To BNB or not to BNB? That is the Question

Several people have asked me to comment on the NDP proposal to scrap Business New Brunswick.  I have resisted because it really is a red herring – the NDP would just find other ways to do its brand of economic development. 

But there are some learnings here.  I think the question does need to be asked whether or not our collective economic development efforts are achieving what we want them to achieve.  If you were to ask BNB or any Enterprise Agency or ACOA or the CBDCs or any other of the groups doing ‘economic development’ in the province they would say they are achieving their vision and mandate.

I think we need to set the bar higher.  Determine growth sectors, set serious targets for investment and jobs and then work backwards to determine what policies need to be development, where each of the organizations fits into the effort and then create a strong value proposition for investing in those sectors.

The second point is the sprinkling.  Since I have been involved in economic development – 20 years now – BNB and its predecessors have played the role of a bank providing funds to companies around the province.  I think we need to have more focus.

Which brings me to the third point which is around measurement.   It’s relatively easy to measure the effectiveness of tax payer dollars being used in health care, education, transportation, policing, etc.  There are measurable criteria.   Economic development is not so easy to measure.  At a provincial level, I would like to see a rigorous incremental tax base measurement methodology put in place.  For every dollar invested in economic development, we get $X back in new tax revenue to the provincial government.

I realize this is likely never to happen although it is being used as a metric in Ireland, Quebec and other places.  The idea that economic development should be tied to growing the tax base should be a no brainer but you will find very few takers in the economic development system – which is too bad.

But implementing my measurement model would put to rest the whole question of BNB or not to BNB.  If the organization was clearly showing a return on taxpayer dollars invested – who could question that?

I suspect it is easier to talk vaguely about jobs ‘created’ or ‘retained’ and then about all the throughputs – counselled companies, funding announcements, training, etc. rather than on some end objective such as tax base growth.  But, in the end, what is the point of economic development if not to grow the tax base and support business investment?