Invest in New Brunswick?

Our province is going through rough economic times. Since the 2008 economic crisis brought upon us by our friends in the financial world, we have not been able to halt this downward economic slide.

Our very courageous Minister of Finance, Blaine Higgs, has taken all kinds of drastic economic measures to redress the situation, but to no avail. He has cut public jobs and services, raised user-fees to the tune of $44 million, hiked the gasoline tax, and more. The only places he has not siphoned are the pockets of his friends in the corporate world. New Brunswick has one of the lowest corporate tax rates in Canada. In the 2012-2013 budget, Minister Higgs even introduced a 50% tax cut for small and medium-size businesses.

Meanwhile, our government has put in place a wide array of economic tools to help the business community prosper, that is, to create more wealth for themselves. Our decision-makers hope that the ‘trickle down theory,’ which says money given to the wealthy will eventually make its way down to the rest of society, can be used to improve the provincial economic situation.

The first such economic tool was generated by the Department of Economic Development. It offers a number of programs designed to help old and new businesses: the Digital Media Development Program; the Financial Assistance to Industry Program; the NB Growth Program; the Technology Adoption and Commercialization Program; and the Trade assistance Program.

This same Department is also managing two specific funds put in place to help the North: the Northern New Brunswick Program, with a $200 million dollar budget, and the Economic Development and Innovation Fund for the Miramichi area with a $50 million dollar budget.

We also have a second department that invests in businesses. The Post-Secondary Education, Training and Labour Department administers the Employer Wage Subsidy-Workforce Expansion Program that gives employers a wage subsidy. This means that, instead of employers paying all their own employees’ wages, the government gives them some tax dollars to help out. In 2010-2011, this program handed out more than seven million dollars of taxpayer dollars to private businesses. The year after, in 2011-2012, close to three million dollars from taxpayers was handed over “to provide a helping hand to employers.”

While the average New Brunswicker flounders in heavy seas, a third financial lifeboat is given to the corporate sector in the form of the brand new Crown corporation named, Invest NB.  Its board is composed entirely of the ‘captains’ of New Brunswick industry. They’ve been given the tough job of dishing out millions of dollars in subsidies to private business. Within the first year, they spent more than eight million dollars, with 86% of those public funds going to subsidize the wages of just eight companies, most of which were international in scope.

And we could add to these tools, the twelve new Economic Development Districts that have been put in place by Minister Paul Robichaud to help local and regional businesses access grants and subsidies.

At the federal level, investment money is handed out by the Atlantic Canada Opportunities Agency, the Canada Business Program, and the Community Business Development Corporations, to name but  a few.  These federal agencies are giving their big New Brunswick brothers in businesses a helping hand by shovelling federal tax dollars into their seemingly bottomless corporate pockets.

So we ask: What is the problem?  Why is our economy not flourishing? Why have we lost 7,800 full-time jobs since 2008? Why is our provincial unemployment rate still 10.5 percent, and as high as 15 percent in the north, compared to a 7.3 percent rate nationally?

Why are New Brunswick’s information and communication technology companies like Radian6, Q1Labs and Med Senses being gobbled up by international interests? It is very strange indeed that the New Brunswick Information Technology Council (NBITC) says this loss for our province is really a gain!

NBITC CEOs equate personal gain for investors with the common good of all New Brunwickers.  As he put it, “The money the principals earned from these sales will enrich our community in more than the literal sense, and for years to come.”  Really?  The new international company, Salesforce-Radian, that took over Radian6, was given, this year, a $3.8 million wage subsidy by Invest NB.  Is this truly the best way to enrich New Brunswick?

What is going on? With all the government money for infrastructure and wage subsidies now being forked over to them, could it be that business owners have become used to feeling quite comfortable and dependent on government assistance? Have they, perhaps, lost the urge to do their part in building their own companies and now want government to share the risk (but not, of course, any profit)?

The suggestion that our business leaders don’t have the economic smarts to compete would seem shocking to some.  Yet, it is no secret that many businesses seek support from the public purse, and proclaim their enterprises unable to survive without some form of corporate welfare.  I would really like to hear from businesses that don’t have their hands elbow-deep in the public’s pocket. I am sure that the entrepreneurs who don’t rely on government subsidies and bailouts could offer sage advice to those that do.

Jean-Claude Basque is a social activist and was coordinator of the 2010 forum, It’s Our Economy Too!