Think bigger, boys

BHAG – Big, Hairy, Audacious Goal (pronounced “bee-hag”)

Popularized in Built to Last: Successful Habits of Visionary Companies
by Jim Collins and Jerry Porras.

One last comment this A.M. on the economic development components rolled out by the parties yesterday.

It’s not enough. Not even close.

Lord rolls out another $100 million spread out over 4-5 years – which works out to be about $20 bucks a head per year. Or, once again, one of the lowest funded areas of government. Graham’s is not much different.

Shawn Graham has the amibitious target of becoming a ‘have’ province (to the chagrin of Al Hogan) within 20 years. As I have said before, my back-of-the-napkin analysis of this is that it would require doubling the size of the employed workforce and keeping government expenditures to a bar minimum.

A virtual impossibility save Ireland or Alberta-style economic growth.

But, if the Liberals have that goal, they had better start serving up some BHAGs. Even with the 9,000 call centre jobs and something like 10,000 government jobs, Lord still managed among the worst rates of job creation in Canada and managed to preside over a declining population.

A few more bucks ain’t gonna do it.

We need an ambitious plan – and I think the concept of anchor-type (think Michelin) projects will be required.

I know many of you laugh this off but I’ll keep on slugging. Ontario and the Feds just put close to $300 million into one auto plant for 1,200 jobs. The Feds have put $684 million into one company – Pratt Whitney in Montreal – over he past decade.

These piddly little $20 bucks per person programs aren’t good enough.

You say, where is the money to come from?

Well, Lord just announced a $284 million surplus this year. Where’s that money going?

I also think we need to be creative. The last mega deal I reviewed was an aerospace plant in the southern US. The total investment by the company was close to $1 billion and 2,000 jobs. The government incentive package was close to $200 million.

Here were the components:
Free land – 1,200 arces (no cash out of pocket for government)
20 year corporate tax break (no cash out of pocket for government)
Tax breaks on property, excise, inventory and other smaller taxes (no cash out….)
Training incentives (cash out but to train people – a cost most governments’ gladly – or should – accept)

That’s it. No cash. No grants. Nada. Tax incentives, land and training support.

And for those of you that will cry bloody murder about giving an evil corporation tax breaks consider this:

That project will generate close to $40 million in personal taxes each and every year (direct & indirect) which means this project has a payback on government investment of 5-6 years.

So, if you want out-migration to continue, 100k still on EI, labour shortages because our blue collar workers are leaving in droves, etc., keep up with your piddly little programs.

If you want to move the province forward, build an economic development strategy that is anchored in attracting global companies and supported by successful SMEs.