When the last bank branch closed on Grand Manan Island last summer, there were the expected stories that this was an example of the continuing loss of a rural island way of life.
Cue the sad fiddles and penny whistle.
What, posited the news stories, happens to a community when it loses its local bank?
I used to write these stories, but now, after having started and run two businesses for a decade-and-a-half, I know there’s only one reason any business closes: money.
When a business leaves town, you can bet that the money left first.
It left because of increased competition, a shrinking market, changing consumer spending habits, a lack of interest from would-be investors or buyers, or, as we witnessed during our two-year-long pandemic experience, an inability to adapt to the change wrought by larger forces.
So, what really sent Scotiabank packing from Grand Manan and its 2,400 residents? What money should we be looking at, and where did it go?
At the time, the bank issued a statement that claimed it closed the local branch “as a result of a fulsome business review.” It felt the relocation of services to a branch on the mainland, a 90-minute one-way ferry ride away, would “help us provide better service and greater resources to our customers.”
Uh-huh.
That’s a ridiculous statement, so I wasn’t all that surprised when I heard a different story when I visited Grand Manan last summer.
I was out on the water enjoying the seals and puffins with a retired captain and former village councillor when I mentioned the bank and its imminent closing.
He shrugged.
Scotiabank’s own fault, he suggested. Other banks gave the lobster boats better rates.
Pause the penny whistle lament because the penny just dropped.
Of course, I thought.
This isn’t a story of loss; this is a story of change.
Certainly, losing the last physical bank branch likely has caused challenges for people who deal in paper money and physical coins, such as small business owners and seniors who haven’t adapted to online banking.
But that’s not where the real money is on Grand Manan.
The real money is in lobsters.
Grand Manan is home to one of Atlantic Canada’s most lucrative lobster fleets, caught and shipped fresh and frozen all over the world.
In 2022, lobster was New Brunswick’s largest commodity export, valued at $936 million, in a province that has long thought of itself as a forestry economy.
It was in the 20th century, but two decades into the 21st century, and it is apparent money is on the move.
According to my retired captain/municipal councillor, he estimated the Grand Manan economy sits at around $360 million, built primarily because of four changes to the island’s lobster fishery.
The first was the growth of global trade, specifically the spike in exports to China.
The second was technological change, prompted by that growth in trade. For example, a demand for more lobsters led captains to invest in more traps, which required bigger boats and more sophisticated equipment to increase productivity, such as sonar technology to locate traps and measure the depth and shape of the ocean floor.
The third was the federal government’s decision to freeze the issuing of new lobster licenses to reconcile the balance between economic and environmental sustainability in the Bay of Fundy.
The fourth was another form of public policy reconciliation, brought about by the 1998 Supreme Court of Canada’s Marshall decision, which I covered, and which granted Indigenous people the right to fish commercially. To give them entry to the regulated lobster fishery, the federal government has been purchasing existing licences for the past 20 years and transferring them to Indigenous communities.
Combined, these four external forces – economic, technological, environmental and regulatory – have significantly increased the value of a lobster license.
As the captain explained, his father paid 10 cents for a license in the 1940s, he bought his license for $8,000 in the 1960s – and sold it in 2022 for just over $1 million, plus an additional $500,000 for his used boat.
For a business owner looking to make that kind of initial investment, finding the best lending rates and a commercial banker willing to work with you through the ups and downs of entrepreneurship is essential.
And if my sea-faring source was correct, Scotiabank wasn’t that lender.
Perhaps the bank didn’t leave Grand Manan; Grand Manan left the bank.
So those stories I read were half-right; the closure of the ScotiaBank was the end of an era – and it was the start of a new one.
If we want to understand change, we need to focus on where the money is going, not lament where it was.
We must shift perspectives and look for what lies beneath or risk being set adrift to bob upon a sea of unending uncertainty.
