The politics of economic development

I think when you get right down to it most rational people see the need for communities to be involved in economic development. What most people do not like is this. $65 million as a direct subsidy to keep Stora Enso open for a few more years. In other words, the plant would have closed. The government stepped in and propped it up with $65 million in taxpayer money with no idea that it will continue to operate after the subsidy runs out.

I understand the politics of this. Small towns. Mill towns. Major upheaval if the government doesn’t step in.

But I would prefer to see $65 million spent proactively to help the economy adjust to the 21st century – not to hang on to the next election.

We do that in New Brunswick, too. UPM got $5 million from the former Premier to stay open past the next election. Just a little capper. But the point remains the same. Of course, the tens of millions sunk into the textile mills in New Brunswick is exactly the same thing.

It would be actually interesting to see how much money goes into bailing out bad or failing companies compared to how much is invested in the future. It would be interesting to know how much taxpayer money is used to eliminate bank risk with government loan guarantees. I would be curious to see how many small business loans or credit lines in Ontario are guaranteed by the provincial government. I just have no idea.

My guess is that we spent way too much time and effort trying to keep bad businesses afloat and stimulate new business start ups compared to attracting global players. And just in case you want to hurl an insult my way about my global company bias, remember I just criticized the Stora Enso deal above – Stora is a huge multinational. I don’t discriminate. I don’t like the government bailing out companies or doing the job of banks – whether the company is large or small.