Will Sears Canada's sinking ship cause an inescapable eddy for New Brunswick's premier?
Sure, TransCanada Corporation's announcement about the death of their Energy East Pipeline (EEP) bid is a MEGA disappointment for New Brunswick Premier Brian Gallant. Yet it's the national news of Sears Canada's bankruptcy, forced closure and liquidation of all its retail operations (putting over 12,000 employees out of work and stiffing them of their pensions and retiree health plans) that may have the biggest impact on the N.B. premier and throw egg on the face of the province's high-profile economic business partnership incubator, Opportunities New Brunswick (ONB).
Sears Canada's folding is sad news for almost 600 workers at the recently opened retail call centres in Edmundston and Saint John, N.B. — a situation that has business analysts and political critics wondering WTF N.B.'s economic development strategists were thinking. The fate of the two centres (set up in partnership with Sears, ONB and the Government of New Brunswick) became pretty clear as Paul Fudge, chief financial officer and vice-president of deal structuring with ONB, tried to minimize news of the damage, concluding that the deal with Sears "looked like a good plan at the time."
Bear in mind that this embarrassing economic development fiasco is small potatoes in comparison to a list of previous major SNAFUs contributing to N.B.'s reputation as a province facing incurable economic malaise. But the slow, lingering death of Sears Canada does not help to deflect the attention from just how questionable this call-centre partnership was, inked in haste last winter.
What level of analysis and due diligence was undertaken before green lighting this dubious business venture? Clearly not enough. Taken together, analysis by the Wall Street Journal, Financial Post, Business Insights/Insiders News, as well as the words of a number of former Sears C-suite executives, all helped articulate how the writing was on the wall for Sears Holdings. These warnings gave advance indication of the precarious and poor investment portfolio facing Sears stockholders on both the S&P and TSX in 2014, 2015, 2016 and 2017.
Can New Brunswickers find comfort and assurance in such a panicked approach to finding lifeboats for these unfortunate workers?
In a province, and for a provincial political party, that's still haunted by the $70-million Atcon scandal, it would appear the idea of due diligence equates to high-level provincial strategists sitting around a ouija board, all clustered together in a dark room, with eyes shut to Wall Street and Bay Street realities.
New Brunswick's ONB minions are now frantically scrambling to ink smaller call centre partnership deals to find job opportunities for the almost 600 false hopefuls destined for unemployment once Sears shuts the doors in Edmundston and Saint John. Upon reflection, can New Brunswickers find comfort and assurance in such a panicked approach to finding lifeboats for these unfortunate workers?
There's a strange irony to this developing N.B. boondoggle. Consider that it was only January 2017 when the premier and Sears officials were staging photo-ops and holding press conferences — at a time that N.B. was just climbing out of a four- to five-year slump and reporting the worst unemployment statistics (double-digits) in Canada.
Indubitably, some will state that Sears Canada's closure does not reach the same level of disappointment that came with the demise of Energy East. Or that the failed Sears partnership did not carry the same level of risk and fiscal ineptitude as the actions of former, now disgraced, Premier Shawn Graham, who saddled N.B. taxpayers with an unjustifiable $70-million debt as a result of the Atcon affair.
The Sears Canada news may make it that much harder to hold the public's confidence when election day finally arrives.
However, in a province with too long a history of agonizing economic uncertainties, it's safe to speculate that once the Third Session of the 58th Legislative Assembly reconvenes on October 24 the Progressive Conservatives — and their leader, Blaine Higgs — will be eager to take political advantage by using the Sears Canada fiasco, Atcon scandal and the Energy East pipeline's demise as evidence that Premier Gallant's leadership and his Liberal government's business and policy decisions fall under a pooling economic development vortex of "denial, deflection, distortion and deception."
Meanwhile, regional media pundits speculate on the possibility of Gallant calling an early election in his fourth year. A recently released poll currently favours Gallant for the premier's job, but it will be difficult for him to shake the fallout from the Atcon, EEP and Sears messes — putting at risk any comfortable lead he may have enjoyed up until now.
For the youngest premier in Canada — and one who apparently cannot seem to discern the obvious plunge of a North American retail dinosaur — the Sears Canada news may make it that much harder to hold the public's confidence when election day finally arrives.
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