (chained dollars)
4,000
3,500

Millions of Dollars

3,000
2,500
2,000
1,500
1,000
500
0
-500
-1,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Business Non-Residential Net Investment

37

Business Non-Residential Investment

Panel B: Non-Residential Net Investment-to- Gross Investment Ratio, (current prices)40
30

Per Cent

20
10
0
-10
-20
-30
-40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Non-Residential Net Investment to Investment Ratio (current prices)

Sources: Statistics Canada, Table 36-10-0098-01

D. Non-Residential Business Investment in Structures (non-residential buildings
and engineering construction), 2000-20217
i.

Non-Residential Business Investment in Structure GrowthNon-residential investment in structures by businesses decreased by $524 million (2012chained dollars), over the period 2000-2021falling from a per capita investment of $2,105 in2000 to $1,336 in 2021. As shown in Chart 17, New Brunswick’s business spending in structures
accounted for 49 per cent of the national average by 2021, down 51.3 percentage points from theshare in 2000. The biggest drop in the relative level occurred between 2008 and 2015 with 67
percentage points, a period for which investment in structure in New Brunswick trended
downwards consistently, whereas Canada’s bounced back one year after.
Chart 18 shows the growth rates witnessed between 2000 and 2021 for non-residential
business investment. During 2008-2021, the rate fell to a negative 5.5 per cent, an outcome thatwas influenced by the massive drop-off in the growth rate during the period 2008-2015 (negative
13 percent). Although New Brunswick saw positive growth rates during 2000-2008 and 20152021, the province had no growth between 2000 and 2021, and its negative growth rate was 3.7
percentage points below the national rate (-1.9 per cent vs 1.8 per cent).

7

In this report, we look at the overall developments of non-residential investment in structures, hence the analysis
sheds light on the investment progress in engineering construction and non-residential building jointly.

38

Chart 17: Non-Residential Business Investment in Structure per capita: New Brunswick as
a proportion of Canada (%), (current prices)
140
120

Per Cent

100
80
60

40
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Relative Terms (NB/Canada)

Chart 18: Non-Residential Business Investment in Structure Growth (chained dollars),
Canada and New Brunswick, 2000-2021
4.94

6
4

2.61

3.57

4.38

4.01
2.73

1.80

2

Per Cent

0
-2
-1.90

-4

-3.28

-6
-8
-10
-12
-14
1961-2000-13.092008-2015

2000-2008
Canada2015-2021

2000-2021

New Brunswick

Sources: Statistics Canada, Table 36-10-0098-01 and Table 17-10-0009-01

ii.

Non-Residential Business Investment in Structures as a Share of Nominal GDP

The percentage of GDP going towards business investment in non-residential structures
mirrors the performance of structure investment in New Brunswick. As shown in Chart 19, since2008, New Brunswick’s share fell steadily, recovering slightly between 2015 and 2021. By 2021,
39the province share reached 3 per cent, standing 2 percentage points below the Canadian share of
5 per cent. For the overall development from 2000 to 2021, New Brunswick’s business nonresidential investment in structures share dropped of by 2.07 percentage points, whereas inrelative terms, the drop was 70 percentage points. By 2021, relative to Canada’s non-residential
investment share in GDP, New Brunswick accounted for 59.8 per cent, down from 19 per cent in2000. Ultimately, in contrast to New Brunswick, Canada’s share followed a general upward
trend between 2000 and 2021. Rather than having a steep drop after 2008, the share bounced
back a year after, reaching an all-time high share in 2014 of 7.8 per cent and gradually falling
until 2021.
Chart 19: Non-Residential Business Investment in Structure as Share of Nominal GDP,
Canada and New Brunswick, 2000-2021
98
7Per Cent

6
5

4
3
2
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01 and Table 36-10-0222-01

iii.

Non-Residential Business Net Investment in Structures

Business non-residential net investment in structures in New Brunswick has not beenstrong. In addition to the weak gross investment throughout the years, the steady depreciation has
led the province to encounter with low net investment. Starting in 2011 up to 2016, nonresidential business net spending in structure was negative, slightly reversing the negative trend
from 2017 to 2020 and falling again in 2021. Interestingly, the depreciation growth rate slowed
down between 2011 to 2016; however, business gross investment in structures reached levels
that were more than offset by depreciation. On the other hand, Canada witnessed a sharp drop inits structural net investment between 2015 and 2021, however, in contrast to New Brunswick, itremained positive.

40

E.

Non-Residential Business Investment in M&E, 2000-2021

i.

Non-Residential Business Investment in M&E GrowthChart 20 shows New Brunswick’s non-residential business investment in machinery andequipment growth rates periods between 2000 and 2021. Akin to non-residential investment in
structures, during the early to mid-2000s, New Brunswick’s investment in machinery andequipment strongly grew at 4.3 per cent, just down by 0.6 points from Canada’s rate. During the
2008-2015 period, the compound annual growth rate fell below zero for both, Canada, and New
Brunswick; these outcomes continued during the 2015-2021 period for which New Brunswick
experienced a lower growth rate, 3.34 percentage points below the national rate (Chart 20).
Consequently, between 2008 and 2021, Canada and New Brunswick had no growth in theirmachinery and equipment business investment. The overall growth rates from 2000 to 2021,
suggest a poor performance for Canada and New Brunswick, with a national annual growth rateof 0.7 per cent and a negative 0.2 per cent for New Brunswick.
Chart 20: Non-Residential Business Investment in M&E Growth (Compound Annual Rate)(chained dollars), Canada and New Brunswick, 2000-2021
8
6.14
6

5.58

4.93

4.34

4
2

0.72

0
-0.26
-2
-2.31

-1.66

-1.18

-4
-4.52

-6
1961-2000

2000-2008

2008-2015
Canada2015-2021

2000-2021

New Brunswick

Sources: Statistics Canada, Table 36-10-0098-01

ii.

Non-Residential Business Investment in M&E as a Share of Nominal GDP

Chart 21 presents the trends for Canada’s and New Brunswick’s percentage of GDP
going towards non-residential business investment in machinery and equipment. In 2000, New
Brunswick’s share was at par with Canada’s at 6.3 per cent. Between 2000 and 2008, New
Brunswick’s share dropped 1.08 percentage points followed by another 0.65 and 1.73 percentage
point drops between the periods of 2008-2015 and 2015-2021. By 2021, New Brunswick’s
41

business investment in machinery and equipment as a share of GDP fell to 2.9 per cent, a fall-off
of 3.46 points since 2000. Similarly, Canada has witnessed a fall in its share since 2000, and by2021, its share feel to 3.10 per cent, a drop of 3.30 percentage points since 2000 and just 0.18
points above New Brunswick. As shown in Chart 21, the overall trend has been consistently
downward for both regions, a great contributor to the decline in business investment discussed in
Chart 16.
Chart 21: Non-Residential Business Investment in M&E as a Share of Nominal GDP in
Canada and New Brunswick, 2000-2021
7
6

Per Cent

5
4
3
2
1

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01 and Table 36-10-0222-01

iii.

Non-Residential Business Net Investment in M&E

The downward trend witnessed by New Brunswick in its gross investment in machineryand equipment has been similar to that of Canada’s. The year 2008 when a roughly controlledshare turned into a decline. This same story is apparent in New Brunswick’s and Canada’s
business net investment in machinery and equipment. In effect, since 2012, New Brunswick
witnessed a consistent negative net investment, a negative tendency that was also present at thenational level since 2015. By 2021, net investment fell below zero for both regions, a decrease of$322 million (2012 chained dollars) for New Brunswick and $9.2 billion for Canada since 2000.
The low depreciation rate slowed between 2011-2016, nevertheless, given the levels of grossinvestment, net investment values in machinery and equipment have also been weak.

42

a.

A Closer Look at Investment by Industryiv.

Non-Residential Business Investment (Structure and M&E): Industries

New Brunswick’s weak non-residential business investment is a concern; the obvious
question is what has led to this weakness? Tables 7 and 8 below help us to better understand thedevelopments of non-residential business investment by industry in New Brunswick from 2000
to 2021.
Table 7 presents the percentage change in the absolute level of investment over different
periods, as well as the total contribution of investment in each industry to total non-residential
business investment. Among all industries, the industries of utilities, manufacturing,transportation and warehousing, and finance accounted for three-quarters of the total
contribution; thus, being the five most important industries for non-residential investment in
New Brunswick. As shown in the table, in almost all industries the level of investment increased
significantly during the 2000-2008 period, producing a substantial increment in non-residential
business investment of 40.7 per cent between a and 2008. However, after the 2008-2009
economic crisis, investment fell sharply in many important industries during 2008-2015,
particularly in the five most important ones. For instance, investment drastically fell in the utility
industry by 75.7 per cent, whereas the falls in the transportation and warehousing, financeindustries, and mining quarry were 61.4 per cent, 36.4 per cent, and 74 per cent. Hence total nonresidential business investment fell by a massive $1.6 billion, or 42 per cent, between 2008 and2015. Similar falls in investment in other industries continued over the 2015-2021 period whichcaused non-residential business investment to fall by an additional $102 million, 4.7 per cent.
Consequently, the total contribution of many industries fell between periods 2000-2008 and2008-2021.
In general, the drops in non-residential business investment in New Brunswick started tohappen after the 2008-09 economic crisis. The massive drop in investment in the top fiveindustries significantly impacted the development of total investment in New Brunswick. In fact,
the sum of share of the top five industries decreased by 6.1 points, from 77 per cent in 2000-2008
to 70.9 per cent in 2008-2021.
Table 8 provides the growth rate experienced in each industry during different periods of
non-residential investment. Unsurprisingly, the worst developments occurred during 2008-2015,
in the aftermath of the global financial crisis. Industries like utilities, mining, transportation, andwarehousing witnessed negative growth rates below 10 per cent; whereas industries categorizedin other services, arts and entertainment, and educational services experienced high growth rates
during such a period. Similarly, during 2015-2021, many industries did not experience growthand, among the five most important industries, only the transportation, and information andcultural industries experienced significant growth rate above 3 per cent.
43

Table 7: Non-Residential Business Investment by Industry in New Brunswick, (chained dollars), 1961-2021
Business NonResidential
Investment by
Industries

Investment
in 2000

Investment
in 2008

Investment
in 2015

Investment
in 2021% Change
in
Investment
2000-2008% Change
in
Investment
2008-2015% Change
in
Investment
2015-2021

Total
Contribution
2000-2008
(%)

Total
Contribution
2008-2021
(%)

2,651

3,730

2,172

2,070

40.7

-41.8

-4.70

100

100

Agriculture,
forestry, fishingand hunting

104

81

82

130

-22.1

1.2

58.5

3.0

4.1

Mining,quarrying andoil and gas
extraction

126

350

91

12

177.8

-74.0

-86.8

7.1

4.7

Utilities

285

1,061

258

260

272.3

-75.7

0.8

19.6

17.6

Construction

98

101

94

82

3.1

-6.9

-12.8

3.2

3.7

Manufacturing
Wholesale
trade
Retail trade
Transportation
andwarehousing

1,104

522

498

398

-52.7

-4.6

-20.1

27.8

18.7

44

49

73

65

11.4

49.0

-11.0

1.5

2.6

67

247

171

98

268.7

-30.8

-42.7

4.6

6.4

306

591

228

292

93.1

-61.4

28.1

13.7

13.5

126

210

205

371

66.7

-2.4

81.0

5.2

11.0

293

387

246

177

32.1

-36.4

-28.0

10.7

10.1

Business NonResidential
Investment

Informationand culturalindustries
Finance,insurance, realestate, rental
and leasing

43

Professional,
scientific andtechnical
services
Administrativeand support,
wastemanagement
andremediation
services
Educational
services
Health careand social
assistanceArts,
entertainmentand recreation
Accomodationand food
services
Other services(except public
administration)

29

23

32

26

-20.7

39.1

-18.8

0.9

1.1

23

29

18

31

26.1

-37.9

72.2

0.8

1.0

2

1

4

10

-50.0

300.0

150.0

0.1

0.2

6

30

68

21

400.0

126.7

-69.1

0.5

1.6

5

7

38

14

40.0

442.9

-63.2

0.2

0.9

14

44

45

64

214.3

2.3

42.2

0.9

2.1

5

5

21

16

0.0

320.0

-23.8

0.2

0.6

Sources: Statistics Canada, Table 36-10-0096-01. The table highlights in “dark grey” the major falls by industry of non-residential business investment in New
Brunswick since 200844

Table 8: Non-Residential Business Investment Growth in NB, (chained dollars), 1961-2021
Growth Rate 2000-2008

Growth Rate 2008-2015

Growth Rate 2015-2021

Business NonResidential
Investment
Growth Rate

4.36

-7.43

-0.80

Agriculture,
forestry,fishing andhunting
Growth Rate

-3.08

0.18

7.98

13.62

-17.51-28.6617.86-18.29

0.13

0.38

-1.02

-2.25

-8.94

-0.67

-3.67

1.35

5.86

-1.92

17.71

-5.12

-8.86

Transportation
andwarehousing
Growth Rate

8.58

-12.72

4.21

Informationand culturalindustries
Growth Rate

6.59

-0.34

10.39

Finance,insurance, realestate, rental
and leasing
Growth Rate

3.54

-6.27

-5.34

Mining,quarrying andoil and gas
extraction
Growth Rate
Utilities
Growth Rate
Construction
Growth Rate
Manufacturing
Growth Rate
Wholesaletrade Growth
Rate
Retail trade
Growth Rate

45

Professional,
scientific andtechnical
services
Growth Rate

-2.86

4.83

-3.40

Administrativeand support,
wastemanagement
andremediation
services
Growth Rate

2.94

-6.59

9.48

Educational
services
Growth Rate

-8.30

21.90

16.50

Health careand social
assistance
Growth Rate

22.28

12.40

-17.78Arts,
entertainmentand recreation
Growth Rate

4.30

27.34

-15.33

15.39

0.32

6.05

0.00

22.75

-4.43

Accomodationand food
services
Growth Rate
Other services(except public
administration)
Growth Rate

Sources: Statistics Canada, Table 36-10-0096-01

v.

Non-Residential Business Investment in Structures: Industry Breakdown

Chart 22 reveals the trends of business non-residential spending in structure assets for thelast twenty-one years in New Brunswick's economy's five most predominant industries. The
chart shows that the utilities industry has generally stood out with higher investment in structure
assets than other industries since 2000. After witnessing a positive upward trend for the first-tomid years of the 2000s, investment per capita in structure assets reached a peak in 2008 of $1004(2012 chained dollars), which substantially fell in subsequent years to $250 in 2021. A similar46

story can be seen in the trends of investment in the transportation and warehousing industry. By
2008, real investment per capita peaked at $597, falling to $190 by 2021.
As shown in the chart, investment in structure assets in other industries has been low incomparison to utilities or transportation and warehousing industries. Indeed, investment inindustries like manufacturing, finance, insurance real estate, rental and leasing has been
downward slope from 2000 to 2021. The only industry where investment had a steep upward
trend was the information and cultural industry as shown in Chart22. Moreover, surprisingly, theindustry received higher investment during the pandemic than in 2019 and was higher than inother industries except for Utilities.
Overall, the investment developments by select industries from 2000 to 2021 suggest thatpart of the big fall in non-residential business spending in structures was due to the sharp fall ofinvestment in the utilities industry; a type of industry that depends on structural assets investment
to operate.
Chart 22: Business Non-Residential Investment in Structures in New Brunswick, by SelectIndustry, (2012 constant dollars per capita), 2000-2021
2012 Constant Dollars Per Capita

1,600
1,400
1,200
1,000
800
600
400
200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Utilities Industry

Manufacturing Industry

Transportation and warehousing Industry

Information and cultural industries

Finance, insurance, real estate, rental and leasing

Sources: Statistics Canada, Table 36-10-0096-01 and Table 17-10-0009-01

vi.

Non-Residential Business Investment in M&E: Industries

Chart 23 shows the trend in business non-residential spending assets in machinery andequipment assets by select industries. For the last twenty-one years, apart from manufacturing
and transportation and warehousing industries, the investment received for M&E assets has
witnessed a downward trend from 2000 to 2021. In particular, the finance, insurance, real estate,47

rental, and leasing industry stood out during the early 2000s, reaching a peak of investment percapita in M&E assets of $475 (2012 chained dollars) in 2006, falling to $140 in 2021.
As mentioned, the two industries whose overall investment did not follow a downward
sloping were the manufacturing and transportation and warehousing industries (Panels A and B
of Appendix 5). In effect, these industries are known to depend on the investment level of M&E
assets to operate efficiently. On the other hand, Chart 24 shows that manufacturing has generally
stood out with higher investment than other industries, reaching a summit in 2018 of $718 (2012constant dollars). These latter developments in both industries leave us with the explanation for
why investment in machinery and equipment assets has not dropped substantially as investment
in structure assets did for the last twenty-one years. However, investment was affected in allindustries during the pandemic since no sector received more investment compared with 2019and it remained lower in 2021 than historical investment levels.
Chart 23: Business Non-Residential Investment in M&E in New Brunswick, by SelectIndustry, (2012 constant dollars per capita), 2000-2021
2012 Constant Dollars Per Capita

800
700

600
500
400
300
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Utilities Industry
Manufacturing Industry
Transportation and Warehousing Industry
Information and cultural industries
Finance, insurance, real estate, rental and leasing

Sources: Statistics Canada, Table 36-10-0096-01 and Table 17-10-0009-01

F.

(Section 4): Government Non-Residential Investment (Structures, M&E),
2000-2021

The proportion of New Brunswick’s total non-residential investment that is allocated to
public non-residential investment (structure, machinery, and equipment) increased by 11.8
percentage points between 2000 and 2021. In 2000, the share accounted for 22 per cent of thetotal non-residential investment. This proportion reached a peak of 42 per cent in 2011 and fell
gradually to 34 per cent in 2021. Out of the total share, the input share of public investment in48

structure assets accounted for 28 per cent, whereas the share of manufacturing and equipment
assets accounted for only 6 per cent in 2021.
i.

Government Non-Residential Investment Growth

In 2000, New Brunswick's government non-residential investment per capita was $1,177
or $888 million (2012 chained dollars), 27 per cent above the national average. However,developments in subsequent years for New Brunswick were not as robust as Canada in general.
Between 2000 and 2008 the annual growth rate in New Brunswick's public non-residential
investment was 1.5 per cent, 5.51 percentage points below Canada. For the 2008-2015 period
New Brunswick's annual growth was 0.6 per cent and continued situating lower than Canada(Panel A of Chart 24). Over this same period, New Brunswick reached an all-high time percapita investment in 2011 of $2,500, however, it was followed by a steep fall until 2013 andgradual progress until 2015 (Panel B). By 2015-2021, the province's annual growth rose to 0.8
per cent, a lower rate than Canada of 1.2 per cent. Consequently, relative to Canada, thecompound annual growth rate witnessed by New Brunswick in 2000-2021 was 2.28 percentage
points below the Canadian growth (3.3 per cent vs 1.1 per cent).
By 2021, New Brunswick's per capita public spending in non-residential assets was$1,390, whereas for Canada ascended to $1,480. As Panel B shows, New Brunswick investment
has had a strong cyclical behaviour that had an overall upward trend during eleven years until
2011 and reversed in subsequent years to a downward trend until 2021. Hence, the overall
scenario suggests that there has been small progress in government spending in non-residential
assets in New Brunswick, just as for Canada since 2000.
Chart 24: Growth and Trends of Non-Residential Government Investment (chained
dollars) in Canada and New Brunswick, 2000-2021
Panel A: Non-Residential Government Investment Growth, 2000-2021
8

7.03

7

Per Cent

6
5
4

3.33

3
2

1.48

1.68

1.52
1.00

1

1.27

0.69

0.84

1.05

2015-2021

2000-202101961-2000

2000-2008
Canada2008-2015
New Brunswick49

Government Non-Residential
Investment (2012 constant dollars
per capita)

Panel B: Non-Residential Government Investment per capita, 2000-2021
3,000
2,500
2,000
1,500
1,000
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01

ii.

Non-Residential Government Investment as a Share of Nominal GDP

New Brunswick’s non-residential government investment as a share of GDP has overall
remained the same, marginally falling 0.18 percentage points between 2000 and 2021 (3.26 percent vs 3.08 per cent). Given the low public investment flows New Brunswick has had,
especially after reaching its highest point in 2011, the province’s share dropped by 0.31
percentage points between 2008 and 2021. This drop in share was driven by the consistentdecline that happened in periods 2008-2015 and 2015-2021, each with drops of 0.09 and 0.22
percentage points. As shown in Chart 27, New Brunswick's non-residential government
investment share from nominal GDP has hovered above Canada's since 2000. By 2021, New
Brunswick's share situated 0.33 percentage points above Canada's.
Chart 25: Non-Residential Government Investment as a Share of Nominal GDP, Canada
and New Brunswick, (current prices), 2000-2021
7
6

Per Cent

5
4
3
2
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01 and Table 36-10-0222-01

50

iii.

Non-Residential Government Net Investment

Non-residential government net investment in New Brunswick mirrors the small progressgross investment in non-residential assets has had for the past twenty-one years. In effect, during
the early 2000s, New Brunswick had negative public net investment in structure, machinery, andequipment. This low net investment progress recovered until 2011 and steeply fall until 2015
with gradual progress until 2021. By 2021, New Brunswick's government non-residential net
investment was negative at $22 million, a 65 per cent decline since the net value in 2000 and 97
per cent since the highest net value in 2011 (Chart 26).
In contrast to Canada, the overall progress in New Brunswick's public net investment in
non-residential assets has been subject to strong cyclical behaviour which has led to an overall
decline in its net value. On the other hand, whilst Canada's government net spending has
increased marginally, it has remained positive throughout the past two decades. On the other
hand, most of New Brunswick's poor development has been driven by its low government
investment. Depreciation has consistently increased since 2000 and, on occasions, the annual
depreciation growth has surpassed the investment growth rate.8

Net Government Non-Residential
Investment (2012 constant dollars
per capita)

Chart 26: Non-Residential Government Net Investment per capita in Canada and New
Brunswick, (chained dollars), 2000-2021
1,200
1,000
800
600
400
200
0
-200
-400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01

8

For the period 2008-2021, the depreciation growth rate was exactly twice the non-residential public investment
growth, similar to the ratio for the whole period between 2000 and 2021.

51

G.

Non-Residential Government Investment in Structures (non-residentialbuildings and engineering construction), 2000-2021

i.

Growth in Non-Residential Government Investment in Structures

Chart 27 shows the growth rate witnessed by Canada and New Brunswick in distinctive
periods from 2000 to 2021. In 2000, New Brunswick's per capita public investment in structures
was $1,046 (2012 chained dollars), 34 per cent above the national average of $776. By 2008,
New Brunswick's per capita spending ascended to $1,038, 12 per cent below the Canadian
average, an outcome that was driven by the negative growth that New Brunswick had, and therobust growth rate Canada had from 2000 to 2008. During the 2008-2015 period, New
Brunswick's growth rate picked up to 2.4 per cent and dropped to a negative 0.04 per cent during
2015-2021. The overall growth rate that New Brunswick experienced between 2000 and 2021
was low relative to Canada, 2.38 percentage points below the national rate (3.1 percent vs 0.75
per cent). Thus, by 2021, the per capita public spending in non-residential structures in theprovince ascended to $1,161, close to the $1,191 national average.
Chart 27: Non-Residential Government Investment in Structures Growth, Canada and
New Brunswick, (chained dollars), 2000-2021
6.48

7
6

Per Cent

5
4

3.13
2.48

3
2

1.08

1.85

1.47

0.75

1

0.27

0
-0.04

-0.16

-1
1961-2000

2000-2008

2008-2015
Canada2015-2021

2000-2021

New Brunswick

Sources: Statistics Canada, Table 36-10-0098-01

ii.

Non-Residential Government Investment in Structure as a Share of Nominal GDP

Chart 28 shows the trends between 2000 and 2021 of the share of government nonresidential investment in structure in GDP. Since 2000, New Brunswick’s share has hovered in arange of 0.26 and 2.37 percentage points above Canada’s. From 2000 to 2021, the share hasremained the same, falling just 0.06 points to 2.5 per cent in 2021. The reason for the latter is dueto the overall unchanged public investment in structure assets that the province has had in 200052

2021. New Brunswick's government investment in structure as a share of GDP dropped during
periods of weak investment and rose during strong periods, resulting in an overall trend ofminimum change in the share. In relative terms, in 2000, New Brunswick accounted for 188 percent of Canada's, falling to 115 per cent in 2021, a fall-off of 73.5 percentage points.
Chart 28: Government Non-Residential Investment in Structures as a share of Nominal
GDP, Canada and New Brunswick, (current prices), 2000-2021
6
5

Per Cent

432
102000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01 and Table 36-10-0222-01

iii.

Non-Residential Government Net Investment in Structures

New Brunswick's government net investment in structures has fallen since 2000. In
contrast to Canada, the province has witnessed low to negative net investment values. As shownin Chart 29, during the early 2000s, the province had a negative net public investment in
structure for four consecutive years (2001-2004), followed by a recovery in subsequent years andanother drop below zero in 2008. By 2011, New Brunswick reached an all-time high in its net
per capita government investment in non-residential structures of $973; however, this wasfollowed by a sharp fall until 2015 and negative net investment values between 2019 and 2021.
The overall trends show a strong cyclical behaviour in New Brunswick's net investment, whereas
Canada has witnessed steady increments and declines which has led to an overall small increase
in its net investment since 2000.

53

Chart 29: Non-Residential Government Net Investment in Structures, Canada and New
Brunswick, (chained dollars), 2000-2021
Net Government Non-Residential
Investment (2012 constant dollars per
capita)

1,200

1,000
800
600
400
200
0
-200
-400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01

H.

Non-Residential Government Investment in M&E, 2000-2021

i.

Non-Residential Government Investment in M&E

Chart 30 presents the growth rate in different periods from 1961 to 2021 for New
Brunswick’s and Canada's public non-residential investment in machinery and equipment.
Between 2000 and 2008, New Brunswick's investment growth rate was 10.7 per cent, 1.98
percentage points above the national rate. During 2008-2015, the growth rate feel to significantly
below zero to 7.8 per cent and picked up again during 2015-2021 at a rate of 6.3 per cent, just
0.13 points above the Canadian rate. By 2021, New Brunswick's public per capita investment inmachinery and equipment ascended to $229, 21 per cent lower than the national average of $290.
For this same year, New Brunswick's public investment accounted for 1.64 per cent of Canada's,a slight drop from the 1.97 per cent in 2000.
Based on Chart 30, the overall developments between 2000 and 2021 suggest that New
Brunswick's public investment in machinery and equipment assets has risen for the past twentyone years, and, albeit such development has underperformed Canada's, it has fared slightly better
than public investment in structure assets.9

9

See Charts 27, the overall growth rate from 2000 to 2021 has been higher for public non-residential investment inmachinery and equipment (3.0 per cent vs 0.8 percent).

54

Chart 30: Non-Residential Government Investment in M&E, Canada and New Brunswick,(chained dollars), 2000-2021
15
9.62

10

10.70

7.00
5

6.28

6.36

4.76

4.28
2.96

0
-3.08

-5

-7.82

-10
1961-2000

2000-2008

2008-2015
Canada2015-2021

2000-2021

New Brunswick

Sources: Statistics Canada, Table 36-10-0098-01

ii.

Non-Residential Government Investment in M&E as a Share of Nominal GDP

As shown in Chart 31, in 2000, New Brunswick's public non-residential spending inmachinery and equipment as a share of GDP, ascended to 0.63 per cent, just 0.03 percentage
points above Canada' share of 0.60 per cent. Between 2000 and 2008, New Brunswick's sharerose by 0.16 points, ascending to a 0.78 per cent in 2008. For periods 2008-2015 and 2015-2021,
the share fell drastically and by 2021, the province's share situated at 0.51, below Canada's.
The overall trend shows that both, Canada and New Brunswick's percentage of GDP
going towards public investment in machinery and equipment have fallen since 2000.
Nevertheless, the fall has been slightly more pronounce for New Brunswick with a fall-off of0.12 versus a 0.07 percentage points for Canada between 2000 and 2021. In relative terms, New
Brunswick's share in 2021 accounted for 96.5 percent of Canada's share, a fall-off of 7.84 points
from the 104 per cent in 2000.

55

1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01

iii.

Non-Residential Government Net Investment in M&E

From 2000 to 2021, the trend in New Brunswick’s non-residential government net
investment in machinery and equipment has had a strong cyclical behaviour. As shown in Chart
32, New Brunswick witnessed low to negative net public investment values in machinery andequipment. During the first four years of the 2000s, the province had a negative net investment,
followed by recoveries in 2014 and 2015, and a drop again in 2016. By 2011, the provincereached an all-time high in its net public per capita investment in machinery and equipment of$152 (2012 chained dollars); however, this was followed by a sharp decline in subsequent years.
Hence, as shown in the chart from 2012 to 2021, the province encountered shocking low net
investment levels, worse than those during the early 2000s.
Chart 32: Non-Residential Government Net Investment in M&E, Canada and New
Brunswick, (chained dollars), 2000-2021
Net Government NonResidential Investment (2012constant dollars per capita)

Per Cent

Chart 31: Non-Residential Government Investment in M&E as a Share of Nominal GDP,
Canada and New Brunswick, (current prices), 2000-2021

200
150
100
50
0
-50
-100

-150
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CanadaNew Brunswick

Sources: Statistics Canada, Table 36-10-0098-01

56

Part Two: The Nexus of Policies and Programs: Shaping Investment in New
Brunswick
As discussed in part one of the report, New Brunswick enjoyed a strong investment
development during 1961-1985. However, over time, this development decreased and, between
2008 and 2015, the province witnessed a significant fall in its investment levels. Consequently, it
is important to question and comprehend what actions, such as the development of policies andprograms, could have influenced the weak investment development in New Brunswick. Thissection reviews and assesses policies and programs that the federal and local government in New
Brunswick have implemented, particularly those that have a direct effect on investment such as
tax incentives, investment promotion agencies, business support services (i.e., mentorship toentrepreneurs or business incubator), financial assistance, infrastructure development, andbusiness regulatory environment.

A. Tax Incentives
Corporate Tax Rate for Active and Small Businesses
Before the 2000s, Canada's federal corporate tax rate was extremely high, such that in1961 it was as high as 41 per cent for both, small and active businesses; the combined tax ratewith provincial corporate tax ascended to almost 51 per cent.10 During this same year, New
Brunswick's corporate tax rate for active and small businesses was 9 per cent. Over time, these
rates experienced a significant drop, and by 2000, the corporate federal rate for active businesses
dropped to 29 per cent, whereas for small businesses it dropped to 13 per cent. A slightly
different story occurred to the corporate tax rate in New Brunswick since the rates for active
businesses were increased to 17 per cent and for small businesses it was decreased to 4.5 per centin 2000.
During the early 2000s, New Brunswick's fiscal performance projected a deficit ofaround $16.8 million for the 1999-2000 budgetary accounts, which motivated the government tochange its fiscal policy (Department of Finance, 2000). Thus, for the period of 2006-2007, theprovince's budget rose to a surplus of $22.2 million (Department of Finance, 2007). During thissame period, the government of New Brunswick decreased the corporate tax rate for active
businesses to 13 per cent and increased the rate to 5 per cent for small businesses. In subsequent
years, particularly those after the 2008-2009 economic crisis, provincial corporate tax rates
remained relatively the same, whereas the federal rates experienced small drops. These changes
in New Brunswick’s fiscal policy could have affected business investment in the province,
10

The small business rate applies to active businesses with gross income up to $500,000. Active businesses withgross income earned more than the small business threshold, are subject to the general corporate tax rate. The small
business deduction threshold increased from $400,000 to $500,000 in 2009 for all provinces in Canada.

57

particularly from small businesses that did not experience a cut on their corporate tax rates giventhat during such period the province witnessed huge drops in investment flow. In addition, theBank of Canada reduced policy rates to a historical low of 0.25 percent in 2009 in part, to boost
investment; yet this still did not impact investment after 2008 in New Brunswick as discussed inpart one of this report.
Between 2011 and 2023, there have been minimal changes in the federal and provincial
corporate tax rates. In effect, since 2012, the federal rates for businesses has been maintained at
15 per cent, and for small businesses, the rate dropped to 9 per cent in 2019, where it hasremained. On the other hand, the New Brunswick rate for active businesses increased to 14 percent in 2016, this rate has kept the same since then, while the rate for small businesses was
reduced in 2018 to 2.5 percent, a rate still in place in 2023 (CRA, 2022). Overall, as shown inPanels A to B in Chart 33, there has been a downward-sloping trend in federal and provincial
corporate tax rates, actions that have been more pronounced in recent years for small businesses
and which could have a correlation with the pick-up in New Brunswick's investment in recent
years.
Chart 33: Corporate Income Tax Rate for Active and Small Businesses, 1961-2019
Panel A: Federal and New Brunswick General Corporate Tax Rate (Active Businesses)
45
40
35

Per Cent

30
25
20
15
10
5
0

Federal Rate

NB

Source: Department of Finance (2018a) and (2018b), Top Federal, Provincial Corporate Tax Rates (Active
Businesses), 1960 to 201958

Panel B: Federal Corporate Income Tax Rate for Small Businesses
45
40
35

Per Cent

30
25
20
15
10

5

2011

2013

2015

2017

2019

2011

2013

2015

2017

2019

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

1977

1975

1973

1971

1969

1967

1965

1963

1961

0

Panel C: New Brunswick Corporate Income Tax Rate for Small Businesses
1210

Per Cent

8
6
4

2

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

1979

1977

1975

1973

1971

1969

1967

1965

1963

1961

0

Source: Department of Finance, Federal and Provincial Corporate Tax Rates (small businesses), 1960 to 2019

Interest Rate
As shown in Chart 34, before the 2008 economic crisis, the Bank of Canada’s policy rate
hovered above 2 per cent and it reached a high bound close to 4.2 per cent prior to the crisis. The
rate dropped after 2008 and kept hovering between 0.5 per cent and 1.75 per cent from 2012 to2019. More recently, the Canadian interest rate has experienced a rise, standing at 4.75 per centin mid-2023. According to these latest trends and to the developments of investment in New
Brunswick discussed in part one of this report, it seems that the province's investment had aninverse correlation with the Canadian interest rate. More specifically, during the period of high59

interest rates, the province witnessed an upward trend in its investment, whereas, between 2008
and 2015, the province's investment substantially dropped, unaffected by the low-interest rateduring those years. From 2015 to 2021, the province experienced an investment pick-up, which
was not affected by the increasing interest rates. Therefore, arguably, changes in monetary policy
did not influence New Brunswick's weak investment development in the past twenty-one years.
Chart 34: Interest Rates in Canada (Overnight Rate), 1990-2022

Source: Trading Economics, 2023

Tax Credits: Federal and Provincial Government Programs
Over time, the federal government has implemented different tax credits that benefit
broad-scale business investment and development in various sectors of the economy, whereas the
New Brunswick government has made efforts to provide credits expressly to help local
businesses and residential investment. After the 2008-2009 economic crisis and to support firsttime homebuyers, the federal government introduced the home buyers’ tax credit as part of
Canada’s Budget launched in 2009, providing a 15 per cent credit. This plan also included a 19
per cent temporary tax relief on business investment, a 50 per cent straight-line capital costallowance for investments or processing of manufacturing and equipment, and a 100 per centcapital cost allowance rate for investment in computers (this benefit included all businesses in all
sectors of the economy) (Department of Finance Canada, 2009). At the provincial level, thegovernment of New Brunswick introduced additional tax credits, however, similar to the federal
budget, none of them targeted investment in the utilities industry, an important industry in New
Brunswick that had a substantial investment drop until 2015, thus affecting the province’s grossinvestment.
More recently, according to the Income Tax Guide (2022), corporations may be eligible
for federal tax credits, such as Canadian film or video production, Canadian journalist labour,
logging operations, and film or video production services. The Canadian government also
60

provides a federal foreign business income tax credit to avoid double taxation for companies thatpay foreign tax on profits earned for operating abroad, thus helping businesses to reduce their tax
liability in Canada. On the other hand, corporations that generate at least 10 per cent of earnings
from manufacturing and processing goods within Canada for sale and lease are eligible for the
manufacturing and processing profits deduction (MPPD), a type of tax deduction designed toincentivize corporations to engage in manufacturing and processing activity within Canada. In
addition, starting after 2021, manufacturers with qualified zero-emission technology and at least
10 per cent of their revenue from conducting eligible green manufacturing activities such as solar
panels or wind turbines are eligible for a temporary tax reduction. More specifically, income
subject to the general corporate rate of 15 per cent is now taxed at 7.5 per cent, whereas income
for small businesses that would be taxed at 9 per cent is now taxed at 4.5 per cent. The Income
Tax Guide from CRA presents the plan for such temporary measures where the reduced rates
will be gradually phased out starting in 2029 and fully phased out after 2031.
Table 9: Reduced Tax Rates for Zero-Emission Technology
Tax year start

Small Business Rate

Other Rate

2022 to 2028

4.50%

7.50%

2029

5.63%

9.38%

2030

6.75%

11.25%

2031

7.88%

13.13%

2032 and later

8%

15%

Source: Canada Revenue Agency, Income Tax Guide

Under specific qualifications, corporations can also claim an investment tax credit (ITC)by applying a specified percentage to the cost of acquiring specific property or on certain
expenditures (CRA, 2023). Investments and expenses that qualify for an ITC include expenses ofacquiring qualified property, the cost of acquiring qualified resource property, pre-production
mining expenditures, apprenticeship expenditures, and eligible childcare spaces. Corporations
investing in qualified property can earn ITCs on a qualified property mainly for use in activities
in the Atlantic Region. Hence, this tax credit supports investment in qualified property for use insectors such as farming, logging, manufacturing and processing, harvesting peat, or storinggrain.11 Ultimately, the Atlantic investment tax credit also supports some investment in qualified
resource property for use in gas and oil, and the mining oil sector in the region (CRA, 2023).

11

The Atlantic Investment Tax Credit was launched in 2012 and since then, it has been used to support investment
into the region.

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Tax Credits: Property Programs
In Canada, residential property owners are subject to taxes levied by their respective
provinces and municipalities. In New Brunswick, every property owner is subject to a property
tax, therefore, to mitigate the burden of this taxation, the provincial government has implemented
a tax relief programs. For instance, two programs administered by Property Assessment Services
of Service New Brunswick are the provincial residential property tax credit and the property tax
allowance. Both programs contemplate providing a tax break or reduction to owners of real
property who occupy the property as their principal residence or that are low-income. The
province also offers a Farmland Identification Program offering a deferral of provincial property
taxes for the preservation of real property for agricultural use (Government of New Brunswick,2023).
On the other hand, over the years, the government also aided business property owners
and, more recently, in 2022, the government of New Brunswick released a new property tax
relief program explicitly designed to help owners of businesses or large apartments against risingcosts (Government of New Brunswick, 2020). This program follows similar criteria as the spike
protection mechanism implemented in 2013 with the difference that it focuses on apartmentbuildings with four units or more (i.e., large properties). Noticeably, New Brunswick has madebig efforts to ease the burden of property tax on its taxpayers. Hence, it is not surprising that for
the last twenty-one years, the province has had increasing residential investment as explained inpart one of the report.
Tax Credits: Venture Capital Program
Apart from the significant property tax relief New Brunswick offers to its taxpayers, theprovince has also designed programs to benefit small businesses, incentive investment throughventure capital funds and support research and development expenditure. In particular, theprovincial government has made different modifications over time to the small business investor
tax credit act and, up to date, it offers a program that provides a personal and corporate income
non-refundable tax credit. For individual investors, the program provides a tax credit equal to 50
per cent for eligible investments up to $250,000 conducted after April 2015, whereas forcorporations and trusts it offers a tax credit of 15 per cent based on investments of up to$500,000 effective from January 2014 (Government of New Brunswick, 2019). To allow
flexibility, investors are allowed to carry the unused tax credit forward for up to seven years or
carry it back for up to three years.
To promote investment in small and medium-sized businesses, in 2013, the New
Brunswick government made changes to the Labour-Sponsored Venture Capital (LSVC) tax
credit program. This program encourages individuals and corporations to invest in venture
62

capital funds in prescribed NB LSVC corporations and provides a tax credit as a percentage ofthe investment made. If the investment was conducted after March 17, 2009, the credit rises from15 per cent to 20 per cent, whereas investments made before then are eligible for a nonrefundable tax credit of 15 per cent, similar to the tax credit offered by the federal government
for federally approved LSVC corporations (Government of New Brunswick, 2013).

B. Investment Promotion Agencies
Over time, the federal government and provincial governments in Canada have worked toestablish different agencies to help promote investment. Many of these agencies receive funding
to lead investment projects across Canada and thus, provide a more accessible service to current
and new businesses. In the case of New Brunswick, the province has the Atlantic Canada
Opportunities Agency (ACOA) and Opportunities New Brunswick (ONB) as the two leading
investment promotion agencies. The ACOA is a federal agency established in 1987 and has
served the Atlantic Provinces since then to promote economic development and job creation
through the promotion of investment in the region. It collaborates with various stakeholders,
including provincial governments, industry associations and community organizations, to drive
sustainable economic development.
On the other hand, Opportunities NB was founded in 2015 by the government of New
Brunswick after merging Invest New Brunswick with the Department of Economic
Development, adding additional support to promoting investment in the province. The agency's
primary mandate is to attract and facilitate investment, and similarly to the ACOA, they workwith different stakeholders (i.e., businesses of all sizes, other government agencies and businessdevelopment committees). Since its launch, ONB has provided funding and helped create 10,688
actual jobs, 17,279 committed jobs, and a net of $1,853 billion in GDP contribution to New
Brunswick (ONB, 2023).
The primary difference between these two agencies is in the focus of their investment
promotion. More specifically, ACOA focuses on promoting investment emphasizing economic
development in businesses, communities, innovation and skills, exports, and indigenous
communities in all the Atlantic region (ACOA, 2023). In contrast, ONB focuses on attracting
investment, supporting business growth, workforce and regional development. In summary,
ONB is a complementary agency to ACOA with a priority on New Brunswick's investment
growth.
To further promote investment, in 2018 the federal government founded an additional
agency called "Invest in Canada". This agency focuses on attracting and facilitating foreign
direct investment into Canada. Instead of focusing only on a particular region (i.e., Atlantic
Canada), the agency incentivizes international corporations to establish across Canada.
63

Therefore, the agency can benefit any region since it also works closely with provincial, andterritorial governments, as well as with other investment agencies (Invest in Canada, 2023).
Businesses and corporations in Canada also count on other federal institutions that,
although their primary purpose is not to be an investment agency, they indirectly conduct
investment promotion through their service. Hence, these organizations provide an importantvalue for promoting investment in the country. For instance, the Canadian Trade Commissioner
Service (TCS) focuses on facilitating trade in export activities and indirectly, the institution
offers support and information on investment opportunities across Canada. Export Development
Canada (EDC) is another institution which offers services to Canadian exporter and international
business activities and, similarly, it provides investment promotion by helping Canadiancompanies establish a presence in other markets.
Overall, after ACOA was established in 1987, it took New Brunswick around twenty-four
years to have an alternative agency for investment promotion after launching Invest NB in 2011and later, launching Opportunities NB in 2015. This event clearly affected the promotion of
investment in the province and the know-how for current and new businesses to operate
efficiently in changing markets, especially during turmoil economic events. Therefore, the recent
introduction of Opportunities NB together with Invest in Canada could be one explanation for
why between 2015 and 2021, New Brunswick's investment slightly picked up, and why between
2008 and 2015, the province’s investment performance was weak.

C. Business Support Services
The investment promotion agencies mentioned previously have also supported businesses
through accelerators and mentorship programs. Nevertheless, in collaboration with the private
sector, the New Brunswick government and the federal government have funded different
organizations to provide alternative assistance with entrepreneurship and business growthprograms. In 1970, the Community Business Development Corporation (CBDC) was founded asa non-profit organization with the support of the federal and provincial governments. Since then,
CBDC has assisted small-and medium-sized businesses with counselling, training and advisory
services focusing on the Atlantic region. CBDC has also provided forums for New Brunswick
business owners and financial assistance to new and existing businesses, which currently rises toa maximum of $150,000 (CBDC, 2023). By 2006, with funding from the provincial government,
the University of New Brunswick launched the Technology Management and Entrepreneurshipprogram with the objective of helping entrepreneurs, particularly in the area of technology andinnovation; to date, the program has helped to launch more than 200 start-up companies (UNB,2023).

64

By 2010, in collaboration with tech economy entrepreneurs, stakeholders that support
innovation and the provincial and federal governments, Venn Innovation was founded. The
organization opened to service in Moncton with the mission of helping New Brunswick techcompanies get to market, sustain, and grow their business. Venn Innovation came as the only
organization by then that provided a full service specifically to support the investment andgrowth of technological and innovative businesses. In 2017, the provincial government invested$363,200 and the federal government $398,600 through ACOA's business development programin Venn Innovation (Government of New Brunswick, 2017b).
Between 2013 and 2014, Planet Hatch and Ignite Fredericton were launched as sisterbusiness supporter centres. Both centres are not-for-profit and receive funding from private
institutions as well as from the provincial and federal governments. The main mandate for both
centres is to attract, create and support entrepreneurs. Ignite Fredericton has prioritized support
for local businesses in greater Fredericton, whereas Planet Hatch, their support has extended toother areas, supporting more than 200 businesses, and creating 400 local jobs (Planet Hatch,2023). In addition, in 2014, the New Brunswick government partnered with the Fredericton
Chamber to operate a program to assist immigrant entrepreneurship in Fredericton. This program
was known as the Hive and in hand with Planet Hatch and Ignite Fredericton, it provided
immigrants with training, mentoring, and networking opportunities (Government of New
Brunswick, 2014). Ultimately, during the same year, with support of the provincial government,
New Brunswick Community College (NBCC) launched the Oasis mentorship program at
Miramichi to connect small businesses facing challenges with experienced entrepreneurs toprovide support, guidance and resources for successful growth. In 2017, the government of New
Brunswick extended their support to the program through an investment of $61,792, anadditional amount to the funding of $90,000 in 2015 and $67,000 in 2016. The program was firstlaunched at Miramichi, with the help of the funding it was extended to campuses in Moncton andSaint John (Government of New Brunswick, 2017c).
Overall, since 2010, there has been a noticeable initiative to support businesses throughmentorship and training in New Brunswick. Different business support centres and programs
have been launched with a huge involvement from the private and public sectors. This may be
one reason why investment picked up between 2015 and 2021.

D. Financial Assistance
The availability of capital or financial assistance for investment from government has
been a crucial stepping stone for small-and medium-sized businesses to grow and expand acrossmarkets. The latter has been something that the federal government has mainly supported andthus, since 1962, the Industrial Research Assistance Program (IRAP) has been kept present tohelp provide non-repayable funds to small and medium-sized businesses (SMEs). This program65

has mainly supported investment in technology adaptation and commercialization. Hence, thecontributions to firms were divided into core funds and temporary programs, as well as separated
financial assistance to not-for-profit organizations to provide innovation services to SMEs.
Between 2012-13 and 2015-16, as shown in Table 10 below, IRAP distributed over $900 million
in contributions to SMEs and organizations through core and temporary financing (NRC, 2019).
Table 10: Financials between 2012-13 and 2015-16 (in millions $) in Canada

Image source: Government of Canada, IRAP comptroller, 2019

In addition, according to a recent evaluation report in 2022, the total financial support
provided by the IRAP over the evaluation period between 2018 and 2022 was more than $1.3
billion. Importantly, this total financial support that the IRAP distributed did not include about$450 million in contribution funding through other non-core programming. As shown in thegraph below, over the 5-year span between 2017-18 and 2021-22, total expenditures increase
from $227 million to $686 million (+ 484 per cent), with grant contribution increasing from $216
million to $582 million, and operating expenditures increasing from $61 million to $104 million.

66

Chart 35: Financials between 2017-18 and 2021-22 (in millions $) in Canada

Image source: Government of Canada, IRAP comptroller, 2022

Another distinguishing program introduced by the federal government was the Canada
Small Business Financing Program (CSBFP). This program was launched in 1999 as anextension to the 1961 Small Business Loan (SBL) program, aiming to provide the availability offinancing for the establishment, modernization, expansion, and improvement of small businesses(Government of Canada, 2014). This program was particularly important and successful during
the 2008-2009 economic crisis since an economic analysis found that participation in the
program had a statistically significant positive effect on employment, salary, and revenue growth(Chandler, 2010). By 2009, the federal government launched the Business Credit Availability
Program, an additional program designed to create access to credit for SMEs. The program
included initiatives like the Canadian Secured Credit Facility, which provided credit to viablebusinesses unable to obtain traditional financing (Government of Canada, 2009).
In recent years, the CSBFP and IRAP have been kept by the federal as pilar programs forsupporting SMEs. However, financing has also been present through other institutions such as
the mentioned agencies ACOA or Opportunity NB. Moreover, financial institutions like theBusiness Development Bank of Canada or the Canada Infrastructure Bank form part of the large
financial structure that the federal government has developed over the years.
On the other hand, the role the New Brunswick government has developed has been
complementary to the variety of financial options the federal government provided to businesses
over time. In 2003, the New Brunswick Innovation Foundation (NBIF) was launched, a not-forprofit organization that since then has been a pillar in venture capital investment for a span ofindustries such as environmental technology, life sciences, and manufacturing. This institution
has invested over $100 million, plus $ 457 million more leveraged from other sources. It has also67contributed to more than 494 research projects, 75 professors in the province, and 113 companies
created (NBIF, 2022). Albeit the NBIF has been independent, they have received funds from thefederal and provincial governments, as well as from other investment institutions.
In 2007, the provincial government of New Brunswick introduced the “NB Growth
Program”, providing access to a $3 million budget for start-up companies, and expansions inevery region in the province (GNB, 2009). This program was of substantial help, especially after
the 2008-2009 economic crisis; many companies in southeastern New Brunswick benefited fromthe program. In addition, the provincial government extended the Northern Economic
Development Fund (NEDF) with an increment of $50 million for three years up to 2009, a
program that was first introduced in 1999 and renewed in 2004 to financially support competitive
companies, and communities and set a stage for economic growth through infrastructure
investment (Regional Development Corporation, 2011).
In recent years, the provincial government has continued to deliver financial support in asimilar way, either by industrial-specific programs or funding through other organizations (i.e.,
Opportunities NB and NBIF). In 2017, through the Youth Employment Fund, One Job Pledge,
and Workforce Expansion programs, the provincial government invested $649,00 in regionaljobs in Quispamsis, Rothesay, and Hampton to support jobs and 32 different employers in theregion. During the same year, an investment of $63.6 million in the NBIF and New Brunswick
Health Research Foundation designed for four years was provided as a commitment toinnovation and research (Government of New Brunswick, 2017a). A year after, in 2018, in
collaboration with the venture capital firm Build Ventures Funds II, the provincial government
contributed $10 million for funding to innovative companies. Likewise, the funding policy tosupport export-oriented small businesses was introduced through Opportunities NB to enhance
the competitiveness of these companies in markets outside the province (Government of New
Brunswick, 2018). Ultimately, as shown below, according to the report launched by the
Canadian Venture Capital Association (CVCA) in 2021, among the Atlantic provinces, New
Brunswick was the most active province in venture capital investment. The province led thecapital investment in the Atlantic region with $126 million invested in fourteen deals. Hence,
NBIF ranked as the 7th most active venture capital private firm in Canada and as the 3rd most
government-founded firm in Canada (NBIF, 2021).

68

Chart 36: Most Active Venture Capital Firms and Funds

Image source: CVCA H1 Report, 2021

Table 11: Most Government Funded Firms in Canada

Image source: CVCA H1 Report, 2021

Overall, since 1961, there has been considerable of help from the federal and provincial
governments providing financial assistance to different companies in different sectors.
Particularly for small and medium-sized businesses, there have been distinctive programs forwhich the mandate has been to incubate business. The provincial government's role in New
Brunswick has focused on facilitating capital financing to specific industries, and designing
programs for which regional, innovative, or technological businesses have resulted benefited.
During the economic turmoil in 2008, financial programs were extended, and during recent
years, New Brunswick has demonstrated to be capable of raising large amounts of financing tohelp put start-up companies on the map. Consequently, the downward investment trend New
Brunswick has experienced in recent decades cannot be attributed to the lack of financial
69

assistance; contrary, venture capital for investment has grown with time and has become moreaccessible than ever before.

E. Infrastructure
Infrastructure development is one important factor for attracting investment and, over theyears, New Brunswick has had important projects that have helped businesses to grow and easethe flow of goods and services. In effect, between 1949 and 1971, the federal government
invested $96 million to build 500 kilometers of the Trans-Canada Highway in New Brunswick, amassive infrastructure project that greatly improved transportation and connectivity throughout
the province. In 1968, as part of the Saint John Throughway project, the Saint John Harbour
Bridge, a suspension bridge spanning the Saint John River facilitated the connection of the east
and west sides of the city, serving as a major transportation route. Between 1993 and 1997,
although not explicitly in New Brunswick, the Confederation Bridge which connects New
Brunswick with Prince Edwards Island, was built. This was an impressive infrastructure of 12.0
kilometers which replaced the ferry service that existed between the provinces, easing thetransportation of goods and services across the provinces. These projects were among some of
the most important projects conducted prior to the 2000s in New Brunswick, helping
substantially to enhance the connectivity in the province.
By the early 2000s, the federal government launched the Canada Strategic Infrastructure
Fund (CSIF), a program designed to support large-scale strategic infrastructure projects. The
program specifically provided funding related to transportation, public transit, water andwastewater systems, and other major infrastructure areas. The CSIF was part of the Budget 2001
program of $2 billion together with the Border Infrastructure Fund (BIF), an additional programwith an allocated $600 million that supported the alleviation of traffic congestion, and increase
security, safety, and crossing capacity at borders (Infrastructure Canada, 2014). In 2003, as partof the Budget 2003 and a way to provide infrastructure funding to municipalities and ruralcommunities across Canada, the federal government launched the $1 billion Municipal Rural
Infrastructure Fund (MRIF), which had a top-up of $200 million for the Budget 2006
(Infrastructure Canada, 2008). This program targeted projects in small communities related to theinfrastructure of bridges, roads, community centers, water systems, and recreational facilities.
Ultimately, as a response to the global 2008-2009 economic crisis, the federal government
launched Canada's Economic Action Plan in 2009. This program was part of the Budget 2009 tofight the effects of the global recession and it had an infrastructure stimulus fund for 2 years.
From these programs, New Brunswick was able to gain substantial help since during the 2000s,
the province was able to fulfill projects such as the Moncton Coliseum Complex, New
Brunswick Route 1 gateway, and the extension of the Greater Moncton Romeo LeblancInternational Airport. Ultimately, as part of a final upgrade to Route 2 and Route 95 in New
Brunswick, the Trans-Canada highway with a four-lane freeway was finalized in 2007.
70

In recent years (i.e., 2011-2023), New Brunswick has continued to invest in new and oldinfrastructure with the help of the federal government. In 2016, the federal government
introduced the "Investing in Canada Infrastructure Program", a $33 billion program delivered
through bilateral agreements with provinces and territories. The program was designed toprovide long-term and stable funding for infrastructure projects (Infrastructure Canada, 2023a).
During this year, Canada and New Brunswick signed an agreement to invest more than $87
million for the rehabilitation, repair, and modernization of existing infrastructures. In 2018, New
Brunswick entered into a second agreement with the federal government under the same program
to work together in long-term investment infrastructure. This agreement provided New
Brunswick with funding of more the $666 million over 10 years, distributed in five funding
streams that included green infrastructure, culture, and recreation infrastructure, rural andnorthern infrastructure, public transit infrastructure, and Covid-19 resilience infrastructure.
In 2010, New Brunswick was the leader in providing high-speed internet access among
all provinces. In effect, since 2003, the province started investing in providing broadband
connectivity to all its regions, particularly in rural areas. The provincial government invested $18
million in Xplore Communication and $12.7 million in Bell Canada to provide broadband andcellular improvements, and in 2016, they invested an additional $8 million for the construction of
10 radio towers (Government of New Brunswick, 2017d). Whilst these investments over theyears intended positive outcomes, a forensic audit found in 2021 put doubt whether suchprograms were meeting the goals after finding irregularities and poor governance structure to
manage the funding (Auditor General of New Brunswick, 2021).
At the moment, according to the "Investing in Canada Plan Project Map", New
Brunswick counts 838 infrastructure investment projects across its region. Close to 16 projects
are for trade and transportation, 9 of them being on modernization and expansion of thesefacilities. About 357 projects are related to green infrastructure and 313 to social, community,
and recreational infrastructure, whereas 35 are related to rural infrastructure (Infrastructure
Canada, 2023b). Among all these projects, some of New Brunswick's important upgrades will be
the Saint John Port (i.e., a $42 million investment), water and wastewater infrastructure in SaintJohn, underground infrastructure in Moncton's downtown, and solar energy generation and sewer
infrastructure in Edmundston.
Overall, New Brunswick has had important infrastructure projects over the years,
particularly during recent years and the province has benefited from the agreement with thefederal government in long-term infrastructural investment. Due to Covid-19, the federal
government assisted with infrastructure funding to boost the economy, just like it did in 2009
after the global financial crisis. However, New Brunswick keeps falling behind in theinfrastructure spending since some programs may not be achieving their goals due to poor
71

funding management. According to the transportation and infrastructure annual report of 20192020, the province's overall performance of provincial roads in good or fair condition did notmeet the target due to the below-threshold funding provided by the government for the
rehabilitation of roads (Government of New Brunswick, 2020). The latter performance was not
an isolated one since reports from 2014-2015, 2016-2017, and 2017-2018, suggested a similar
performance, where there was a lack of funding and capacity for the transportation andinfrastructure department to adequately maintain current infrastructure (i.e., roads and bridges).

F. Business Regulations
Despite other changes that have occurred over the years, the regulatory businessenvironment in Canada has not seen radical change. More specifically, depending on the service
or product being offered and the location of the business, it will be necessary the fulfill theregulation standards from the federal, provincial, and municipal governments, as well as fromindustrial associations and regulatory bodies. A generic regulatory framework requires
businesses and corporations to register their name, permits, and licenses for operation, thefulfillment of employment regulations, environmental regulations, industry-specific regulations,and regulatory agencies regulations. On occasion some regulations from the federal government
could differ from those from the municipal or provincial government, making the systemcomplex and requiring the business to have a higher cost burden to the fulfillment of every
regulation. In addition, permits and licenses require a renewal (e.g., every 5 years), and foreign
investors require a business visa to conduct investment in Canada.
To reduce the red tape, in 2004, the federal government introduced Canada's Action Plan
to Reduce Red Tape. This plan aimed to reduce administrative burden and simplify regulatory
requirements for businesses. This initiative involved reviewing regulations, streamlining
processes, and implementing gauges for minimizing paperwork and compliance costs. Hence, in
hand with this plan, in 2011, the government launched the Red Tape Reduction Commission(Government of Canada, 2012). In 2005, the federal government introduced online service
delivery (BizPal) as a one-stop online platform for business permits and licenses, aimed tosimplify the process of starting and operating a business; this platform was officially launched in
New Brunswick in 2009 (Government of New Brunswick, 2009). Ultimately, as part of thecabinet directive on regulatory management and based on recommendation reports, thegovernment introduced the "small business lens" to ensure that regulators were sensitive to theneeds of small businesses when designing regulations. In effect, the lens introduced several
requirements that regulators must consider when designing regulations impacting small
businesses (Government of Canada, 2016).

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Regulatory System: Provincial Government
Over the past twenty-one years, the provincial regulatory system in New Brunswick has
evolved with changes in environmental, employment, permit, consumer protection, and data
privacy regulations. However, the regulatory burden on companies has not been reduced. In
2013, the provincial government approved a fracking moratorium, a decision that has been
controversial up to date due to missed economic opportunities. The government of New
Brunswick has acknowledged the difficulties of the regulatory business environment and in
2015, they participated with other Atlantic provinces in the establishment of the "Office ofRegulatory Affairs and Service Effectiveness"(Council for Atlantic Premiers, 2023). This office
had the mandate of creating a better climate for doing business in and between the provinces,
reducing red tape, and eliminating barriers to the flow of goods and services.
According to the report launched by Opportunities NB titled "Agile Business Ensuring
Regulatory Competitiveness", in 2019, the government of New Brunswick worked withcounterparts in Nova Scotia to introduce a made-in-New-Brunswick "Business Impact
Assessment tool" designed to estimate the increase or decrease in regulatory burden when
departments and agencies make changes that impact the business sector. Since 2019, this tool has
been used as a fundamental instrument for government decision-making processes. On the other
hand, the government introduced a business navigator team to help businesses understand howchanging rules affected their business. Between 2019 and 2021, this program reduced
compliance time by approximately 140,000 hours and reduced regulatory burden by around$1.45 million (Opportunities NB, 2021).
The report further indicates that in 2019, the provincial government introduced a"wholesale discount program" that addressed the issue of licenses for restaurants and bars paying
the full retail rates. The estimated saving for businesses due to the program were $1.6 million.
The processing of permits changed to an "e-permitting" system, allowing businesses to receive
an electronic copy of their permit, and thus, reducing the need for businesses to travel to andfrom district offices. Furthermore, the amendments to the general regulation in the pension
benefits act in New Brunswick now require a solvency ratio of 85 per cent, alleviating somefinancial pressure and with an estimated savings of $24 million for businesses (Opportunities
NB, 2021).
Whilst there has been important progress in Canada to improve the business regulatoryenvironment, many old regulations together with newly implemented ones in recent years have
led to a regulatory environment that has barely reduced red tape. The federal government has
played an important role in acting plans to benefit innovation, attention to small and mediumsized businesses, and provide measurement tools to regulatory agencies. On the other hand, thegovernment of New Brunswick has also conducted changes and has focused on helping local
73

businesses with the reduction of regulatory burden. Nevertheless, in New Brunswick, manychanges happened in recent years, and some of the implemented services to reduce red tapeestablished by the federal government were adopted late in the province (e.g., BizPal was
introduced in New Brunswick 4 years after its official launch). On the other hand, much of theease of regulatory burden has been focused to help current businesses and little has been done to
implement innovative programs to attract new businesses and foreign investment. In addition, thefracking moratorium in New Brunswick caused a huge controversy in 2013 due to the missed
economic opportunities for the province's economy.

Part Three: Summary and Conclusion
This it provides an overall assessment of the investment situation in New Brunswick bysummarizing the types of investment discussed. We first assess the trends of investment in New
Brunswick, then an evaluation of policies and programs impacting investment. Lastly, thissection provides a set of recommendation to improves investment performance in New
Brunswick.

A. Trends of Investment
Types ofInvestment

Trends••Total Investment

•
•
•
•

Residential
Investment(Business)••

The share of investment in GDP fell from an average of 28 percent in 1961-1985 to 17 per cent in 2010-2021.
Between 1961 and 2008, investment in New Brunswick
experienced growth. After 2008, particularly in 2008-2015,
New Brunswick had the worst growth among all provinces (4.2 per cent per year). As a result, the province's overall
investment growth rate in 2000-2021 was 0.76 per cent, thelowest for any province in Canada.
Between 2000-2021, net investment did not grow since thegrowth rate was a negative 1.06 per cent.
The average share of net investment in GDP fell from 7 per centin 1961-1999 to 3 per cent in 2000-2021.
New Brunswick’s net investment-to-investment ratio dropped
from 27 per cent in 1961 to 14 per cent in 2021.
The average share of residential business investment in GDP
maintained stable around 6.0 per cent from 1961 to 2021.
Between 2000 and 2021, residential investment had a growth of
3.3 per cent.
There was no growth in residential business net investment
between 2000 and 2021.
74

•

Non-Residential
Business Investment
in Structure Assets

•

•
•
•
Non-Residential
Business Investment
in M&E Assets••
Non-Residential
Government
Investment(Structure and
M&E)

•
•

The average share of non-residential investment in structures in
GDP fell from a 7 per cent in 1961-1985 to 3 per cent in 20102021.
Between 2000 and 2021, non-residential business investment in
structure assets had a negative annual growth of 1.9 per cent.
The worst development occurred from 2008 to 2015 since therate sharply dropped to a significant negative 13.1 per cent.
The fall of investment in the utility industry drove the fall of
non-residential investment in structured assets.
The average share of non-residential investment in M&E in
GDP fell from a 9 per cent in 1961-1985 to 4 per cent in 20102021
Between 2000 and 2021, non-residential investment in M&E
assets had a negative annual growth of 0.26 per cent. The worst
development occurred from 2015 to 2021 since the rate of
growth dropped to a negative 4.5 per cent.
Investment in M&E assets has dropped over the years; however,it has not been as steep as investment in structure assets.
Investment in M&E has mainly been driven by the stabledevelopment in manufacturing and transportation andwarehousing industries.
The share of non-residential government investment in GDP has
historically been above the national average, falling over timefrom an average share of 6 per cent to 4 per cent.
Between 2000 and 2021, non-residential government investment
grew by 1.05 per cent.
The proportion of New Brunswick’s total non-residential
investment that is allocated to public non-residential investment
increased by 11.8 per cent points between 2000 and 2021.

B. Policies and Programs Directly Impacting New Brunswick’s Investment
Development
This report highlights a set of important policies and programs that have been
implemented over the years to support and boost investment. The federal government has played
a vital role and has led changes in policies and programs, whereas the government of New
Brunswick has complemented many of the federal government’s policy initiatives.
Tax Incentive
Over time, corporate tax rates have followed a downward trend. The federal andprovincial rates have decreased for small enterprises in order to reduce their tax burden and75

support their growth. After the 2008 economic crisis, the federal government introduced its
Economic Action plan that contained several programs that supported and incentives investment
Some of these programs were the business tax relief and capital cost allowance for investment incomputers and in M&E. In recent years, the federal government has continued to deliver
programs supporting investment and has focused on expanding such support for investment andproduction in green technology and manufacturing. Likewise, they implemented the Atlantic
Investment Tax Credit in 2012 to exclusively incentivize investment in buildings and M&E in
Atlantic Canada. On the other hand, the government of New Brunswick has also provided tax
benefits to support small businesses investment, as well as programs encouraging investment inventure capital funds; the province has fallen short in creating more programs to incent
investment. In effect, in comparison to the number of programs designed to incentivize
residential investment in the provinces, the number of programs for non-residential investment
has fallen short.
Investment Promotion Agencies
In the present, New Brunswick counts on two main investment promotion agencies,
ACOA and Opportunities NB. These agencies have taken an important role in helping
entrepreneurs and new investments coming into the province. Before Opportunities NB was
launched, the province only had ACOA, created by the federal government. Hence, it took
twenty-eight years to have an alternative agency, an event that could have affected the process of
attracting investment over the years to the province. In 2018, the federal government introduced
Invest in Canada, an additional agency that has added value to investment promotions in Canada.
The fact that additional agencies have been added in recent years (i.e., 2015-2021) could also
have affected New Brunswick's huge investment fall between 2008 and 2015.
Business Support Services
Services regarding business support with training and mentorship started to become
numerous in New Brunswick after 2010. In effect, since then, different centres and programs
have been launched with the involvement of the private and public sectors. To a certain extent,
this could have impacted New Brunswick's investment development between 2000 and 2010,
particularly during subsequent years after the 2008-2009 economic crisis. In addition, given thediversity of alternatives that enterprises started having in recent years, it is possible to argue that
New Brunswick's investment pickup in recent years could have partially come from the training
and mentorship of these programs to entrepreneurs and investors in the province.

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Financial Assistance
Financial assistance for investment from the federal and provincial government has
particularly been good in New Brunswick. Over the years, the federal and provincial
governments have participated in the implementation of distinctive programs. Most of these
programs have provided support to investment in small businesses, investment in innovation,
expansion, and commercialization. In recent years, according to a report from the CVCA, New
Brunswick has been situated among the provinces with higher venture capital investment and
NBIF ranked 7th as the most active venture capital firm in Canada in 2021. Overall, access tofinancial assistance has not been a problem in the province and it has not been a factor ofinvestment slowdown.
Infrastructure
Infrastructure such as the Trans-Canada Highway, the port of Saint John, Saint John
Harbour Bridge, and the Confederation Bridge are among some of the projects that haveenhanced New Brunswick’s connectivity. Most of the infrastructure projects New Brunswick has
been able to develop have been through the support of Infrastructure Canada. In effect, theprovince has benefited from the different programs introduced by the federal government over
the years to invest in local infrastructure. To date, according to Infrastructure Canada, New
Brunswick counts 838 infrastructure projects, all of them with the support of the federal
government. Whilst certainly there has been plenty of support for developing good infrastructure,on occasion, New Brunswick has failed to achieve expected results due to poor funding
management and lack of good structural programs. Ultimately, New Brunswick has not beensuccessful in expanding as much its infrastructure since the province has historically dealt withhigh-depreciated assets, an event that has forced the province to deviate funds for the
rehabilitation of these infrastructures.
Business Environment Regulations
Over the years, the federal and provincial governments have made efforts to reduce thered tape in the business environment. Back in 2004, the federal government started a plan that
focused on easing red tape, focusing on helping small businesses, introducing regulation tools forregulators, and implementing online services for business inscription. The government of New
Brunswick together with other Atlantic provinces, started to implement further measures for redtape reduction in 2015, and in 2020 when, they released a report with important regulatorychanges that have helped reduce the regulatory burden on businesses. However, regardless ofthese advancements, the structure of business regulation in Canada has remained quite numerous
over the years. In effect, nowadays every business requires issuing and renewing licenses,
permits, the inscription of companies, and dealing with changing regulations by different
77jurisdictions, thus affecting the business regulatory environment and leaving uncertainty among
investors. Despite efforts since 2015 to reduce red tape in New Brunswick attracting foreign
investments have been difficult. It seems plausible therefore then, based on all the latter, thebusiness regulatory environment could have impacted the creation of new businesses as well as
the flow of more investment into the province.

C. Conclusion
Investment in New Brunswick has weakened over the past 60 years. The province’s
investment average share in GDP fell by 10.8 percentage points between 1961-1985 and 20102021, indicates a weak investment performance and a concern for what economic performancethe province would have in the future. Whilst all components of investment have fallen overtime, the main reason behind the poor investment development is "the substantial fall of nonresidential investment in structure assets, particularly investment in the utility industry ". Indeed,
after the 2008-09 economic crisis, investment in the utility industry fell, leading the province toexperience a negative aggregate non-residential business net investment to fall.
Four out of six of the type of policies and programs analyzed in this report could havecontributed to the fall-off of investment in the province. In effect, many policies and programs
that sought to positively influence investment were introduced over the last eleven years,
meaning that before such years (e.g., 2000-2015), the province did little to nothing to help boost
its investment. For instance, before launching Invest NB in 2011 and merging it later to ONB in
2015, New Brunswick did not have any alternative agency to help promote investment in theregion. Similarly, many business support centers looking to help or train entrepreneurs werelaunched and funded by private-public collaboration since 2011. Likewise, the businessregulatory system has not changed over the years given that the old regulatory framework keeps
standing in place and new regulatory changes (i.e., fracking moratorium) keep the environment
unstable. Ultimately, on occasions, New Brunswick has failed to implement good managementof funding or structure of programs for infrastructure projects. The latter has contributed to theincapability of expanding infrastructure since the province has historically dealt with highdepreciated assets.
Between 2000 and 2010, little was done by the provincial government in New Brunswick
to deviate from the downward investment trend which contributed to the substantial fall ininvestment after the 2008-09 economic crisis. Many of the policies and programs implemented
through tax incentives or financial assistance for investment came in hand with the federal
government's help, reflecting the importance of federal support for the province. In the last five
years, New Brunswick has had a pick-up in its investment levels, an can be linked to thenotorious changes in policies and programs in recent years to boost investment. However, there78

is plenty of room for improvement and opportunities for investment in New Brunswick.
Businesses and governments should consider the following key factors:•

Businesses should consider investing in New Brunswick due to its good financial
assistance for investment. Particularly, small and medium businesses looking to expandin new markets.

•

Businesses can benefit from The Atlantic Investment Credit program offered by thefederal government, as well as numerous credit programs for investment in machineryand equipment, and renewable technology.

•

New investors and entrepreneurs could take advantage of the numerous tools andassistance offered in the province through their investment promotion agencies andbusiness support centres.

•

The provincial government should be canceled in managing infrastructure funding andimplement structural programs for the implementation of funding in new infrastructure
programs.

79

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84

Appendix
Appendix Chart 1: Total Investment Growth (Compound Annual Growth Rate), (chained dollars),
Canada and Provinces, 1961-2021

Panel A: Total Investment Growth Between 1961 and 2021
5
3.99
4
3.19

3.09

2.94
2.58

2.56

2.48

2.46
2.18

2.03

2.00

2

1

0
BritishColumbia

Alberta

Ontario

CanadaNova Scotia

PrinceEdward Island

New
Brunswick

QuebecSaskatchewan Newfoundlandand Labrador

Manitoba

Panel B: Total Investment Growth Between 1961 and 1981
8

7.61
6.64

7
6

Per Cent

Per Cent

3

4.74

5

4.13

4.07

4.06

4

3.61
3.08

3

2.77

2.02
2
0.78

1
0
Alberta

BritishColumbia

CanadaOntario

Saskatchewan

85

New
Brunswick

Nova Scotia

QuebecNewfoundlandand Labrador

Manitoba

PrinceEdward Island

Panel C: Total Investment Growth Between 1981 and 2000
4

3.67

3

2.76

Per Cent

2.50
2.21

2.21

2
1.51

1.49

1.39

1

0.75

0.69
0.44

0
PrinceEdward Island

New
BrunswickOntario

Newfoundland Nova Scotia
and Labrador

QuebecCanadaManitoba

Alberta

BritishColumbia

3.31

3.26

Saskatchewan

Panel D: Total Investment Growth Between 2000 and 2008
9

8.00
8
7.13
7
6.16
5.78

Per Cent

6

5.60

5.35

5

4.31

4.20

4
3

1.77

2
1
0
Alberta

BritishColumbia

Manitoba

Saskatchewan

QuebecCanada86

PrinceEdward Island

New
Brunswick

Newfoundlandand Labrador

Ontario

Nova Scotia

Panel E: Total Investment Growth Between 2008 and 2015
12
10.26
9

4.67
3.00

3

1.73

1.25

0.97

0.82

0.46

0
-0.66
-3

-2.68
-4.20

-6
Newfoundland Saskatchewan
and Labrador

Manitoba

Ontario

CanadaAlberta

BritishColumbia

Nova Scotia

QuebecPrinceEdward Island

New
Brunswick

Panel F: Total Investment Growth Between 2015 and 2021
12
9.27
8

5.58
3.92

4

3.03

2.88

2.18
0.49

Per Cent

Per Cent

6

0
-4

-2.63
-5.72

-8

-6.58

-12

-11.05-16
PrinceEdward Island

BritishColumbia

Nova Scotia

QuebecOntarioNew
Brunswick87

CanadaManitoba

Saskatchewan

Alberta

Newfoundlandand Labrador

Panel G: Total Investment Growth Between 2000 and 2021
5
4.55
4

Per Cent

3.28
3

2.74

2.64

2.57

2.53
2.00

2

1.94
1.32

1.16

1

0.76

0
BritishColumbia

PrinceEdward Island

QuebecOntario

CanadaManitoba

Saskatchewan Nova Scotia

Alberta

Newfoundlandand Labrador

New
BrunswickSources: Statistics Canada, Table 36-10-0099-01, and Table 36-10-0098-01

Appendix Chart 2: Total Investment spending per capita (2012 chained dollars) in Canada,
New Brunswick, and Provinces, (2000, 2008, 2015 and 2021)
Panel A: Investment spending per capita in 2000
Alberta

16,056

Sask

9,272

Canada

7,603

NFL

7,506

Ontario

7,235

BC

6,713

New Brunswick

6,333

Nova Scotia

5,819

Manitoba

5,732

Quebec

5,458

PEI

4,858
0

2,000

4,000

6,000

8,000

10,00012,000Total Investment per Capita ($ / Population)

88

14,00016,00018,000Panel B: Investment spending per capita in 2008
Alberta

24,831

Sask

14,390BC

10,818Canada10,651NFL

10,049Manitoba

8,856

New Brunswick

8,848

Ontario

8,484

Quebec

7,999

PEI

6,696

Nova Scotia

6,681
0

5,000

10,00015,00020,00025,00030,000Total Investment per Capita ($ / Population)

Panel C: Investment spending per capita in 2015
Alberta

23,055NFL

19,291

Sask

17,979Canada10,816

BC

10,427

Manitoba

10,094

Ontario

8,994

Quebec

7,251

Nova Scotia

6,896

New Brunswick

6,448

PEI

5,313
0

5,000

10,00015,000Total Investment per Capita ($ / Population)

89

20,00025,000Panel D: Investment spending per capita in 2021
Alberta

14,291

BC

13,263

Sask

11,979Canada10,404

Ontario

9,869

NFL

9,697

Quebec8,242

Nova Scotia

8,208

Manitoba

7,986

PEI

7,933

New Brunswick

7,047
0

2,000

4,000

6,000

8,000

10,00012,00014,000Total Investment per Capita ($ / Population)
Sources: Statistics Canada, Table 36-10-0099-01, Table 36-10-0098-01, Table 17-10-0009-01

Appendix Chart 3: New Brunswick’s Business Non-Residential Investment and Depreciation(chained dollars), 2000-2021

Millions of Dollars (2012 constant)

4,000
3,500
3,000
2,500

2,000
1,500
1,000
500
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Investment

Depreciation

Sources: Statistics Canada, Table 36-10-0098-01

90

16,0002012 Constant Dollars Per Capita

Appendix Chart 4: Business Spending in Structure Assets in the Information and Cultural
Industry, (constant 2012 Dollars per capita), 2000-2021
400
350
300
250
200
150
100
50
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Information and cultural industries

Linear (Information and cultural industries)

Sources: Statistics Canada, Table 36-10-0098-01

Appendix Chart 5: Non-Residential Business Investment in M&E: Trends of Industries with
Upward Sloping Investment, (constant 2012 Dollars per capita), 2000-2021

Panel A: Business Spending in M&E Assets in the Manufacturing Industry

2012 Constant Dollars Per Capita

800
700
600
500
400
300
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Manufacturing Industry

Linear (Manufacturing Industry)91

Panel B: Business Spending in M&E Assets in the Transportation and Warehousing
Industry
2012 Constant Dollars Per Capita

300
250
200
150
100
50
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Transportation and Warehousing Industry

Linear (Transportation and Warehousing Industry)

Sources: Statistics Canada, Table 36-10-0098-01

92