I am just getting back from a ten day vacation and a, what turned out to be, exhaustive move downtown in Moncton. If I had Internet access this week, here are some of the stories I most likely would have blogged about:
I read that Jennoit Volpe is considering corporate tax cuts to stimulate investment. Now, I just read the headline on this but I hope that the Finance Minister is looking at tax cuts from specific stimulation of investment (i.e. you invest $100 million, we give you a ten year tax holiday) as opposed to just ‘cutting taxes’ across the board and hoping that results in investment. The latter is wishful thinking while the former has been shown to work in certain cases.
I read that the Federal government is evaluating whether or not to treat the aquaculture industry in the same way as the agriculture industry (i.e. massive subsidization). I understand that ACOA is now trying to attract external business investment into the region’s aquaculture firms. This is a better approach than setting up a large scale subsidization program. If large, multinational companies were involved in the sector it would have a much better chance of weathering the various economic hiccups than just a bunch of small, local aquaculture farms operating with less than six months of cash flow.
Bill Belliveau savaged Premier Lord in his weekly column in the T&T (I find it incredible that Al Hogan can meticulously generate an editorial bias in just about every economics-related story that is positive and then allow Bill to write such a hostile diatribe). Anyway, without commenting on Bill’s obvious disgruntlement with the current administration, his conclusion that we should refurbish the Lepreau nuclear power generating facility because we need its cheap power is illogical. The business case that was completed on this concluded that the massive investment ($1.5 billion) would generate large increases in power rates – not maintain low rates. If Bill is referring to the ongoing lower cost of nuclear power generation (after the investment) versus the relatively unstable coal or oil power production, he is right. However, that’s my point. We need to have a long term energy strategy that outlines a firm timetable for plant closures, new plant construction – and estimations of longer term demand. The province knows that many mills and mines are either closing or declining. This should reduce aggregate demand. Give us the facts. Tell us the truth. Then it will be at least mildly more palatable when we see the major rate increases as they come about.
Some enterprising journalist leaked some of the details around a proposed federal government plant to support New Brunswick. The People Building New Brunswick strategy, is said to be around $800 million. The multi-pronged, cost-shared, five-year strategy would include the participation of universities and community colleges, translate into more language programs, create immigration offices on campuses and ease restrictions on foreign students who would want to work in the province.
Read my lips, folks. You can spend billions on immigration, universities, small businesses, language programs, innovation, and whatever you want but if there are no jobs here – immigrants will leave and other Canadians won’t move here. It’s that simple. If the feds want to spend $800 million, give it in the form of a fund to attract foreign investment. Let’s attract 15,000 or 20,000 new jobs based on investment from global corporations. Then people will be needed to fill the jobs. Hallelujah.