The sharp rise of craft breweries in Fredericton and New Brunswick has been an exciting development over the past decade. By getting ahead of other jurisdictions, New Brunswick has been able to build a reputation as a premier location for craft beer, cider, wine and even mead. Our local producers - more than a dozen in Fredericton alone (and more than 30 across the province) - have done a remarkable job of producing high-quality products, building recognizable brands and carving out space in an industry traditionally dominated by large players. This has been no small feat and a testament to their entrepreneurial spirit and passion for their products.
While the craft brewing industry is making an undeniable impact on New Brunswick’s economy, there is potential for so much more. To date the provincial government’s approach to the industry can be characterized as one of a tax strategy. The Fredericton chamber echoes the call by stakeholders and industry leaders to move beyond this and adopt an economic development strategy to unlock the industry’s potential long-term benefits and growth.
Craft brewing supports many other industries, including several specifically mentioned in the Government of New Brunswick’s Economic Growth Plan - agriculture, manufacturing, professional services, wholesale trade and more. If you are to include the obvious tourism potential we can add accommodations, food services, retail and all of the other spin-off benefits resulting from increased tourism traffic in the province.
The industry has been quite clear that in order to grow this opportunity, regulatory and policy changes are necessary - which leads us back to focusing on an economic development strategy. Specifically, they are proposing three tweaks that could have a major impact to allowing the industry to grow organically:
- Allow craft producers to sell products from fellow producers;
- Make markups more consistent; and
- Give craft producers control of retail pricing in non ANBL locations.
I’m willing to bet that many of you reading this are surprised that these changes are needed at all. For an industry that has lifted itself up by the bootstraps and flourished despite a regulatory regime seemingly more interested in maintaining the status quo - one may assume the government would be bending over backwards to at a minimum get out of the way of growth, if not actively assist. Ignite Fredericton estimate these changes could mean in ten years that:
- Industry increasing its market share five-fold;
- Annual taxes and fees to the government increasing four-fold; and
- The annual indirect and induced impacts multiplied 17 times over.
This last point is where we really see the benefit of a shift from a taxation-focused strategy to an economic development-focused strategy. An economy really is an ecosystem with symbiotic, interdependent parts. Almost everything is in place in New Brunswick to make it happen - we have built expertise throughout New Brunswick; the local and domestic market is growing; we have over 5.7 million hectares of arable land, but only 5% is currently in production (not to mention that NB offers the most affordable land and lowest-cost agriculture entry in the country); and we already have eager entrepreneurs keen to enter the industry - despite the challenges. Now they need government to fully come on side. When businesses speak about the government not being able to create jobs, but rather create the conditions for growth, this is exactly what we are talking about.
The government states in its growth plan:
“A key part of the New Brunswick Economic Growth Plan involves implementation of an economic development mandate within each government department. Each will help determine potential growth opportunities and build a plan to ensure it is developed in a timely and effective manner.”
An ‘economic development mandate’ requires an economic development strategy through an economic development lens. Maximizing tax revenue at the expense of growth is the very antithesis of this laudable idea. We have had a head start in New Brunswick growing the craft brew industry thanks to our local entrepreneurs but time is running out for New Brunswick to claim this space and make the craft brew industry one of the top-of-mind features when people think about our province. In other words, this could be something we’re known for beyond our borders. We could use a few more of those.
Krista Ross is CEO of the Fredericton Chamber of Commerce. With more than 950 members, the Fredericton Chamber of Commerce is one of Atlantic Canada’s largest chambers of commerce. A dynamic business organization, the Fredericton Chamber of Commerce is actively engaged in policy development that affects the competitiveness of our members and of the Canadian business environment. It’s vision is Community Prosperity Through Business.