Stuck in rut – Exhibit A

You want a perfect example of why the Federal government has overtly politicized its role in economic development?

Here it is.

Here’s the deal. The Federal and Quebec governments spend billions of dollars directly through large contracts and directly through incentives (over $250 million in just the past two years to Bell Helicopter, Pratt Whitney and Bombardier) alone) and this is the single biggest reason the aerospace industry has grown to the size it has in Quebec.

Then, because of the size of the industry, they demand at least that much in new federal government aerospace/defense work.

Quebec will use its big guns to win its fair share of the offset business Boeing Co. must place in Canada as a condition for winning a $3.4-billion contract for four C-17 Globemaster jumbo military transports, Sue Dabrowski, president of the 222-member Quebec Aerospace Association, said yesterday.

“Quebec, with its diversity of suppliers, has 55 to 60 per cent of Canada’s total aerospace market, Ontario 30 to 35 per cent while the rest is split between the Atlantic region and the West,” she said.

“We’re shooting for the stars, but we won’t settle for less than 55 to 60 per cent of the offsets. … Boosting our technology and expanding our role in the international supply chain is critical for the industry’s long-term future.”

So, federal dough to grow the aerospace industry in Quebec and because of that investment the province now deserves 60% of all new government defense contracts.

Funny, huh?

My prediction? Despite the fact that the Federal government spends billions of dollars on defense contracts and hundreds of millions doling out incentive dollars to the aerospace sector it will never amount to much in New Brunswick. Globally, only agriculture gets more government incentives and has greater government involvment than the aerospace sector. It’s the same in Canada. At some point in our recent past, the Feds nurtured a nascent aerospace/defense sector in Quebec will billions of dollars of public investment.

Now, when a place like New Brunswick needs it the most, it will get none.

Harper says Atlantic Canada might –just might – get 5%-10% of the multimillion dollar benefits. but with Nova Scotia and PEI having at least some infrastructure, it is likely they will get the lion’s share of the crumbs sent this way.

So here’s the question. Sort of a chicken/egg thing. If the Feds spent billions to prop up Bombardier, Pratt, Bell, et. al. in Greater Montreal. Why wouldn’t they do the same in a place like New Brunswick? How about a $200 million contribution towards us attracting a large scale manufacturer?

Never going to happen. Not in my life time.

Ooops. I mean it’s never going to happen in New Brunswick.

The UK government last year spent hundreds of millions to attract large scale aerospace manufacturing to Northern Ireland. I am sure that the well developed aerospace industry in England didn’t like that very much but somebody over there is interested in fostering economic development in Northern Ireland.