Moncton exceeding expectations
New Brunswick city making a name for itself as a place to do business
When Pablo Asiron and Keith Flynn launched RtTech Software in 2011, they had two obvious options for a home base: Halifax, where Flynn is based, or Moncton, N. B., where Asiron lives. They chose Moncton.
It helped that the New Brunswick Innovation Foundation was willing to put up seed money, but Asiron said there were other reasons for choosing Moncton, which is often overshadowed by Fredericton ( New Brunswick’s capital) and Saint John ( the province’s industrial heart).
RtTech makes analytic software that helps industrial companies track and boost the efficiency of their machines. Its client list includes Michelin, Rio Tinto, Barrick Gold, and New Brunswick’s J. D. Irving.
Moncton is home to low- rent office space and a strong pool of software developers, who are available at “reasonable” salaries, Asiron said. “I wouldn’t say cheap. Please don’t say that,” he said with a laugh. “My employees would want a raise.”
RtTech has doubled its ranks to 23 people this year. In February, it raised a $ 3- million Series A round. In Moncton, money will buy more resources than in, say, Waterloo, Ont., where the salaries of developers and the cost of rent are “outrageous,” Asiron said.
“When you’re doing any startup you want to lower the costs as much as you can, so you have a longer runway.”
Asiron is convinced of Moncton’s merits as an entrepreneurial city. It’s an argument supported by the city’s rise in the annual CFIB/ FP 2015 Entrepreneurial City Rankings.
Greater Moncton is 10th in the Canadian Federation of Independent Business’s rankings of metropolitan areas with populations of 150,000 or more. Last year, it was 21st, up from 36 in 2013.
Ted Mallett, the report’s author and CFIB’s chief economist, said Moncton’s rise is largely due to its performance in the “perspective” category, which measures the optimism level of business owners as well as their hiring plans and the city’s building permit activity. In that category, Moncton had one of the better scores in the country.
“Business optimism is a critically important driver to future investment and job growth,” Mallett said.
How could Moncton move higher in the Top 10? Mallett said improvements on the policy side would help.
For instance, CFIB calculates each area’s ratio of commercial property taxes to residential property taxes. The thinking is that a high ratio means businesses are being overly burdened with taxes.
In Moncton, commercial properties are taxed 2.7 times higher than residential properties of similar value. That level is worse than Saint John and Cape Breton, and only slightly better than Fredericton. “It’s on the high side for the region,” Mallett said.
Ben Champoux, the CEO of 3+, a Greater Moncton economic development agency, contends that Moncton’s rise in the CFIB rankings is part of the city’s transformation in the past 25 years, following the city’s major loss of Canadian National Railway jobs.
“We transformed ourselves from a small community with an uncertain future in the late ’ 80s to one of the fastest- growing urban centres in Canada,” he said.
Although lacking Fredericton’s government jobs and Saint John’s industrial might, Champoux said Moncton has benefited from diversity. No one sector boasts more than 10 per cent of the city’s workforce; and more than 80 per cent of the city’s 6,000 businesses have 10 or fewer employees.
Moncton is sometimes viewed as the third sibling of New Brunswick cities, but Champoux said that can be a benefit. “We always, always exceed expectations.”
Champoux said his organization’s mission is “growth from within”: encouraging the expansion of existing businesses and the creation of new startups. In September, that trend was bucked when Las Vegas- based BMM Testlabs, a gaming test laboratory, announced plans to create 1,000 jobs in the city. That company’s CEO called Moncton “an ideal location to grow our Canadian presence.”
So what is the downside to doing business in Moncton?
RtTech’s Asiron said he has been forced to hunt for technical sales talent outside of the city. And then there’s the local airport. There are no direct flights from Moncton to the U. S.
That means Asiron must fly through Montreal or Toronto, or catch direct flights out of Halifax ( more than two hours away) or Bangor, Maine — a four- hour drive.
RtTech has clients in 15 countries. Last year, Asiron spent half his time on the road.
“When you travel that much it starts to be a little bit of a nuisance.”