A couple of interesting stories in the TJ this AM

Story #1:

There will be no special side deal from Ottawa to help New Brunswick with its ambitious $1.875-billion prosperity plan, says the new federal point man for provincial grievances.Michael Chong, the federal minister for Intergovernmental Affairs, said the new Conservative government in Ottawa has no interest in inking one-off agreements with individual provinces.


Story #2

New Brunswick government officials are finalizing assistance for UPM Miramichi’s troubled operations after meeting with senior company executives last week in Fredericton. Premier Bernard Lord and Natural Resources Minister Keith Ashfield met for longer than an hour with senior UPM Kymmene executives to discuss the future of the company’s two paper mills in Miramichi.

I hope this turns out well but I would sell the province’s soul. Newfoundland Premier Danny Williams provided a $120 million subsidy over 10 years just to sustain a few hundred jobs in Stephenville. Remember folks, it’s all about opportunity cost. Do you use $120 million to prop up jobs (in that case only 300-400) which are based on a non-competitive business model or do you invest $120 million in a business model that is positive and with a strong growth outlook?

I think because governments operate in 4-5 year increments – that tends to be the extend of their time horizon.

But broader issues like the fiscal imbalance and structural changes to the forestry industry will have implications well beyond the Premier’s election ambitions this year or next.