East Coast out-migration adds to debate on role of gov’t development agencies

MIRAMICHI, N.B. – Paul Barry says he’d like his small printing company to hire local people who are leaving this shrinking town, but the federal government isn’t making it easy.

He argues the Atlantic Canada Opportunities Agency – the main federal business development corporation in the region – is supporting a company that wins local printing contracts his small business covets.

“The bottom line for me is, I don’t want to compete against my tax dollar, which is basically what’s going on,” he says in an interview in his office at Newcastle Printing.

Barry questions why Coast to Coast Publications, a company that’s a 15-minute drive away, has received $909,419 in ACOA assistance since 1999.

However, the owner of Coast to Coast says ACOA has helped the firm look beyond its backyard and become an exporting company.

“I have a lot of respect for ACOA,” says Cindy Fairhust-MacDonald, whose company now specializes in hotel guest directories. “I’ve gone from sales of $200,000 to sales of $2 million and my sales are based out of the province.”

The debate between Newcastle Printing and Coast to Coast over ACOA’s role in the regional economy is not unique.

Other small operators are also questioning how the federal government funds economic development in Atlantic Canada.

In Cape Breton, the head of a non-profit golf course is asking why another federal development agency is helping build new golf courses.

Others, like right-leaning economist Brian Lee Crowley, think as labour shortages emerge – partly because of out-migration – the entire rationale for ACOA should be questioned.

Crowley, director of the Atlantic Institute for Market Studies, argues assistance from ACOA doesn’t help the regional economy over the long term.

For the past 40 years, he says, Ottawa created policies that were designed to “mop up” the excess workers of the baby boom generation.

“We’ve used ACOA primarily as an instrument to prevent economic change from happening,” says Crowley.

“You can use it to prevent natural resource industries from shedding work and that in its turn means that workers aren’t available to work in an industry that might have a greater future and be more profitable.”

Janet Gagnon, ACOA’s director of operations for New Brunswick, says the agency is helping support jobs that keep people from leaving the province.

“One of my personal philosophies on out-migration and attracting immigration is the best policy is a job,” she says.

In the debate between the printing companies, Gagnon says ACOA considers printing a “sensitive sector” that it generally doesn’t help because of the level of competition.

But she says Coast to Coast is an exception because of its emphasis on innovation and foreign sales. ACOA estimates its investment in Coast to Coast supports 14 jobs.

Miramichi has fallen on hard times after the closure of the UPM Kymene mill and the layoff of 600 workers.

Gagnon says ACOA has also had success in supporting jobs at companies in the Miramichi area like FatKat, an animation studio that now has 80 employees, and Sunny Corner Enterprises, a custom metal manufacturer that’s hiring 90 people.

Gene Fowler, president of FatKat, says in small communities the help provided by ACOA isn’t available from venture capitalists or banks.

“Our bank wouldn’t lend us money to purchase our building. I think they saw the mill shut down in this place, and they’re continuing to pull out of this region,” he says.

Nevertheless, there are other groups in Atlantic Canada that question spending by federal economic development agencies, such as support for golf courses.

In Cape Breton, Norman Williams, president of the Seaview Golf and Country Club, says Ottawa’s funding of several new courses could threaten his non-profit club’s viability.

He complains that Enterprise Cape Breton Corp., another federal business development agency, has approved more than $3 million in assistance for Ben Eoin Golf Club Ltd., about 20 kilometres from the Seaview club in Sydney.

Now he expects to lose about 30 per cent of the club’s green fees to the new 18-hole course.

“With the numbers down the way they are it is scary to think what will happen to the existing golf courses in the coming year when the new courses open,” he says.