Nova Scotia taking risks

As you know, my preoccupation involves the attraction of foreign investment to Atlantic Canada. My preference is for large, well-established multinational firms that are well-capitalized and have solid revenue and profit streams.

But not always firms with these characteristics can be convinced to locate in a place like Atlantic Canada so you modify your wish list a bit.

So, last week Nova Scotia announced that Versata, a California-based software firm, would be locating in Halifax and creating 75 new jobs. For those jobs, the province would provide them with $2.5 million in payroll rebates. This works out to just under $30,000 per job.

Now, Versata has include major losses – racking up almost $90 million in losses over the past four years on revenues of $80 million.

A bold move for sure but unlike New Brunswick which gives loans upfront, Nova Scotia gives ‘payroll rebates’ which I assume happen after the jobs are created.

A couple of points:
*Why doesn’t NB look at payroll rebates? They are less risky than upfront loans which may never be paid back.
*Why isn’t NB investing in a few bold ways like NS? A money losing California-based IT firm would send shudders through Centennial Place in Fredericton.

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