It's The Economy, Stupid

The TJ has an article today discussing the Acadian Peninsula Economic Development Fund.  It mostly makes the case that a lot of money has been spent for a very small amount of jobs.

I’m not going to critique this article except to say a couple of things:

1. This type of information needs to be in the public domain even though it does reinforce negative stereotypes of economic development efforts.  No good comes from hiding this stuff.

2. I think there in fact is a role for government to play in the funding of ‘studies’, historic buildings and industrial parks.  Who else is going to fund them?  It is the role of government to act on behalf of the public at large.  We can debate the relevancy of certain expenditures but we shouldn’t pretend there is no role for the government in the area of economic development.

3. The problem here is mandate creep.  I would argue that many economic development agencies (including ACOA) suffer from either bad mandates or mandate creep.  If the Acadian Peninsula Economic Development Fund was set up to create good paying jobs for the residents up there, the monies should have been used to leverage private sector investments that led directly to job creation.  There has been $105 million doled out since the Tories set up these Northern NB funding programs in 1999.  That’s a pretty good chunk of change that could have been leveraged into at least 4,000-5,000 good paying jobs in the North.

That’s why I like clean and neat investment attraction efforts.  There is almost zero politics (i.e. funding gravy train projects in local areas), no rewarding political friends, no funding for highly speculative projects (remember I didn’t like the textile mill projects from the start), etc.  The only politics, I suppose, comes into play when you are working with the companies on where to physically locate their operations – then there is fierce competition.

We need to get back to the fundamental need in the north for significant new business investment.  Every project funded up there should be put through that lense.  Every $50,000 in government spending should leverage $200,000 of private sector spending.