In case you didn’t read the TJ today, here is Donald Savoie’s commentary recommending that now is a good time for Business New Brunswick to do some navel gazing. Savoie isn’t particularly delicate in his commentary but I think BNB would be wise to take his comments in good faith. Getting hackles up and overly defensive isn’t the right response. There is always room for improvement in any organization and I think BNB should be happy that there are a wide array of voices chiming in.
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There was a good online, interactive discussion tonight over @CBC during the Nova Scotia leaders debate. One of the topics? NSBI and its future. Many think it has lost its way and it is time to look for a new way of doing business.
My advice, do like Alberta did and ban corporate welfare altogether to firms and companies. Let them be in control of their future.
Savoie has been more lucid than this in the past. Exhorting BNB to “think outside the box” and stating the “need for political will” is not penetrating analysis. In any event, his observation that “RIM should have chosen NB” is based on specious logic. One of RIM’s key requirements was a greater [human] resource depth than NB could have accommodated. In fact, the conspicuous shortage of resource critical mass is perhaps the greatest shortfall in NB. I was with a firm in the late ’90s that made its selection decision precisely on that basis even though GNB tried to make the case that Moncton, Saint John and Fredericton comprises a “tri-city” metropolitan area. That’s worth pursuing further but a large number of parochial organizations would need to swallow their pride to support that model.
“…..Plante stressed the most important thing Business New Brunswick can do during the recession is to help the companies that are already in the province”
That is the head of the NB branch of CME. I guess a big problem in taking up Savoie’s idea is the mindset of the NB business community. What is different about NB’s business community vs NS’s (apart from the obvious)? Which NB business persons would make a good list of candidates for a more independent BNB board?
Savoie is probably correct – focusing on reforming BNB and ED efforts in general might be more productive than ‘tax cuts, tax cuts’.
“My advice, do like Alberta did and ban corporate welfare altogether to firms and companies. Let them be in control of their future.”
That’s funny, damn funny.
We know how to get results with economic development. We have seen it done here with the contact center industry and in other provinces and countries.
– Identify a strength or competitive advantage to market
– Get buy in from the region’s leader(s)and engage them in the process
– Promote the hell out of it; whatever the sector is, people have to beleive that NB is the place to be doing business if you are in that sector
– Introduce incentives to enhance the benefits of business in NB (not artificially prop it up). This does not have to be corporate welfare. There are other approaches that work.
– Reinvest and build on the results (this is where NB failed with the contact business; 20 years later we are still marketring the same thing in a more competitive environment)
This ought to influence all ED investments and stratigies. There has to be focus. We are getting far away from the goal when we have ourselves convinced that funding lawn mowers is going to get us where we need to be.
@richard
Could you please elaborate?
@richard
“That’s funny, damn funny.”
Could you please elaborate? I really didn’t see anything funny in Scott’s statement.
“There’s a crying need to think outside the box”
> As a former resident of NB, my humble (but strong) opinion is that there is only one way to do this: bring someone from outside the box to run BNB.
Why is that so hard to believe, Richard? It’s common fact that during the 70s, 80s and well into the 90s, Alberta was the most heavily subsidized province in the federation. From 1986 to 1995, a time period when the Alberta government suffered it’s toughest economic constraints, spending on ED (grants, loans, loan guarantee programs, so on and so forth) exceeded 20 billion, a sum unrivaled by any other province as I earlier indicated (it should be noted alot of that happened under Lougheed and Getty).
Under the Klein government (a government that enforced the corporate welfare ban), industrial development spending and corporate welfare loans (over $1 million) began to decline significantly. Yes, it could be noted that during his time in office revenues skyrocketed under good circumstances as a result of high oil prices, a booming economy and a strong agricultural sector (mainly beef) which, in turn, led calls for subsidies to grow quieter. But not once have I ever said that a poor economy shows higher subsidization of its economy, I don’t dispute that. What I dispute, is exactly what David and Mr. Savoie are suggesting, and that is to entrench ED spending into the fabric of government so it is there in times of prosperity. What I have always touted as a response to that ethos, is the exact opposite reaction, which is to decrease corporate welfare spending in good economic times and eventually phase most of it out. As well, I make no bones about it (and always have) that corporate welfare spending in good or bad times should never be awarded to a company that can’t prove (in its business plan) that it can stand alone after so many months without subsidy help. Furthermore, it is preposterous that companies like Rogers receive further help in the form of forgivable loans when they are already well settled in the area and their quarterly shares reach record profits. That is nothing more then corporate blackmail, much like what went down in Quebec with bombardier when they threatened to pull out if the gov’t didn’t cough up more cash.
So yes Richard, I take a bit of offense when you laugh stuff like this off.
That should read, “But not once have I ever said that poor economic conditions result in a decrease in subsidization of the economy.” (The bailout situation is proof of that)
“So yes Richard, I take a bit of offense when you laugh stuff like this off.”
Tough. Anyone who claims AB is free of corporate welfare is blind to reality. The oil industry in AB has gotten huge breaks for decades; that still continues. Not just tax breaks (you don’t think that’s corporate welfare??) but environmental regs that look the other way. AB and fed taxpayers will eventually have to pick the bill. Corporate welfare is alive and well in AB.
@richard
“environmental regs that look the other way”
> Richard, unfortunately, it shows that you are just repeating what you hear and don’t actually know much about environmental regulations in Alberta. Yes, there are gaps, but also a good number of initiatives to address these issues.
@richard
“The oil industry in AB has gotten huge breaks for decades; that still continues.”
> All the complaints about taxation and royalties are not making its way to the press in NB?
I regard “targeted tax breaks” (such as the ones Harper introduced for a certain family demographic) as less successful then “tax cuts across the board”. Other then that, I’m a capitalist, so I’m not going to sit here and whine about the fact that a region (and a particular industry) are successful in our country. Probably because I see the redistribution of wealth as a drag on both upper and lower income people. Time to stop picking winners and losers folks!
Anyway,hopefully we can find our way in the federation like many other provinces are doing. Although, I don’t see the “dependency on government attitude” to subside anytime soon in NB. it’s still woven well into the fabric of society, not to mention, it is evident (and quite strong) in this thread.
@richard
Check this out:
http://www.edmontonjournal.com/business/Alberta+leader+climate+change/1618564/story.html
Minimum till and no till agriculture have been ‘in vogue’ for years now, what they don’t talk about is the fact that it requires MUCH more pesticide to control weeds and pests. However, notice that this is talk about Alberta agriculture-not oil. Alberta has been heavily subsidizing its beef ever since mad cow, and new tax credits on pesticides simply means a change from one type of pollutant to another.
And again, the most impressive ‘corporate welfare’ scheme in Canada has nothing to do with the environment or transportation but with natives. That is corporate welfare of a type restricted to several countries, and which is worth BILLIONS to corporations, and some to small landowners, but not many of those remain.
Alberta is no different than NB in that regard, and to talk about corporate welfare in the new reality of business is simply crazy. Virtually EVERY industry has been shown to be nothing but an illusory bubble that bursts without huge government bailouts. The most effective countries in the world have been those which ignore the corporate mantra “privatize the profits, socialize the risks (costs).”
That’s just plain old reality, so bickering about which province does more or less ‘welfaring’ is just silly. Scott’s point about capitalism is apt, unfortunately he doesn’t remember the origins of capitalism very well-the whole POINT of capitalism is the ‘distribution of wealth’. Those that try to argue that a ‘free market’ is capitalism are bastardizing the term. Adam Smith made the famous quote that two businessmen together can be assumed to be conspiring to rip off the public.
Personally, I see no difference between ‘dependancy on government’ and ‘dependancy on corporations’. Except one-in the former case it is assumed that the population plays an active role in its proper function, in the latter, its nothing more than what was being fought against by many forgotten soldiers during the US civil war-wage slavery.