The largest single local employer (the coal mine) has just announced
permanent lay-offs of 2/3rds of its employees (1200 jobs and 10-15% of
the Island's GDP).   

Perhaps this group might be interested in some of the discussion which is
currently taking place about the future of one of NS's more significant

Contributions to the discussion are welcome...

Mike Gurstein

 ---------- Forwarded message ----------
Date: Tue, 30 Mar 1999 06:03:14 -0400 (AST)
From: Michael Gurstein <[EMAIL PROTECTED]>
Cc: Electronic Democracy in Nova Scotia <[EMAIL PROTECTED]>
Subject: Re: Business chooses Metro hfx over CB 19-0

About six months ago the President of AT&T Canada came to CB to meet with
a group to discuss what would make CB attractive as a call centre
location.  Call centres are a very specific type of business, but they are
highly attractive to places like CB because they employ relatively large
numbers of people and don't, for the most part require advanced training
or experience. A lot of the discussion around business going to Halifax
(or to New Brunswick) appears to be about their relative attractiveness as
a call centre location vis-a-vis CB.

The AT&T Canada Pres was invited precisely because they had just made
their decision to locate in Hfx, so he was fully aware of CB's +/-'s and
how it stacked up against Hfx and the issue could be discussed in a
non-hyped environment since his decision to locate their call centre in 
Hfx had already been made.

For him, the key reason for their choice of Hfx over Sydney (and Winnipeg
and Charlotte NC), was not the political/labour/physical climate.  In fact
he placed Sydney rather higher on most of these variables than the other
locations (physical environment/tar ponds with or without videos was not
a consideration), labour environment was an element of doing business and
was not seen as distinguishing between Hfx and Sydney, and the "political
climate" was not even a consideration.  The stable/loyal work force was a
big plus for CB. 

Rather for him/AT&T the first criteria was the size of the
population catchment area available to recruit from for their employees.
Below about 180,000 they would be unable to recruit the numbers of
employees with the skills they needed for their operation. Winnipeg and 
Charlotte were both eliminated because their call centre recruitment
ratios were already fully extended.  
The second was the availablility of those services (primarily technical)
which they would need to support their business.  A somewhat distant third
(where by the way Sydney came out ahead because of lower rents) was the
cost of doing business locally--land/rent, electricity, telephone charges
and so on.

AT&T's primary reason for choosing Hfx over CB for their 700 seat call
centre (and even over "massive government pressure to locate in CB") was
the larger population base available as an employee catchment in Hfx and
secondly, the unavailability locally of certain specialized services they
would need to support their business (he mentioned having access to local 
technical expertise in repairing the very specialized Nortel switch on
which their business relied).
I think there are very important lessons to be drawn from this for the
future of CB in it's current crisis.  

IMHO the first priority for CB, if it is to have a viable future is to
plug the current and (likely) accelerating population loss as soon as
possible and by whatever means are available. CB is currently (1996
figures) losing population at the rate of .5-.7% a year.  With the closure
of DEVCO that almost certainly will/is accelerating.

Without a sufficient population density on the Island, very quickly it
will no longer be able to support enterprises like call-centres.  In
addition there will be a rapid decline in the commercial and in the
business service and support sectors.  This will be followed very closely
by a collapse of the tax base.  Without business services even high tech
firms will have difficulty staying/locating in CB.  

This will be followed by an inability to support public amenities such as
parks and recreation and Centre 200 (the Screaming Eagles etc.).  This
will also mean an inability to maintain the school system at a level which
will attract any type of family in-migration and put the hospital and UCCB
in jeapordy.

A lot of the above is already happening just based on the chronic and
continuing levels of unemployment.

Again IMHO the only possible source of the type of intervention required
to stabilize the local population at it's current levels is Government,
probably only through the relocation of Federal or Provincial jobs to the
region.  At this time of crisis, the fact that the transfer of jobs and
their incumbents will do nothing for local unemployment is irrelevant
because unless something is done to maintain current population levels and
everything that these levels support, there isn't going to be a sufficient
population/service/institutional base left in CB to be anything other
than a retirement home for those who won't or can't leave the region and
for outside retirees and one month a year vacationers.  

Mike Gurstein

On Mon, 29 Mar 1999, John Shaw wrote:

>Jim Peers wrote:
>> The March issue of Atlantic Progess lists the top 40 fastest growing
>> businesses in the Region.
>> Metro have about 19 and CB 0.
>> Is that pure politics? Or is that where a new business really chooses to
>> locate?
>> Jim
>Probably.  Let us not forget what people  see of  us: The well publicized
>"worst toxic site in Canada",  entrepreneur burned out on Kings Road,  the
>highest occupancy taxes in the province,  inept  political interference in
>the economy, and a very poor image of local unions.  Contrast that with the
>image of Metro.  What would be your pick?
>Consider also the spouses of the potential investor.  Do they want to move
>to an area they perceive as being so unfriendly to business?  Do they want
>to raise a family in an area where the only hope of a future is seen as
>being elsewhere?  Do they want to buy food from a store built on "that toxic
>ECBC, UCCB, TAG, and many others have tried to set the record straight and
>have promoted the many positive aspects of locating here.  One load of horse
>manure  on the doorstep of DEVCO headquarters, with coast-to-coast news
>coverage, reverses months of good news.
>Perhaps we could start a business in training people to shoot themselves in
>the foot.   At least the marketers would not have to create an image.  This
>erroneous image is already well established.
>We need private sector initiative unhindered by politicians and/or
>bureaucrats, a decent capital gains break for investors, reasonable taxes
>and regulations, political leadership that will tell the truth for a change,
>a redirection of the bulk of government funding away from two industries to
>infrastructure that supports a variety of endeavors, and a shift of
>responsibility  for attracting business away from three levels of government
>to one local  private sector group.  Then some new businesses would choose
>to locate here.
>John Shaw

Michael Gurstein, Ph.D.
ECBC/NSERC/SSHRC Associate Chair in the Management of Technological Change
Director:  Centre for Community and Enterprise Networking (C\CEN)
University College of Cape Breton, POBox 5300, Sydney, NS, CANADA B1P 6L2
Tel.  902-563-1369 (o)          902-562-1055 (h)        902-562-0119 (fax)
[EMAIL PROTECTED]         ICQ: 7388855

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