by David Shipley FREDERICTON – Premier Shawn Graham says he’s prepared to bring cash to the table in order to attract new firms to the province. Graham said New Brunswick’s relatively small size allows it the flexibility to tailor incentive packages needed to attract new businesses to the province. The province’s advantages over other regions include a highly-skilled and bilingual workforce, world-leading broadband Internet access, close proximity to the U.S. market and energy security, he said.Graham said his government’s long-term economic development focus is on the energy sector.
As published on page C1 on November 17, 2006
“We’re going to tailor the approach that’s needed, but there are a number of tools and instruments that we can use to provide financial assistance,” said Graham on Thursday.
“That means looking at loan guarantees, direct loans that are interest-bearing, equity investments [and] there are land leases that can be used in the agriculture sector.”
Graham said the province also has a strategic assistance fund that it can use to attract new companies.
“That’s a tool that was created to provide an incentive for external companies that create jobs under a payback model for the tax base.”
The rookie premier has just completed his first trip to Bay Street to meet with some of Canada’s top business executives. Former New Brunswick premier Frank McKenna helped organize the trip.
Business New Brunswick and the Department of Energy are in the process of developing a joint sales team to market the province to energy companies, said the premier. Both Business New Brunswick Minister Greg Byrne and Energy Minister Jack Kier travelled with the premier for the day-long trip to Toronto.
Graham said he spent time in Toronto meeting with Atomic Energy of Canada Limited and Bruce Power to develop leads for the energy sector.
Steve Demmings, president of Site Selection Canada, said the government would do well to focus on a strategic emerging sector and to develop a sales team aimed to sell the province in that area.
“All jurisdictions are facing the same types of challenges right now in terms of reinventing their economies,” he said.
In order to compete, New Brunswick will have to differentiate itself and develop global links with emerging economic powerhouses such as India and China, he said.
Charles Cirtwill, acting president of the Atlantic Institute for Market Studies, said the province should avoid offering financial packages to attract businesses.
“It’s far better for them to build an environment where it’s actually possible to do business,” he said.
The new Liberal government should focus on making New Brunswick the most tax-competitive region in North America and make more investments in the Internet and highway infrastructure.
Cirtwill said while other regions may offer financial incentives to companies, New Brunswick doesn’t have to follow suit.
“If the business case is there, if it is sound and if its sufficiently attractive that it makes the subsidies that other people are giving less attractive or as a short term solution “… that’s going to be far more attractive than a one-off cheque in the mail.”
The Liberal government should stick to campaign promises such as moving from worst to first in education and weaning New Brunswick off equalization payments, he said.
Cirtwill said it’s hard for governments to avoid the temptation to open up their wallet when it comes to luring new companies.
“It’s much harder to build a welcoming environment and make yourself attractive and competitive than it is to simply open the chequebook and gloss over your weaknesses.”
Simon Lono, a St. John’s-based business consultant, is critical of government subsidies to private companies.
“Do you want to be attracting companies that are coming to you because you give them 10 per cent or 15 per cent of their cost?” he said. “Do you want to be replacing banks in terms of offering loans?”
Lono said there are many factors that make New Brunswick attractive as a business environment without direct financial assistance from government.
“If [the province] starts getting into the loan game or grant game, that kind of thing, there’s lots of states out, lots of provinces that have a lot more money than New Brunswick to be at that.”
