Archived Writing
From May to September, 2025, I attempted a series of experimental blog posts on the theme: The World Needs More PEI .
While I will leave it for others to judge, this was also a bit of a creative writing exercise on how to address complex topics in an accessible and conversational manner.
Some key learnings:
Creating regular blog posts - perhaps more the weekly pacing thereof - proved a challenge to maintain as a working professional, husband, and ringette Dad.
Although my stated intention with the blog posts was to spark dialogue rather than to advocate or advance an opinion, the format seemed to invite engagement to that end.
While blog posts are a natural avenue for advocacy and opinion, that is not my aim - and so, my pause and pivot.
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Economic Productivity and a Seaside Stroll
Walking the Dog – Part 1
I took my dog for a walk and ended up writing a blog post about economic productivity. Ok, so what does economics have to do with walking the dog along Prince Edward Island’s beautiful north shore? In one respect, not much – at least in that particular moment.
But in a broader sense, my being able to enjoy that walk with our new chocolate lab was made possible by a complex web of economic inputs and outputs, some of which are unique to PEI.
Allow me to explain. . .
Total Factor Productivity
First, bear with me for a moment as we need to touch on some basic economics. Trust me, it’s worth it (and we’ll get back to the beach soon). Consider the following foundational concept: the total factor productivity (TFP) function. This widely used economic model describes the relationship between basic inputs—labour and capital—and the resulting output: something of value.
Each input is called a factor. In addition to labour (“L”) and capital (“C”), there’s a third factor – essentially, a catch-all term for “novel and effective ways of deploying labour and capital.” For reasons perhaps known only to economists, this third factor is typically labelled “A.” And finally, the resulting output is typically labelled “Q” – as in the quantity or quality of value produced.
Here’s the simplified version of the equation (for the quant purists, and in honour of my late father and mathematician Ivan Dowling, logarithmically transformed and presented in additive terms):
Total Factor Productivity Function L + C + A = Q
That’s it. No more math, I promise.
Here’s the punchline:
We generate things of value (Q) through a combination of human effort (L), investment in tools and infrastructure (C), as well as applied innovation, management, and creativity (A).
Valuable outputs include not only private goods, but also public services and infrastructure.
People earn income (wages or returns on investment) in exchange for generating these things of value.
The more valuable our outputs, the greater our incomes tend to be.
In turn, higher incomes provide greater capacity to purchase goods and services, and to fund supporting public infrastructure.
And ultimately, having greater access to valuable goods, services, and infrastructure tends to raise our standard of living.
Okay – enough theory. Let’s get back to the dog.
Walking the Dog – Part 2
My decision to hop in the car and drive thirty minutes (with a coffee stop, naturally) from Charlottetown to the coast for a beach walk was spontaneous. It was easy and fun. It was, in many ways, a quintessential Island quality-of-life moment.
But let’s pause and consider just a few of the underlying factors which made this seemingly effortless adventure possible.
Public policy initiatives helped protect our approximate 3,000 km stretch of coastline through land use planning that prioritizes public access and environmental preservation.
My salary covered the cost of the trip, and yes, also our recent canine addition. Local contractors designed and built the roads and bridges to get me to my destination safely and efficiently.
My jacket (note to self: not enough layers for mid-May winds), my coffee, and even the dog’s leash (found a nice one online) were all purchased through businesses supported by global supply chains, modern communication technology, and competitive markets.
More generally, I am also the beneficiary of extensive investment in healthcare and education infrastructure – foundational economic development supports established through shared Canadian values – which helped accord me the physical and financial means to take the journey.
In short, the ease and self assurance with which I could enjoy a brief trip from Charlottetown to the coast was enabled through generations of strategically coordinated investment in labour and capital.
Yes, I could have just walked the dog around the block. And yes, there are legitimate critiques of our modern consumer habits – do we really need the latest high-tech outerwear, an electric car, and a latte just to walk the dog?
Fair enough.
But the truth is, I value these conveniences. Imagine for a moment life in Prince Edward Island without modern transportation, land use regulation, healthcare – or indoor plumbing for that matter (which, for the record, I was grateful to access just before leaving the house).
Without the benefit of these economic development advances, gifted through generations of investment, hard work, and applied innovation, I likely wouldn’t have made that spontaneous trip. And I think my dog and I would have missed out.
Home from the Beach
I’m home from the beach and finishing my first-ever blog post. The dog seems unimpressed. She’s not particularly interested in economic theory or total factor productivity. For her, quality of life is simple: belly rubs (not L + C + A = Q).
And she’s right, in her way.
To be sure, standard of living – and certainly quality of life – cannot be fully explained by a productivity function.
But taking the time to reflect upon the complex arc of the Island’s economic development can not only assist us to appreciate what we have, but can also help us imagination where we can go next.
And where we go next matters – because the world, I believe, needs more PEI.
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A is for Awesome
Spring Golf
Tomorrow is my first round of spring golf. It’s never pretty – and definitely not awesome. It usually begins with a hesitant tee shot, followed by a series of earnest attempts at finding the target. The result? Underwhelming. I’ll then repeat the process for 17 more holes. Finally, on the drive home, I’ll try to convince myself that this unseemly act of self-flagellation has at least laid the foundation for more successful rounds ahead.
In a nutshell, that’s spring golf.
My first week of blogging felt eerily similar. After a tentative start – fumbling around WordPress to post Blog No. 1 – and multiple underwhelming attempts at producing something resembling an infographic, I managed to complete my first round of what I’ll now call social media spring golf. And here I am again, with blog post No. 2.
Creative Inspiration
Technical foibles aside, my efforts this past week did yield one creative breakthrough – thanks to a newly minted Hedgerows follower.
(Side note: Should we start referring to Hedgerows followers as Hedgies?)
A big thank you to Cate Proctor – author, arts advocate, and fellow PEI enthusiast—who offered the perfect label for (A), that elusive residual variable in the beloved (at least by economists) TFP function: L + C + A = Q.
Per Cate’s suggestion, (A) shall henceforth stand for “Awesome.“
Armed with creative inspiration and this newly minted moniker for (A), I proceeded to crank out – actually: crank, fix, re-crank, and then re-re-crank – a couple of TFP reference documents. I trust you’ll find them of merit.
Behold, the thumbnail version:
[See Infographic, used as supporting material on morepei.com site]
And for those with a preference for brevity – rather than navigating multiple slides, each lovingly adorned with polysyllabic, hyper-loquacious prose – here’s a one-page infographic version:
[See Infographic, used as supporting material on morepei.com site]
Who knows – maybe my next foray into tech-enabled blogging will involve French-language editions or audio file versions of these posts. By the way, I’m also thinking Fridays might be a good rhythm for weekly updates.
Conclusion
With Blog post No. 2 – featuring full-colour folio creation and fledgling infographic attempts – I hope I’ve helped set the table for deeper exploration of PEI’s economic development potential. In that spirit let’s consider this week’s TFP refence materials a value-added appendix to blog post No. 1.
And so, at the risk of triggering mass TFP-induced PTSD, I will conclude by offering some thought-provoking questions. Whether you’re in business, the non-profit sector, or public service, these are well worth pondering:
What is the need (market/community/public interest) to be met?
How is that need currently being met?
Are there different or better ways to meet it? What are they? How might they work?
What is the current output? How is it measured – and how easily or reliably can it be?
What effort (e.g., employment hours) is currently required to produce that output?
What’s the output per hour of work?
What capital is invested per unit of effort?
Would additional capital increase output? How? Why? Why not?
What’s the current labour profile (skills, health, demographics, financial stability)? Can it be improved? How?
Can labour and capital be deployed or allocated differently? More efficiently? How?
What are others (peers, competitors) doing? Why are they doing it? What can we learn?
What new approaches could increase value per unit of effort? How? Why? Who could make it happen (inside or outside the organization)?
What broader systems of input and output help – or hinder – our ability to meet the need?
These are not easy questions. And the answers – let alone their implementation – can be hard to come by. That’s what makes productivity gains so elusive.
But for anyone committed to seeing Prince Edward Island fulfil its development potential, this kind of thinking is essential.
Because in my view, the world needs more PEI.
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“That’s Real Gross!”
An Impassioned Panel
Picture this: a sharply dressed panel of economists (Trivia Alert No. 1 – “panel” being apparently the correct collective noun for economists), sporting their finest suits and matching bow ties, calculators in hand, marching up Great George Street. (Trivia Alert No. 2 – for those from away, that’s the same historic route taken by the Fathers of Confederation en route to the 1864 Charlottetown Conference.)
And as they marched, they were chanting: “That’s Real Gross! . . . That’s Real Gross!”
One might reasonably wonder what had this otherwise mild-mannered group so riled up. Their grievance? Yet another public announcement of GDP growth without any explanation that the figure was “real” GDP – not “per capita.”
Might this well-intentioned – albeit imaginary – panel of economists have overreacted? Sure. But were they nevertheless sincere in their convictions? That would be a hard yes.
Real vs. Per Capita GDP
GDP is another one of those fundamentally important economic concepts – but let’s not get too bogged down in the math.
For our purposes, GDP stands for the total value of goods and services produced in an economy. From a different perspective, it also reflects the total amount spent by end consumers – individuals, businesses, and governments alike.
Want to know if – and by how much – a provincial or national economy has grown? GDP is a useful tool for that.
Real GDP simply refers to nominal GDP growth adjusted for inflation. So, if the economy grew by 5% and inflation was 2%, real GDP growth would be 3%.
But here’s why our well-dressed panel of economists were getting hot under the collar: Just because real GDP is growing doesn’t mean people are necessarily any better off.
Why? Because if an economy adds more people – who then produce and consume more – the overall GDP rises. But if GDP grows slower than the population, then GDP per person actually falls. That’s where per capita GDP comes in.
Per capita GDP is real GDP divided by the total population. It’s a better indicator of whether income and prosperity are improving at the individual level. If GDP rises but population rises faster, per capita GDP falls—and we’re not, in fact, better off.
That’s what our economist friends were so fussed about. They wanted us to focus on per capita GDP growth—not just real.
So how does a small province like PEI grow its per capita GDP? You guessed it: productivity.
But before we join the bowtie brigade, let’s check our assumption: Is per capita GDP really a perfect proxy for quality of life? Spoiler alert – it’s not. Both real and per capita GDP have blind spots. For example:
Externalities – Think pollution, crime, environmental degradation: indirect costs that GDP doesn’t capture.
Non-monetary work – Consider unpaid caregiving, volunteer work, and barter transactions: none of these show up in the numbers.
Quality improvements – Life-changing innovations (think anesthesia, antibiotics, or smartphones) improve quality of life, but GDP struggles to capture their true value.
Still, despite its flaws, higher per capita GDP is strongly correlated with better outcomes – higher incomes, improved healthcare and education, and stronger infrastructure.
So yes, our impassioned economists had a point.
Trivia Alert No. 3
Let’s dig into a few tasty GDP trivia bites, courtesy of StatsCan:
2024 GDP Per Capita Growth
PEI led the country in per capita GDP growth at +1.6% (Note: Real GDP growth was +3.6%)
Followed closely behind by Newfoundland & Labrador and Nova Scotia at +1.5% and +1.2%, respectively.
By comparison, Manitoba, Alberta, BC, and Ontario all saw per capita GDP declines of -1% or more.
Nationally, Canada’s per capita GDP declined by -1.4%.
2024 Per Capita GDP Levels
Despite PEI’s gold star winning growth, we still rank near the bottom nationally in per capita GDP at $47,288, just ahead of Nova Scotia at $42,276.
Alberta leads the pack at $81,639, followed by Saskatchewan ($64,586) and British Columbia ($54,748).
And here’s the rub: Unless PEI sustains relatively higher growth than leading provinces, that gap isn’t going anywhere.
Parting Questions
Armed with a primer on per capita GDP and a few key stats, here are some questions worth pondering:
What should Islanders expect – or aspire to – in terms of per capita GDP? Compared to other provinces? Compared to other countries? Why? How could be achieve that goal?
How did PEI achieve its 2024 real and per capita GDP growth rates? Are they sustainable? Sufficient? Why?
Did that growth actually improve Islanders’ quality of life? How would we know?
Why did Canada’s per capita GDP decline in 2024? Was this an anomaly? Does national per capita GDP matter to PEI? How?
Conclusion
These aren’t just trivia questions. PEI’s per capita GDP potential is no trivial matter.
While our bowtie-clad panel may be imaginary, their intended message is not. Islanders should care – deeply – about productivity, prosperity, and how per capita GDP fits into both.
We owe it to ourselves, and to future generations, to close the gap compared to our peers – to build both a stronger economy and a higher quality of life.
Because, in my view, the world needs more PEI.
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Morons, Oxymorons, and Public Service Productivity
The word moron comes from the Greek adjective moros, meaning “slow, dull, foolish, stupid—or just plain silly.”
That definition crossed my mind more than once while contemplating whether to write a public blog post about public service productivity. . . while still gainfully employed in the public service.
And yes, I’m aware that, to some, the phrase public service productivity may sound like an oxymoron. (Fun fact: oxy-comes from the Greek oxus, meaning “sharp” or “keen” – so when combined with moron, oxymoron literally means a “sharply foolish” or “cleverly stupid” statement. Which, ironically, makes it an oxymoron in and of itself.)
And so it begins. . . my rhetorical attempt to convince you that public service productivity need not be an oxymoron. . . and that I, perhaps, need not consider myself a moron for writing about it.
“Who Cares?”
Economic discussions are often framed in private sector terms – business growth, earnings, consumer spending, and so on. The public sector, if brought up at all, tends to be acknowledged (almost begrudgingly) as also having an impact on economic growth and productivity.
If I were to draw an analogy, the public sector might be likened to the flossing routine of dental hygiene – a necessary but regrettable supporting feature. Others might go further, suggesting it’s more like halitosis – best avoided or, at the very least, minimized.
But before we dive into the floss-versus-halitosis debate, here are a few important points to chew on:
The public sector is often the largest employer in developed economies. For example, with roughly 290,000 employees, the federal public service is Canada’s largest single employer.
Government spending makes up a significant share of GDP. In PEI, the services sector comprises almost 75% of total GDP, with the provincial public service accounting for nearly one-third of that.
Unlike private businesses we can choose to frequent (or not), the public service holds a monopoly on essential services – and we all have to pay taxes.
So whether you think of it more as dental floss or bad breath, the public sector is not only unavoidable – it’s one of the most significant parts of our economy.
“What About the Oxymoron Part?”
Okay, we’ve established that the public service is economically significant. But how does productivity fit in?
The short answer (in an overly long compound sentence): Public sector productivity matters – a lot – to all of us; but it’s complicated, and we’re only beginning to understand how to measure it – let alone improve it.
Believe it or not, because it’s so difficult to quantify (e.g., what’s the dollar value of a cleaner environment, or a well-crafted policy?), the traditional approach has simply been to total all input costs and declare that equal to the output. By definition, this assumes zero productivity gains. Ever.
Yes, that seems. . . moronic.
But to be clear, that approach wasn’t devised by morons. It reflects just how complex public sector outputs are to measure. Exceptions exist (e.g., number of licenses issued, kilometres of road paved), but many outputs defy simple metrics.
And lest you ever even in doubt, there are many people much smarter than me – around the world -working to build better models (If you really want to geek out, Google “public sector productivity” and peruse the latest OECD, IMF, or World Bank reports on the topic).
As for improving productivity – well, that’s no walk in the park either.
A Thought Experiment
Imagine you’ve been appointed Head of Productivity Improvement for one basic public service: Access to Justice.
You start sensibly enough: let’s improve effectiveness (achieving the intended result) and efficiency (achieving it with fewer resources). You set an initial goal: increased access to legal representation.
Then the questions start piling up:
How and by how much? Free access for all? Subsidized for some? Based on income?
Who delivers the service? Private contractors? Public employees? A hybrid model?
What’s the budget? Should there be a co-pay system?
What’s the hourly labour cost? Should it match private sector rates? How would that affect labour supply—and the budget?
If you try to serve more clients per hour, how does that affect quality? Does it align with your goal—or undermine it?
More access = more court demand. How do you fund and staff that? What about judicial independence?
Are incarceration rates part of the output goal? Should they go up? Down? Who pays for that?
What about access to civil courts? Administrative tribunals? Federal courts?
What about back-end services like HR, finance, procurement, and labour relations?
What if the government changes? Or even just the Cabinet? Or there’s a departmental reorg?
How do you measure all this? How do you connect this one output to all the others?
And on… and on… and on.
The sheer complexity of public service delivery can be dizzying. It’s no wonder economists defaulted to counting inputs as outputs. Without modern computing power, anything else may have seemed. . . well, moronic.
But We Have to Try
That said, just like in the private sector, we must improve public sector productivity. In fact, given the size of the public sector in our economy, it’s arguably more important that we do so.
When you zoom in to the “micro” level – individual programs and departments – progress can seem more feasible.
Take a paper-based licensing process, for example. Replacing it with an always-on, online licensing platform is a complex and costly transformation. But when done well, it can produce quantum leaps in productivity – for both the public service and the broader economy it serves.
Conclusion
Public sector productivity is definitely not an oxymoron. It’s a necessity – for Canada, for PEI, and for all levels of government.
Yes, public sector innovation is real. Maybe it’s not yet happening fast enough or at the right scale—but it is happening. And when accomplished the right way, it works.
And make no mistake: Gen Z – and whatever generation comes next – will demand nothing less than full digital transformation of public service delivery by the time they retire.
As is often stated, Canada has a productivity problem, and Prince Edward Island shares that challenge, albeit with some unique constraints and opportunities as a small island province.
Like every Canadian, Islanders deserve a more productive public sector – not just for its own sake, but because of what it makes possible: better services, a stronger economy, and a higher quality of life.
It’s not moronic to talk about it – and it’s certainly not moronic to pursue it.
Because, in my view: The world needs more PEI
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Free Beer
2012
Gerard Comeau decided to take his gold-coloured Honda Accord across the bridge from northern New Brunswick to Quebec for a good old-fashioned Canadian beer run.
To be precise: he bought 354 cans of beer and three bottles of liquor for himself and a few buddies.
The problem was, the New Brunswick cops were watching his every move. They eventually stopped him on his way back home, confiscated his booze, and fined him $240 for exceeding the allowable limit of 16 cans of out-of-province beer (that was the 2012 rule).
Gerry decided to challenge the ticket in court – in what has since become known as the “free beer” case.
He won.
The lower court ruled that the New Brunswick law violated section 121 of the Constitution Act, 1867, which says that goods produced in one province “shall… be admitted free into each of the other provinces.”
Then he lost.
The Supreme Court of Canada overturned the ruling, deciding that a provincial law can restrict trade — as long as its primary intent wasn’t to do so. In other words: when the Fathers of Confederation wrote “free” in section 121, they didn’t really mean free trade among provinces.
1864
This reminds me of that SNL skit where Nate Bargatze plays George Washington (circa 1776), rallying the troops with a vision for a new free nation.
But in this version, I’m picturing Sir John A. Macdonald at the 1864 Charlottetown Conference (as an aside, the delegates did enjoy quite a lot of beer while there), rallying his fellow founders with a vision for interprovincial free trade:
“Gentlemen, in this new Dominion, ‘All Articles of the Growth, Produce or Manufacture… of any one of the Provinces… shall, from and after the Union… be admitted free into each of the other Provinces.’”(Bargatze as Sir John A., reciting what would become section 121)
“So, Sir — will we be able to visit another province, buy beer, and bring it home?”(Mikey Day as Darcy McGee)
“Yes, gentlemen – beer… and even eggs, milk, and cheese… shall all be admitted free into each of our provinces.”(Bargatze as Sir John A.)
“As much as we want – and at market prices, Sir?”(Bowen Yang as George-Étienne Cartier)
“… If only it were so simple.”(Bargatze as Sir John A., hand on Yang’s shoulder)
2025
Section 121 of the Constitution Act, 1867 was originally meant to counter the negative effects of U.S. trade protectionism.
Now it’s 2025. Section 121 still says the same thing. We’re in another trade spat with the U.S. And we’re still talking about how to lower interprovincial trade barriers – as a domestic bulwark against North-South protectionism.
Trade war or no trade war: reducing interprovincial trade barriers just makes good economic sense.
Some provinces have already done great work on this front. In 2013, British Columbia, Alberta, Saskatchewan, and Manitoba formed the New West Partnership – a regional trade agreement.
If Atlantic Canada were to achieve similar progress, the region could, by some estimates (see for example, https://ppforum.ca/policy-speaking/free-atlantic-unlocking-regional-growth/) a $500 million boost in real GDP – roughly a $410 per-capita gain for PEI alone. That’s significant – and well worth pursuing.
The gains from true full free trade across the Atlantic provinces would be even bigger: an estimated (see above) $14.7 billion increase in real GDP – and about $12,600 per capita in PEI.
But is truly “free” trade within Canada – or even the Atlantic region – achievable?
Possibly. But to (fancifully) quote Sir John A.: “If only it were so simple.”
Here are a few of the tricky bits:
The Fathers of Confederation gave provinces jurisdiction over “Trade and Commerce.” The federal government can’t just legislate away all provincial barriers. The provinces and territories have to work it out themselves. (Time for another Charlottetown Conference, perhaps?)
Harmonizing provincial regulations takes real care and collaboration. The goal is to make things seamless — while maintaining appropriate standards and protections for all. It can be done. (For example: you can get provincially licensed as a stockbroker to serve clients in every province and territory in Canada, with essentially one application, and based on the same rules and standards – we figured that out years ago).
Attempting to re-design existing supply management systems can have unintended consequences. Consumers, manufacturers, distributors, fishers and farmers are all affected in different ways. Careful deliberation (perhaps with some free beer) is warranted.
Finally, what did the Fathers of Confederation actually mean by “free”? Did the Supreme Court get it right in Gerry’s beer case? Why? Why not?
The answers to these questions are not so simple. And we’re still trying to sort them out in 2025.
Conclusion
So, what did Gerry want – other than, well – beer?
I don’t think he was after free beer. I also doubt he was too worried about the finer points of the division of powers under the Constitution.
Most likely, he just wanted to enjoy life in New Brunswick, travel between provinces, and do simple, Canadian things — like going on a beer run.
Our provinces can – and should – retain their powers to regulate trade and commerce, while ensuring all Canadians have safe, affordable access to goods and services. They should also do so while striving to protect local and regional interests.
All these things can be true. It just takes effort – in the spirit of cooperative federalism (by the way- is a uniquely Canadian thing). I suspect that’s close to what the Fathers of Confederation had in mind.
It’s in Prince Edward Island’s interest to work with other provinces to reduce interprovincial trade barriers. It’s also part of our shared constitutional responsibility – to promote safe, accessible, and affordable commerce for all Canadians, while protecting local priorities.
Doing so can raise our standard of living and enrich our unique Island quality of life.
It will take work and commitment. But it’s worth the effort.
Because, in my view: The world needs more PEI.
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Back to the Future — Part 1
Flux Capacitors and Future ValueAccording to Dr. Emmett Brown (a very animated Christopher Lloyd), explaining flux capacitor technology is pretty straightforward: once the stainless steel body of the DeLorean hits precisely 88 miles per hour, its nuclear-powered electrical current is channeled through a Y-shaped tube (the flux capacitor), creating a “flux dispersal” effect. This generates enough energy to disrupt the space-time continuum. Thus – time travel.
Huh?
Sometimes, I think corporate finance folks sound equally delusional when trying to explain investment topics. Ask your stereotypical, spreadsheet-obsessed analyst to value an investment, and they might lapse into a Rain Man-style trance: “The value of any investment is the present value of its expected future cash flows… yeah… like financial time travel… pretty straightforward… ten minutes to Wapner…”
In this three-part series, I’ll do my best to avoid that fate – while explaining certain investment topics and other time-travel-adjacent concepts as they relate to something I care deeply about: Prince Edward Island’s economic development potential.
Back to the Future – Part 1 focuses on government debt – specifically: how much is too much?
Spoiler alert: it depends on how much future economic growth that debt helps to generate.
Government: Why It Exists, and What It Does
Full disclosure: I work for the Government of Prince Edward Island. I’m a public servant, and my salary comes from public funds. So yes, my perspective is shaped by that experience – but I’ll do my level best to speak independently, fairly, and objectively on the topic.
Let’s start at the beginning: why do governments exist?
In short: because we’re better off with government than without – especially the kind that upholds free and democratic societies.
Don’t take my word for it. Ask any recent Canadian immigrant from a failed state – Somalia or Haiti, for example – what life looks like without a functioning government. I doubt many would recommend it – not even to their worst enemy
I am fortunate to live in a province and a country with basic functional public democratic institutions. I hope my family never experiences otherwise.
So, what do governments actually do?
At the most basic level, democratic governments have one job: to serve the public interest. That’s not the same as serving individual interests. (Case in point: the parking ticket I got this week. Totally my fault. I got distracted in a meeting conversation and forgot to top up the HotSpot app.)
The public interest means things like the rule of law, clean water, safe roads, and reliable public infrastructure. These are things we ask government to provide – because they’re difficult or ethically fraught to provide privately.
How Do We Measure “Public Interest” Outcomes?
There’s no simple answer. This is one reason why measuring public service productivity is so tricky. At best, economics gives us only a fuzzy and incomplete picture – like trying to tune into CBFT (remember that illusive “third” pre-cable French-language channel?) on a rabbit-ear antenna.
Still, economic measures like GDP (especially GDP per capita) can offer a useful proxy. They’re a bit crude in describing the human condition, but correlate reasonably well with quality of life differences among differing economies. Think of GDP measures as the rabbit ears of economic analysis – on their own, they can’t offer the whole picture, but they’re essential for better reception.
Government Debt: How Much Is Too Much?
Government essentially gets its revenue from taxes and user fees, so why not just rely on that to balance the books and avoid debt altogether?
Because in practice – and in theory – there are good reasons why governments should carry a certain level of debt. Here are but a few:
1. Cash Flow Complexity
Governments are large, complex organizations. Their revenue and expense cycles don’t always line up neatly. Short-term credit helps manage that mismatch.
2. Fairness Across Generations
Large capital projects (like bridges, schools, or water systems) benefit multiple generations. It makes sense to spread the cost over time, rather than make today’s taxpayers foot the entire bill.
3. Economic Stabilization
During economic downturns, tax revenues fall while public spending often rises (e.g. on social assistance or infrastructure). Borrowing helps smooth out the bumps, providing stability and cushioning hardship.
For all these reasons – and more, government debt isn’t inherently “bad.” The better question is: how much is too much?
Enter: Debt-to-GDP
Here’s a shocker : Governments borrow a dizzying amount of money – and often more of it each year.
To keep from spiting out your coffee, rather than focus on the total dollar amount, its better to track government debt relative to the size of the economy. It’s the best way to measure sustainability.
According to TD Economics (and no, I haven’t secured a TD sponsorship – yet), PEI’s net debt-to-GDP ratio is currently 29%. As of fiscal year 2024/25, PEI’s net debt was $3.04 billion (Yep – with a “b”), while the province’s GDP was $10.4 billion.
So, is 29% good, bad, or just right?
The Goldilocks Zone
I don’t know what PEI’s ideal net debt-to-GDP should be. I also imagine that if we asked three different economists, we’d get three compellingly different answers (something like lawyers and our legal opinions).
Here’s how PEI compares to other provinces (rounded to the nearest %) based on FY2024/25 budget data compiled by RBC Economics (Nope – no lucrative sponsorship deal there either):
AB (8%) – SK (15%) – BC (21%) – NB (25%) – PE (29%) – NS (34%) – ON (37%) – MA (38%) – QC (39%) – NL (44%)
Let’s assume PEI’s “goldilocks” range is somewhere between 15% and 45%. Above 45%? Hit the panic button. Below 15%? Maybe we’re being too cautious.
If, for example, we accept 29% as “just right” (that is, we decide we want to keep it there), then we would need to ensure our economy grows at least as fast as our debt. Last year, GDP grew by 3.8%. If we grow by that same percentage this year, we could afford to add $115.5 million in new debt while maintaining the same ratio.
PEI’s projections actually show that net debt-to-GDP will rise to 32.6% in 2025–26, then to 35% the following year. Is that bad? Not necessarily. The better question is why? For what strategic purpose? But it does mean debt growth is outpacing economic growth for now.
A conservative assumption is that long-term average annual GDP growth for developed economies will tend to run somewhere between 2% and 3%. Some years, GDP growth will be higher. Some years it will be lower.
While net debt growth may fluctuate in the short-run, aiming for a similar 2% to 3% long run average annual growth in net debt might just keep PEI in a goldilocks zone.
Conclusion
As Islanders, we ask our government to invest our money in our future.
In essence, we also ask our government to leverage this investment with just the right amount of debt financing, and to allocate the most capital in the most prudent manner to maximize our quality of life potential.
No one really knows the exact “right” amount of debt to employ for this purpose, or the exact “right” way to deploy our total public capital, but a useful way to keep track of things is to look at our government’s net debt-to-GDP – especially long-term trends compared to a target.
But just because getting the “right” answer is tricky, it doesn’t mean we shouldn’t try. To that end, here are a few questions worth pondering:
– What services do we want our government to provide—and why?
– What infrastructure do we need—and how will it improve our lives?
– How do we ensure these investments support long-term GDP growth?
– How efficient is our public sector? What about our private sector?
– What’s PEI’s ideal debt-to-GDP range? How do we get there—and stay there?
Democratic governments have one capital allocation job: to Invest our public capital in the public interest.
That job is incredibly complex – and the stakes are also incredibly high. Our livelihood is at stake.
As Islanders, we owe it to ourselves to sustain healthy long-term GDP growth and to maintain our net debt-to-GDP in an ideal target zone.
It’s not easy, but it’s well worth the effort.
Because, in my view: the world needs more PEI.
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Back to the Future – Part 2
Access to Capital
Introduction – Philosophy Class
The way a problem is described often shapes how it’s understood. “Access to capital” is a case in point.
Here’s the common refrain – from a local perspective:
PEI (and Atlantic Canadian) businesses don’t have enough access to investment capital.
As an over-educated lawyer with a quixotic penchant for finance and economics – and an undergrad degree in philosophy – I’m particularly intrigued by this kind of statement.
In my 1990s-vintage Logical Self-Defense class at UPEI (yes, that was a real course), I’d have broken it down like this.
Hidden Premise 1: Prince Edward Islanders want a higher standard of living.
Hidden Premise 2: A higher standard of living depends on sustained per capita GDP gains (e.g., higher wages, higher-value goods/services, improved infrastructure).
Hidden Premise 3: GDP gains depend on local businesses generating greater future value.
Hidden Premise 4: Greater future value depends on sustained productivity gains.
Hidden Premise 5: Productivity gains depend on smart investments of capital.
Hidden Premise 6: This capital must be accessed (via debt, equity, or both).
Stated Premise 1: PEI businesses don’t have sufficient access to investment capital.
Conclusion: Therefore, if PEI businesses had greater access to capital, they’d be more successful – and Islanders would enjoy a higher standard of living.
This argument is both logical and economically sound. Evidence supports it too (see for example: Globerman and Emes, Promoting Capital Investment in Atlantic Canada, 2022).
But here’s your spoiler alert: solving this problem is much more complicated than it sounds. I don’t have the answer. And by the end of this post, you and I will both have a headache from just trying to understand it.
What I can say with confidence: anyone who thinks the answer is simple is probably wrong.
The Wrong Answers
There are two seductive but overly simplistic responses to this challenge:
Just have taxpayers give PEI businesses all the capital they need. Problem solved.
Just tell PEI businesses to work harder to attract private investment—or give up. Problem solved.
Both approaches are flawed. What’s needed is a richer conceptual framework—and some shared aspirin.
The Capital Equation
Businesses as Capital Seekers
Every private business looking for investment capital is, in essence, saying:
“If you lend me money, I’ll try to turn it into something valuable—and give you back more than you gave me.”
Investors as Capital Suppliers
Every investor, meanwhile, is saying:
“If I give you money, I expect you to return it—with something extra to compensate me for the risk that things might go sideways.”
Two Things Must Therefore Happen
Lenders and borrowers must meet.
They must agree on terms.
So far, so good. But now the headache starts.
No Barrier. No Shortage. So What’s the Problem?
There is no literal barrier stopping capital from reaching PEI.
It’s not like money is piled up on the mainland side of the Northumberland Strait and no one knows we’re waving from the Island.
Capital markets – both Canadian and global – are highly efficient.
If you’ve ever received a credit card offer in the mail, congratulations: you’ve already been vetted by an algorithm before you even thought about borrowing money.
Sure, sourcing capital for businesses is messier than consumer debt—but there is no physical or technical reason why capital can’t flow here versus somewhere else.
There’s also no capital shortage.
Globally, capital is constantly being invested, reinvested, and repositioned. If capital were water, the global market would be a vast ocean – and PEI would be floating in the middle of it.
So if there’s no shortage and no barrier – what’s the actual problem?
The Headache: A Market Mismatch
The real issue is a market mismatch, not a capital shortage.
This mismatch – between capital-rich investors (net savers) and capital-hungry businesses (net users) – is both structural and systemic. And it’s especially acute in small jurisdictions like PEI.
Here’s how researchers, policy experts, and investors tend to describe the mismatch:
Structural Challenges
Small Scale & Limited Agglomeration
PEI has a small urban footprint and a large rural population. That limits the “agglomeration effects” – the productivity and innovation benefits that occur when businesses, talent, and services cluster together. These clusters are magnets for investment. PEI, in comparison major urban centers, lacks that density.
Thin Investment Ecosystem
We do have active angel and early-stage investors. But they operate in a smaller, thinner ecosystem than exists in larger markets. This makes it harder to build investor confidence and scale up through co-investment from larger pools of capital.
Provincial Fiscal Structure
PEI’s economy has long relied on a healthy dose of federal equalization and EI transfers. Combine that with relatively high income taxes relative to other provinces, and the result can be a disincentive to private investment – and talent attraction.
Talent Gaps & Business Culture
PEI faces persistent shortages in skilled labour and management. Our business community skews small, local, and low-growth, with many firms are understandably risk-averse and slower to adopt scalable technologies. That can be a tough sell to growth-oriented investors.
Infrastructure Gaps
We grapple with key infrastructure deficiencies – particularly, higher cost energy transportation, and high-speed internet. This adds friction to scaling a business and reduces productivity, making firms less competitive and therefore less attractive to capital.
Geography & Transport Costs
To grow, PEI businesses often need to export. But geography adds cost: we’re reliant on a single bridge, a seasonal ferry, an off-hub airport, and no rail freight. That adds risk and cost to operations – factors that investors weigh heavily.
Conclusion: No Silver Bullet, but a Shared Imperative
Improving access to capital for PEI businesses is not about flipping a switch. It’s about addressing multiple complex barriers – structural, geographic, cultural, and fiscal.
We need to:
Improve our investment ecosystem
Modernize infrastructure
Attract and develop skilled talent
Enhance the competitiveness of our businesses
Think long-term (federally and provincially) about public finance and tax policy
None of this is easy. But the logic is clear:
If more Island businesses can access more capital, they’ll become more productive and competitive. That raises GDP. That improves our standard of living.
This goal is logical, economically sound, and pretty darn compelling.
Because, in my view – the world needs more PEI.
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Back to the Future – Part 3
Economic Development and Investor Expectations
Introduction
This is the final installment in a three-part series where I set out with grand ambitions to link investor expectations with Prince Edward Island’s long-term economic development potential.
The original plan was to riff on Back to the Future – blending the logic of discounted cash flow, future value, and real-world investment into a compelling economic narrative that would leave readers misty-eyed and inspired.
Well . . . that didn’t exactly pan out as intended. But here we are at Part 3.
The important bit – the part worth sticking around for – is this: behind all the theory, GDP math, ribbon cuttings, and funding announcements, economic development comes down to a deceptively simple principle:
People invest money with expected results.
Understanding those expectations – especially where public and private investment intersect – is foundational to any serious conversation about Prince Edward Island’s economic future.
So, to help build that foundation, here are ten basic tenets of successful economic development. Each is short, sharp, and designed to hold up as we venture into more complex territory.
My hope is that this serves as a useful reference point, and maybe even sparks ideas for getting us closer to reaching PEI’s full potential.
Ten Tenets of Successful Economic Development
1. Economic development must grow GDP, improve living standards, and enhance quality of life.
It’s not just about growing the economy – it’s about how gains are distributed and reinvested.
Sustainable growth means:
Higher per capita GDP
Rising incomes and broader wealth distribution
Better public services, infrastructure, and environmental outcomes
Growth that doesn’t improve how people live – or comes at the cost of clean water or community wellbeing – isn’t real progress.
2. Private sector productivity is essential.
Long-term growth depends on:
Capital investment
Labour input
Innovation
Productivity gains from the private sector are a necessary condition for development – but not sufficient on their own.
3. Capital can be public, private, or blended.
Roads and bridges? – Often public.
Factories and tech? – Usually private.
Great projects often involve both.
4. All capital ultimately comes from people.
Banks lend deposits.
Pension funds invest retirement savings.
Governments spend taxes.
Even corporate reinvestment traces back to individual ownership or consumption.
5. Private capital expects a return.
Whether through equity or debt, private investors expect:
Their money back
Plus a return
Proportional to the risk
6. Public capital expects a benefit.
Taxpayers don’t expect cash back from public investments – but they do expect:
Collective value
Public goods (schools, roads, clean water, public safety)
Stronger communities
7. Governments need a balanced mix of financing.
Just like many businesses mix equity and debt, governments rely on:
Tax revenue
User fees
Prudent debt
Too much debt reduces flexibility. Too little may signal missed investment opportunities.
8. The public interest does not equal individual interests.
Governments serve the common good – not personal preference.
These often align – but not always.
Navigating this tension while maintaining integrity of mission is key to maintaining public trust and legitimacy.
9. Principals and agents don’t always align.
In both public and private sectors:
Principals (taxpayers, investors) expect value
Agents (officials, executives) may have competing incentives
Smart governance recognizes and successfully manages this reality.
10. Place matters.
What works in Toronto may flop in Tignish.Culture, geography, scale, and people shape what’s possible.
Success requires solutions tailored to place – not merely copied from elsewhere.
Conclusion
Most of us want the same things: a stronger economy, better living standards, and a higher quality of life.
The hard part is figuring out how to get there.
People are complex. So are economies- essentially collections of people, interacting in organized ways, trying to live better. Even small improvements are hard-won.
But striving to improve our lives – and often disagreeing about how best to do it – is part of the human condition. It’s also what economic development is all about.
That’s why having a clear, grounded foundation helps.
These ten tenets are by no means the final word – but they offer a shared reference point as we dig deeper into the challenges and opportunities that underlie PEI’s economic development potential.
I, for one, look forward to following the next rabbit hole – and finding a path to a better Prince Edward Island on the other side.
Because, in my view: The world needs more PEI.
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“Bad Idea” Jeans
Introduction
Remember the classic ‘90s SNL skit, Bad Idea Jeans?
I think I must have put on a pair of those when I decided on this bright idea:
“I have a government job where I am among the roughly 70% of its workforce (full time and temporary) who are automatically enrolled in a defined benefit pension plan . . . So, I think I’ll pontificate to others about how that compares favourably to perhaps less than 20% of private sector workers in PEI participating in any kind of registered employer plan (i.e., whether defined benefit, defined contribution, or group RRSP).”
Bad Idea Jeans – The Denim Brand for Questionable Life Decisions.
Quite sincerely, I hope I do not come across as pontificating in choosing to discuss this important economic development topic.
I count myself very lucky to be auto enrolled in a retirement savings plan where my employer matches my own regular payroll deducted plan contributions.
I also count myself doubly lucky (I don’t even know if “doubly lucky” is a real term, but it seems fitting) to participate in a defined benefit (DB) plan where I will receive essentially a guaranteed (did I just jinx that?) life annuity of monthly payments through retirement and will not have to worry about I outliving my savings.
That is, my employer promises that if I keep doing my job, it will pay me a future retirement sum (in my case, essentially 2% of my salary for every year of service up to a max of 70%).
Then comes the hard part – but not for me. My employer has to guess how long I and other employees might live, whether we’ll stick around or leave for another job, and how well things might go (I.e., investment returns versus expectations) in the interim at managing all our pooled savings for us. If my employer guesses wrong, it has to pony up more money (Read: our taxpayer money, by the way) to cover the shortfall.
And all the while, I don’t even have to think about any of this stuff. I just work – and then retire – and get paid (I really hope I’m not jinxing this).
The good news is – for me as a plan member and as a taxpayer – my plan is currently fully funded. All thanks to some very complex work, and some good guesses by expert guessers (think: actuaries).
By the way, it’s roughly the same thing with our Canada Pension Plan (CPP) – automatic enrolment by employees, payroll deductions at source, promised future annuity payments, and some very complex assess management and guesswork on our behalf by the CPP Investment Board. Good news there as well – the plan is fully funded.
My employer pension will be adjusted down (as it should) to account for my also having accumulated CPP. For others with no employer plan, CPP may all they have. The problem is, at an average monthly payment of approximately $850, CPP is not enough on its own as a retirement income.
CPP aside, I realize that DB plans are complex, risky, and costly to administer; and that many employers have abandoned them in favour of defined contribution (DC) or group RSP plans. These alternative plan structures also involve enrolment and matching contributions, but they leave the guess work and uncertainty of outcomes largely to others. One day, my employer could also choose to do the same. To be sure though – I would take that deal in a heartbeat over having no plan at all.
So with all that in mind, here’s what I propose to serve up as a big fat “what if” thought experiment (actually – a “what if” and a “how” thought experiment):
What if the private sector workforce in PEI had the same retirement plan participation rate as in the public sector (e.g. 70%+)? And how might that ever actually happen?
What if?
No – I haven’t taken too many gummy bears. I know this seems like quite a stretch. But work with me here – let’s actually ask, “what if.”
What if retirement savings plan participation rates (whether DB,DC, or group RSP) in the private sector matched the public sector? That is, what if 70%+ of all PEI workers – including part-time, not-for-profit, seasonal, and gig workers – had a portable, consistent retirement saving pathway?
The answer is, if Prince Edward Island were to achieve this goal – particularly among low and middle-income earners – the long-term economic impact would be substantial. This potential is further heightened if a small portion of these increased pooled retirement savings could be successfully allocated to local return generating investment opportunities.
Let’s keep in mind, this blog post is no research treatise. Think of it as more of an amuse bouche to prompt further reflection. But here’s where the publicly available evidence points us:
Increased worker participation in retirement plans leads to
Improved labour market productivity
Treating retirement security as part of human capital strategy (like training, wellness, or health benefits) aligns short-term productivity with long-term financial well-being.
With adequate retirement savings, older workers can retire voluntarily, freeing up roles for younger employees. Employers also benefit from predictable workforce transitions.
Providing reasonable and predictable retirement savings offerings improves requirement competitiveness and retention – especially in tight labour markets
Financially secure employees (especially older workers) are less likely to suffer stress, absenteeism, and disengagement. Retirement readiness improves mental wellness and focus.
Employees who feel valued and secure in their long-term futures tend to be more loyal, engaged, and motivated.
2. Increased household financial security.
Workers end up saving more consistently throughout their careers.
They tend to accumulate adequate retirement income in relation to their working years.
They also tend to avoid over-reliance on government income supports during retirement.
3. Lower government fiscal pressures over the long-term
Governments (Think: Taxpayers) bear the brunt of social costs associated with old-age poverty. This includes direct government income supports, housing, and healthcare subsidies.
Over time, greater private savings reduces government fiscal pressures for these types of subsidies.
4. Macroeconomic stabilization
Economies with stronger private retirement systems are less exposed to demographic shocks, especially economies with aging population demographics.
Household savings act as a stabilizer during economic downturns, providing household liquidity and the ability to maintain consumption when economies are constrained.
5. Increased long-term investment and capital formation
Retirement savings pools—especially when aggregated (via pension plans or pooled RRSPs) – can create opportunities for long-term capital allocation to support appropriate local return-generating ventures (Think: infrastructure project, real estate financing, or commercial venture financing).
Here’s a big caveat though, from one of our ten tenets of economic development. Investing private retirement savings demands a market return. Such allocations ought not be considered as a source of “low cost capital” for projects that can’t otherwise meet market-based investor risk and return expectations.
Related to this caveat, it is not reasonable to expect a large percentage allocation of this new pooled investment capital to be allocated locally. Pooled retirement investments require prudent and diversified allocation decisions, and no matter attractive, any such local investment opportunities ought to represent only a small slice of the pooled portfolio pie.
How?
So, how would PEI ever achieve this goal?
The answer is – with much effort, a significant amount of time, and great deal of difficulty.
But it can be done.
Challenges
Let’s start with some of the basic challenges.
PEI is starting from a weak position.
Due in part to significant seasonal private sector employment and a high proportion of small businesses, PEI has below average private sector workplace pension coverage – hovering at or below 20%.
PEI has an aging population demographic and suffers significant out-migration of younger workers.
Our workforce features a relatively heavy reliance on federal transfers (OAS, GIS, EI) to support and sustain income during working years as well as retirement income needs.
PEI has limited high growth or large infrastructure investment opportunities – typical long-term alternative investment allocation areas for pooled retirement savings.
2. Real and perceived cost pressures.
Businesses with tight cash flow or few back-office resources may be reticent to commit to making contributions as part of a worker retirement plan. This concern may be particularly acute in seasonal or low-margin sectors (e.g. tourism, agriculture, fisheries, food service).
A related concern would be that administering and contributing to these plans represents a recurring cost with no immediate return on investment – especially if staff turnover is high.
Finally, employers may perceive this type of initiative as competing with other existing compensation pressures (e.g. health benefits, retention bonuses) they may be considering.
3. Employees may complain of coercion or demand more compensation
Business owners may be concerned that employees will feel coerced to allocate current wages toward savings – especially if plans feature auto-enrolment.
A related concern would be that employees may demand higher wages to compensate for lower take-home pay due to savings plan auto-deductions, creating upward pressure on wages without clear productivity gains.
4. Liability and reputational risk
Finally, employers may have reservations about being held accountable for financial firms who either do not manage manage plans very well, or who may be dishonest or unscrupulous in dealing with entrusted funds.
These types of concerns and structural economic challenges are important to acknowledge and consider.
Luckily, as outlined below, there are various plan design and supporting policy options to address them.
Perhaps the biggest challenge, though – is time. To accomplish a significant improvement in private sector plan participation and retirement savings accumulation will take time. Lots of time. Like, 10+ years of consistent, coordinated effort my multiple private and public stakeholders.
A 10 Year Road Map
What I’ve cooked up from my own experience and some basic “blog level” digging is by no means a fully baked solution for all these challenges. Nevertheless, I’ve framed these initial observations as a long-term plan to help in visualizing that there actually can be a “how” to all this “what if” thinking.
Again – I don’t profess to have this all figured out. But I’m hoping this rough sketch sparks some meaningful “beyond-the-blogosphere” discussion about the “what if’s” and “how’s”.
So, here goes:.
Strategic Goal
To achieve retirement plan participation parity across public and private sectors in PEI by expanding access to high-quality, low-barrier plans for all workers—especially those in small businesses, nonprofits, and seasonal/gig employment
Key Success Elements
Based on a brief scan of Canadian and international evidence, I’ve listed five basic elements that, if successfully incorporated in a long-term strategic initiative to achieve this goal, should increase the likelihood of success.
Incorporate auto-enrolment (essentially, the default is that employees are enrolled, but with a option to opt-out).
Ensuring this one element is incorporated drives up participation dramatically, especially among younger and lower-paid employees.
This move alone also goes along way to removing behavioural barriers (status quo bias, decision overload, procrastination)
2. Set default contribution rates that, wherever possible, are tied to matched employer contributions.
This feature reduces plan complexity and and helps build inertia – basically, it’s the KISS principle.
Incorporating this feature also sends employer support signals and helps set default decision norms.
3. Ensure enrolment is simplified and easily understood at hiring
This is really the KISS principle again – this time to help accelerate savings routine uptake by new employees.
Incorporating simplified forms and verbal nudges when onboarding new employees can increase completion rates and savings routine uptake.
4. Use auto-escalation features to gradually increase savings rates over time.
Helps boost participation and savings rates.
Enhances fairness and inclusivity, especially among lower-paid, seasonal , or transient employees.
Allows employers greater flexibility in incorporating matching features.
5. Make use of pooled plan designs.
Pooled plans, such as legislatively enabled multi-employer pension plans (MEPPs) and pooled registered pension plans (PRPPs), reduce cost and complexity for employers and employees.
Lower administrative costs are important for small employers.
Lower account management fees are important for employees (lower fees can dramatically increase long-term savings accumulation).
Aggregated capital can be strategically allocated to local economic impact, while diversifying investment risk.
Phased Approach
It will be tricky for PEI to go from zero to hero in achieving plan participation parity between private and public sector workers.
Slow, steady, and methodical (rather than trying to hit a home run) will likely be the winning approach.
Phase 1 (years 1 and 2)
The objective at this stage is to lay a foundation and establish early adoption. The basic idea is to identify the gaps, generate some concept momentum, and actually pilot some scalable solutions.
Gap Analysis
Complete a comprehensive survey of current private sector participation rates in DB, DC, and group RRSP plans across employment sectors.
Legislative Policy
Frame up and advance enabling PRPP/MEPP legislation to
Formally recognize PRPPs and MEPPs, that would
Enable the use of tax incentives or public sector matching (e.g., if deemed in the public interest and if budgeted, to be used as incentives for matching contributions);
o Allow for mandated adoption in certain sectors (for example, requiring plan adoption for government funded sectors, such as senior care and community not-for-profits and
o Incorporate standardized auto-enrolment features or a province-wide digital plan registry.
Pilot Program
Launch a pilot plan for nonprofits, seasonal industries, and freelancers
Target hospitality, tourism, agriculture, and care sectors.
Make use of existing fit-for-purpose plan models (for example, The Common Good Plan operates in this space across Canada).
Offer early enrolment incentives (e.g., admin fee subsidies, employer matching top-ups).
Education Campaign
Incorporate messaging into provincial and federal financial literacy programs with a “Secure Your Future” PEI message.
Partner with Chambers of Commerce, financial intermediaries, and industry sector champions.
Phase 2 (years 3 to 6)
The objective at this second stage is to increase and broaden uptake, build momentum, and begin to normalize the ambitious yet achievable goal of retirement savings for all.
Enabling Legislation
If warranted and in the public interest,
o advance legislative policy process to consultation and implementation stage;
o Make related budget allocation decisions.
Employer Tax Incentives
If warranted and in the public interest,
o Introduce modest provincial tax credits are introduced for small employers who auto-enrol employees in the pilot or broader legislatively enabled PRPP/MEPP plans;
o Provide for CRA matching programs or expanded RRSP matching envelopes for low-income earners.
Support for Sector-Based MEPPs
Collaboration between government, financial intermediaries (e.g. credit unions) and industry groups to launch pooled defined contribution plans for targeted sectors with systemically low participation rates (e.g., construction, agriculture, hospitality).
Provide back-end admin support or a public digital enrolment hub.
Auto-Enrolment & Opt-Out Pilots
Test auto-enrolment and opt-out features with employers using the initial pilot plan in targeted industries (e.g., nonprofits, early childcare, seasonal work).
Measure satisfaction, cost, and participation impact.
Phase 3 (years 7 to 10)
The objective at this stage is to integrate and normalize the initiative across PEI – to institutionalize retirement savings as part of workforce expectations and culture.
Mandate Participation for Government-Funded Employers
Begin to require nonprofits and contractors receiving ongoing provincial operating funds (e.g., in health, housing, care) to offer a qualifying retirement plan as a condition of continued government support.
Formally accept the pilot fund and other PRPP/MEPPs as eligible vehicles.
Expand Data & Measurement Capacity
Introduce annual public reporting on coverage, contributions, and savings levels.
Begin benchmarking against national best practices and adoption/savings level metrics.
Create a PEI Retirement Ecosystem
Provide a one-stop provincial platform to compare, enroll in, and manage participation in plans.
Continue with public education, incorporating implementation data, success, economic development, PEI success themes.
Promote shared investment platforms for small businesses to pool assets and lower fees.
Conclusion
Ok – let’s climb back out of the plan participation parity rabbit hole..
PEI is nowhere near, and has no concerted plan for, achieving this economic development goal – let alone, deciding if this goal is even worth pursuing.
Yet, this topic is a perfect example of what I’m getting at with this blog experiment.
PEI is a collection of 180,000 people with some sizeable economic development challenges. But we’re also our own province in a really cool place to live.
Let’s let that sink in, as we are insanely lucky: We are 180,000 people with our own province in a G7 Country. We are uniquely positioned to take on lofty initiatives – to pilot innovative change – and use combined power of sovereign and collective will to enact significant change.
“What if” PEI actually took on plan participation parity as a 10 year strategic goal? What if we also become invested in the “how”? What if we actually “got it done”?
The result would be nothing short of transformational.
Transformational in terms of PEI achieving its economic development potential. But also, transformational as an example for the world – of what can be achieved when like minded people as ask: “what if?” and “how?”
Achieving transformational change is alway very hard work. It also always takes more time and effort than anticipated. But when it works – it’s well well worth it.
When it comes to Prince Edward Island leading the Country and providing a global example for achieving public and private sector plan participation parity, I’m squarely in the “what if” and “how” camp.
Because, in my view: The world needs more PEI.
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Sputnik, Small Places, and Private Equity
Introduction
From Space Panic to Private Equity
On October 4, 1957, the former Soviet Union launched Sputnik 1 – a shiny metal sphere with four spindly antennae—into low Earth orbit. For three weeks it transmitted nothing more than a faint “beep-beep-beep” before its batteries died. Eventually, it fell back to Earth and disintegrated.
The multi-year Sputnik program was groundbreaking. The practical utility of Sputnik 1? Not so much.
Still, Sputnik set off a wave of anxiety in the West, ignited the space race, and – believe it or not – helped shape the modern private equity industry.
Private equity (PE) is a form of investment in which professional firms raise capital from institutional and high-net-worth investors, invest in private businesses, and aim to exit those investments at a profit. Investors commit funds for several years, with profits (if all goes well) distributed back in proportion to their commitments.
Prior to the late 1950s, private investments were mostly the domain of wealthy families. But Sputnik – and the fear it unleashed that the Soviets had pulled ahead in innovation – led the United States to rethink how it funded entrepreneurship.
In 1958, the U.S. passed the Small Business Investment Act, creating small business investment companies to finance promising entrepreneurial ventures. This marked the beginning of professionalized small business investment and set the stage for the venture capital and leveraged buyout firms that now dominate global private equity.
Private Equity Today
For many, private equity conjures images of hostile takeovers or garage start-ups turning into tech giants. That’s part of the picture, but only a slice.
Private equity firms range from global giants to regional specialists. They invest in tech start-ups, but also in established businesses, real estate, infrastructure, and more.
The common thread:
Professional investors partnering with promising businesses, helping them grow, and delivering returns for their investors.
The Local Picture
Private equity has already made its mark on Prince Edward Island. Local and regional businesses have benefited from PE capital and expertise, both from PE firms based here and outside the region.
But that raises an important question:
Is there enough private equity activity in PEI to meet all the viable opportunities that need capital? That is, to borrow a Sputnik metaphor, have we already “beaten the Soviets” by matching every promising Island business with an investor?
The answer:
Likely not.
Here’s another question:
If there are still local promising local businesses that are underserved by private equity, how do you address it?
The answer:
With great difficulty – and a real risk of failure.
Here are a few reasons why:
Thin Deal Flow – Many argue there simply aren’t enough “investable” opportunities in PEI for it be worthwhile to source and find them. With a population under 200,000, PEI is a small place. How many Zuckerbergs with globally-scalable tech start ups can you expect to find around here?
Scale – Even with a base of investable businesses, local PE firms may not be able to operate at a sufficiently large scale to support a professional team (Read: get paid to work in PE as a full-time job).
Impact Aversion – Many investors shy away from investing in projects that combine community impact with below-market returns, leaving that work to government or charitable organizations. This renders an already small base of potentially investable businesses, even smaller.
But shrugging and walking away, as people might have been tempted to do in 1957 after hearing a strange beeping noise when trying to tune into their favourite radio station, isn’t the right answer.
Sputnik forced a collective private and policy-driven response.
PEI faces its own small place Sputnik moment in a rapidly changing globalized economy:
How to meet the moment and achieve its full economic development and quality-of-life potential.
The satellite is beeping. Now is the time to meet the moment and achieve our best.
Private Equity in Plain English
Cole’s Notes Description
Here’s a Cole’s Notes description of private equity:
Pool money from investors who have specific expectations.
Use professionals to invest that money in private businesses.
Improve those businesses.
Return the original capital to investors, plus net profits.
When it works, everyone wins – investors, businesses, and the fund managers. When it doesn’t, nobody’s happy.
Investors
Private equity investors range from:
Pension funds and insurers
Family offices and wealthy individuals
Endowments and charitable foundations
Governments and development agencies
Some are strictly focused on market returns. Others are motivated by a mix of returns and impact. Others may have an impact only focus. Each has its own risk, return, and liquidity needs.
PE Firms
For the most part, private equity firms earn their keep and pay the bills through:
Management fees (to cover costs)
Performance fees (a share of the profits if investments succeed)
PE firms come in several flavours, often focused one of these areas:
Venture capital – High-risk, high-growth potential early-stage companies
LBO (leveraged buyout) – Mature businesses needing new ownership and/or direction
Private credit/distressed debt – Companies needing non-bank debt financing or restructuring
Real estate/infrastructure – Real assets of various types for development, repurposing, or stable management.
Impact-oriented – Focused on measurable social outcomes, with realistic but below-market financial return prospects.
PEI’s Small Place Sputnik Problem
Most funds are closed-end (fixed life). Some are evergreen (they don’t wind down after a set period), meaning they reinvest capital and can hold investments longer, offering more liquidity but lower returns.
An Underserved Segment
Let’s strip away local business segments already fairly well served by private equity, or which are ill-suited to this form of professionally managed investment :
Early-stage tech and start-ups (covered by existing local, regional firms).
Large-scale energy/industrial/infrastructure projects (already attract large-scale institutional money).
Micro or lifestyle businesses geared toward self-employment, and that will likely never scale up.
Purely subsidy-dependent or un-bankable ventures with no realistic rerun prospects.
What’s left? An investable yet under-served segment.
This segment may be loosely described in terms of six opportunity areas:
Succession & Buyouts – larger or scalable established businesses with retiring owners and no natural buyers (although generally smaller in PEI, let’s say the Atlantic Canada sweet spot is somewhere between $5M and $50M)
Specialized Sectors – niche manufacturing, food processing, logistics, value-added fisheries, specialized services.
Private Credit & Growth Financing – established companies needing capital or financial restructuring to improve productivity or expand operations (e.g., exporters/manufacturers juggling large inventories and receivables).
Real Assets – housing, specialized commercial/industrial.
Smaller-Scale Renewable Energy/Local Infrastructure
Distressed/Turnaround – solid businesses with fixable problems or that can at least rise from the ashes.
The Case for an Innovative Evergreen Model
This underserved segment features:
Businesses with stable or at least predicable cash flows, but lower expected returns.
Slow-growth opportunities, with longer exit paths which may occur gradually.
Complex time-consuming deals and long-term value creation strategies.
These investment features do not fit well with a traditional closed-end fund model (source deals and invest funds over 3 years, hold them for 5 to 7 years, find whatever exit you can, then liquidate the investments and shut the fund down).
By contrast, evergreen fund models are better match for this segment, as they feature:
Flexible investment time horizons: No forced 5–7-year exits.
Portfolio recycling – Greater discretion to reinvest flows within and among portfolio investments.
Incremental investor redemptions/replacements -Usually after an initial holding period, funding partners have regular (e.g. quarterly) opportunities to redeem some of their proportional interests, making room for incremental capital replacement.
Lower volatility – Cash flow and fund liquidity patterns provide steadier and more predictable returns (albeit, lower than than for top performing closed-end PE funds).
How Could It Work?
Realistically, this could work only at a regional scale (Atlantic Canada – not just a PEI focus) and with professional management (not cheap – requires a large amount of funds under management) .
Likely minimum required start-up capital: $50M–$75M (e.g., this might fund 5 or 6 deals at an average investment size of $10M, and provide for $750k to $1M in operating revenue)
Target size (when fully mature): $150M–$200M (e.g. this might provide for 15 to 20 investments, and provide for $1.0to $2.5M in operating revenue).
Setting this up would be no easy feat to pull-off. The challenge:
Too small a fund can’t afford professional management and may not be sustainable.
Too small a market poses a challenge for raising enough capital to attract and sustain professional management.
Large institutional investors may be hesitant in committing to the Atlantic Canada market without knowing there is an initial anchor investor.
But if that anchor investor is government (or government adjacent), these same institutional investors may shy away – perceiving the initiative as an economic development project rather than a commercial venture.
A Possible Path Forward
Adopt a well-governed blended capital structure with two distinct investor tranches.
Impact-oriented tranche
Governments, foundations, philanthropies.
Expectations from this capital commitment are impact, below-market returns, and to serve as anchor investors.
May be expected to absorb some risk of initial losses (first-loss capital).
Market-return tranche
Pensions, family offices, insurers, high-net-worth individuals
Seeking commercial returns, but may be receptive to a trade-off between higher liquidity and lower-returns.
May expect anchor tranche to absorb some risk of initial fund losses.
Expectation of no cross-over, mission-creep, or dilution of commercial returns from impact tranche.
Experienced professional management and ring-fenced governance
Separate terms, returns, and decision-making processes.
Sufficient experienced professional management, with clear accountability.
This could create a credible, professional, Atlantic-wide evergreen fund that fills the mid-market capital gap. But it’s quite a “moon shot.”
Conclusion
In 1957, Sputnik was a wake-up call to the Western world. Nobody knew how to win the space race (or of the geological implications if they failed). But a decade later, some now famous humans were on the moon.
PEI faces its own challenge: how to unlock the Island’s full economic development and quality-of-life potential.
As with figuring out how private equity might best serve our local and regional businesses to grow and develop – the path isn’t obvious, or easy.
But it’s worth trying.
Because, in my view: the world needs more PEI.
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Bicycles, Bootstrapping, and Beer
Introduction
Have you ever seen one of those pedal-powered beer-and-bike party bus thingies? One passed me the other day as I was walking up a Charlottetown street — a dozen people perched on stools, pedalling away and enjoying a beer, while a guide steered them around the city.
If you’ve ever seen one, you know the basic idea: everyone contributes some good old-fashioned pedal power, but the thing only works if there’s someone at the front keeping it on the road — and a bit of pre-charged battery power to help get up the hills.
It struck me as a quirky metaphor for a large chunk of Prince Edward Island’s small business economy.
In my last post, I argued that a private equity fund could help a segment of “investable” PEI companies reach their full potential — those that are already profitable, of a size and structure that can accommodate external investment, and ready to scale.
But what about the hundreds of smaller businesses that will never be considered “investable” – at least according to traditional private equity return expectations? This might include:
Family-run seafood processors with six or eight employees;
Small trades firms that struggle to find apprentices and cover payroll in February;
Local operators with a four-month season and a DIY website; or
Multi-unit lower-income housing initiatives that are cash-flow positive, but not much more.
These firms aren’t looking to attract the Ferraris of venture finance. What they need is a pedal bus:
Some bootstrap entrepreneurship of their own (the pedalling),
Some shared guidance and support (the steering), and
A little extra battery power to help get up the hills (the financing).
The Atlantic Pedal-Bus Pilot Fund
Overview
Building on the evergreen fund model described in my last post, this version proposes a non–private equity, two-stream fund. It’s not designed to replace existing financing sources — banks, grants, loan guarantees, or bank loans — but to fill the much-discussed gap between startup grants and conventional credit.
The goal? Move viable small businesses from survival mode to success — and in some cases, toward scalable growth. The fund could also support non-profit or cooperative housing projects that similarly fall through the cracks of traditional financing models.
Each stream would be designed to support ventures that are:
Meeting an identified (but evolving) market or social need,
Characterized by low growth, limited profitability, or modest scalability, and
In need of patient capital and structured advisory support.
The business stream would focus on small-scale, locally owned firms. The housing stream would support cash-flow-positive, community-led or not-for-profit developments where traditional returns aren’t the primary motivation — but where sustainability is still key.
How It Might Work
While not structured as a private equity vehicle, this wouldn’t be a thinly veiled grant program either. The fund would operate as a self-sustaining, evergreen pool of patient capital, gradually recycling and growing its portfolio over time. Basic design specs might include:
Size – A $30 million pilot for PEI, large enough to support 40–50 small businesses and 5–10 housing projects, and which could be later increased to an Atlantic Canada scale after proof of concept.
Cost – Operating costs of $1.5–$2 million per year (staffing, advisory services, credit analysis). These would eventually be covered by interest and revenue-share income once the fund is fully deployed. First-loss investors may need to absorb a portion of costs during the initial pilot stage.
Structure – Patient capital with flexible terms (e.g., balloon repayments after holding periods, or revenue-based repayment structures that rise and fall with cash flow)..
Support – Mandatory business or project advisory services — e.g., bookkeeping, shared services, or coaching — as a condition of financing.
Investor Protection and Retail Participation
An important caveat: investor protection must be front and center in any fund targeting “community” or “impact” investors.
This is not a place for retirement savings. If individual retail investors were involved, they would be making an investment akin to philanthropy with a capital preservation upside — not expecting strong returns. If they recovered their capital after inflation, that would be a bonus.
In plain terms: investing in private businesses is very high risk. Clear disclosure would be required under securities law to ensure that all prospective investors understand the risk of losing their entire investment.
That said, investor risks could be mitigated in a few key ways:
Professional fund management and portfolio diversificationFirst-loss protection from government or philanthropic capital
Redemption opportunities after an initial holding period
Embedded business capacity building to increase success rates
These protections wouldn’t guarantee returns — but they could help reduce downside risk, and make the model more attractive to aligned investors.
Why Both Business and Housing?
The logic of blending two fund streams — business and housing — comes from the similarity in capital structure needs, not in return profile. In both cases, the goal is to:
Fill financing gaps where conventional investors won’t go;
Ensure long-term sustainability and community benefit; and
Provide capital on terms that match real-world revenue timing.
Many organizations like Tapestry Capital or New Commons Development have advanced the community housing financing space in other parts of Canada. This model could be built in a complimentary fashion to fit PEI’s small-scale context, with a shared back-office across the two streams to minimize cost.
Conclusion
Not every PEI business could — or should — attract private equity. And yes, some businesses simply aren’t viable. But there remains a large segment of “non-investable, yet investible” ventures: undercapitalized, hardworking, and stuck just below the threshold of growth.
There is no shortage of pedal power and bootstrapping on the Island. What many need is a chance to pedal together for a while — supported by well-placed patient capital and someone to help navigate.
And if it works, the beer will taste better at the end of the ride.
There’s no doubt that public subsidies and grants have a role to play. But they come at a high fiscal cost — and can’t cover every need, forever.
At some point, we’ll need to build a middle layer of patient capital to support the parts of our economy that neither traditional lending nor private equity can reach – and with a financing model that can stand on its own two feet (or pedals).
Maybe it’s time to test-drive local a pedal-powered fund model .
Because, in my view: the world needs more PEI.
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Local Kids, Rowing Shells, and Great Coaching
How a Search Fund Could Help PEI’s Business Succession ChallengeIntroduction
This summer, I started rowing again for the first time in over 25 years.
My first thought was: “I’m really out of shape.”
My next thought. . . well – actually, my second, third, and fourth thoughts were pretty similar to my first..
Eventually, though, my mind turned to rowing as an apt metaphor for a model of entrepreneurial finance that’s underused here on Prince Edward Island: the search fund.
Then I briefly lost my balance and nearly flipped the boat.
I’m back on the water because my 15-year-old daughter recently took up rowing. She’s tall, strong, and athletic. One of the boats she trains in is a sleek racing shell once used by a previous generation of competitive athletes. It’s in excellent condition – built for speed and precision – but only in the hands of someone who’s trained, ready, and supported.
That image stuck with me. Because in many ways, that’s where PEI finds itself when it comes to intergenerational business succession.
My daughter is eager to excel (think: a motivated recent graduate or early-career professional). But without a rowing club (a supportive local investment fund), access to a good boat (a viable business ready for succession), and great coaching (experienced angel investors and mentors), she may never reach her full potential.
Today, thanks to Rowing PEI, quality boats, and dedicated, experienced coaches, my daughter can row competitively right here on the Island. Just 15 years ago, none of that existed. Local kids who might have loved the sport were out of luck – unless they moved away.
Now we have a local club. Young rowers are getting in great boats, with great coaching.
And the heart of any successful rowing club? A committed community of experienced, lifelong rowers who love the sport and want to give back. These clubs don’t just survive – they produce Olympic medalists.
So I’ll make a bold prediction:
Rowing PEI will not only continue to thrive – in the next 25 years, it will have provided the start for PEI’s first Olympic rowing medalist.
[Let’s also give credit where it is due: Emily Cameron, who took up rowing in Ontario, won silver at the 2013 World Championships. Two other Islanders – Richard Symsyck (1972 Games) and Gordon Henry (1988 Games) – also found their own way to compete as Olympic rowers.]
Now, let’s talk about search funds.
A PEI Search Fund
The Local Challenge: Established Businesses, Limited Succession
Across PEI, there are dozens of viable, profitable businesses owned by people nearing retirement. While some are passed on to family or sold privately to local buyers, many simply close down or are sold to absentee owners due to lack of capital or fit.
Meanwhile, we risk losing talented young entrepreneurs who either give up on the dream of owning a business – or move away to make it happen.
The result? Fewer jobs, diminished local control, and missed opportunities for long-term economic momentum.
A PEI – or Atlantic Canada–based – search fund could help address this challenge.
What Is a Search Fund?
This was actually the focus of my MBA research project. (Spoiler: it wasn’t published, and I did not become a famous business author with multiple book deals.)
At its core, a search fund is a pool of capital raised by investors to help a promising entrepreneur find, buy, and run a good business – often one where the current owner is looking to retire.
From my interviews with local investors, I found that this kind of activity already happens here on an informal basis. But it’s typically under-capitalized, and few local investors are willing to “pay” an entrepreneur to search full-time.
In formal search fund models (more common in the U.S.), investors pool their money, back a specific entrepreneur during a 1–2 year search phase, help finance the purchase of a business (often using debt as leverage), and then share in the returns over time. The entrepreneur earns ownership gradually by operating the business successfully over the long term.
Why This Model Could Work on PEI
Here’s what the local investor interviews revealed:
There’s genuine interest in local, succession-focused investing – especially if it’s relationship-driven and aligns incentives.
Most investors are cautious about paying entrepreneurs during the search period unless there’s clear commitment and shared risk.
Flexibility is key – investors are open to phased buyouts or profit-sharing arrangements with trustworthy entrepreneurs.
“Exits” tend to mean something different here – local angels often want to stay invested longer, recoup capital gradually, and earn a reasonable return over time.
That suggests a more PEI-friendly version of a search fund would need to be structured differently – more patient, more flexible, and more relational.
A Local Adaptation: Evergreen Fund, Two-Stage Ownership
Here’s how a made-in-PEI model might work:
An evergreen pooled capital structure allows for new investors to enter and existing investors to exit gradually, with a longer time horizon.
The fund supports a modest search budget (say, $50K–$60K) to help the entrepreneur focus full-time while searching for a good acquisition.
A typical deal might involve a $2.5M–$5M business, with 50%–60% financed through traditional debt, and the rest from the fund.
In the first phase, all net income after debt service goes to the fund until it recoups its investment (usually within 4–6 years).
In the second phase, the entrepreneur earns 50% of net profits, while also drawing a market salary.
Over time, they could earn up to 75% or more ownership, based on performance and growth.
What’s the Return?
Let’s simplify the math:
Imagine the fund invests $1M in a business that generates $300K in net income annually.
The entrepreneur searches, acquires the business, and runs it. For about the first 5 years, all net income goes to the fund to repay that initial investment.
After that, the entrepreneur gets 50% of net income ($150K/year), plus a salary.
The fund keeps receiving its share of profits for another 5 years or so, possibly longer if it retains a small stake.
What does this mean for investors?
They could expect to get back 2.5x–5x their capital over 10 years. That’s roughly equivalent to earning 10%–18% per year, every year, for a decade (And for our corporate finance propellor head friends – that’s also what’s called a 10% to 18% IRR).
Meanwhile, the entrepreneur has built equity from the ground up, gained experience, and now owns a growing local business.
What Might it Take?
To scale this model sustainably, we’d need:
A pooled fund of $5M–$10M as a starting point, to support multiple entrepreneurs and build a diversified portfolio.
A regional Atlantic Canada focus, to expand deal flow while keeping a community-oriented approach.
Professional management, for due diligence, coaching, and fund governance (which would likely require a larger scale than for an initial pilot)
A network of experienced angels and mentors – coaches who have rowed the race before.
A community of trust – this isn’t about flipping companies, but steady growth and local stewardship.
Conclusion
When I returned to PEI to after law school, I remember wondering if the Island could ever support a rowing club. The usual voices said it couldn’t be done – wrong kind of water, not enough interest, no money.
I shrugged. Others quietly got to work.
Now, thanks to their effort, my daughter rows at her own club four times a week.
So: Why a search fund for PEI? Why now?
Because the fundamentals are there:
Talented young entrepreneurs
Ready-to-retire business owners
A growing, experienced investor class active in this space
What’s missing is the structure – a mechanism to bring them together, and scale to professionalize the process.
This isn’t about pushing outside capital or chasing flashy exits. It’s about building something long-term – local entrepreneurs in the right boats, with strong coaching, ready to row their own race.
And if we do it right?
We’ll keep more great businesses in local hands, support the next generation of business owners – and maybe, just maybe, we’ll bring home some gold along the way.
Because, in my view: the world needs more PEI