I was part of the Maritime News discussion today on CBC – a panel discussion and call in on what should be the most important issue in the upcoming Federal campaign. The topics varied from how bilingualism is a drain on the economy to health care to the looming ‘deep integration’ with the US.
There were some callers discussing ‘economic’ issues but a lot of the traditional stuff around companies moving here for incentives and then ‘leaving after the incentives run out’ or the ‘race to the bottom’ or similar comments.
I still think we need to put everyone through an Economic Development 101 class. We can have disagreement on approach but fundamentally, everyone should realize that economies are driven by business investment and business investment is dominated by national and international firms.
These well intended social activists from rural PEI and Nova Scotia are feeding the Ontario economy with their pension fund and RRSP investments without even realizing it. If we had more of those large publicly traded firms here, at least some of their investment dollars would stay in this region.
We need small businesses. Sure. But small businesses do 99% of their business in local markets so if you want small business to grow, you need to stimulate the economy and you do that by attracting in business investment from outside.
And for those that believe cutting corporate taxes will work, please explain to me how. Corporate taxes paid in New Brunswick last year amounted to $152 million on a budget of $6.1 billion. It’s hard to see how cutting out that revenue would stimulate development. It would likely just provide a few more bucks for entrepreneurs to invest in their RRSPs and mutual funds which are investing in publicly traded firms in Ontario, Alberta, the US, etc.
Give me models for attracting our share of global business investment, please. I am fed up with all these theories about ‘innovation’ and ‘small business growth’ and ‘trade’. Cripes, we have spent 30 years trying to develop ‘value-added’ exports and 90% of our exports are still commodities – where the value add is added elsewhere.
Give me a Michelin in every city and town of 10,000 in Atlantic Canada and you will do more to grow this economy than all the EI, make work and small business growth programs combined. Period.
If you worried about these ‘Michelins’ leaving when the incentives run out – well then, give me another alternative.
I reiterate that judgement day is coming in Atlantic Canada. I’m no soothsayer but there were two more signs of it again this week. The Ontario Centre for Competitiveness and Prosperity issued another report warning that Ontario can’t keep subsidizing the rest of Canada and the Innovative Research Group released a poll showing that 40% of Albertans think Atlantic Canada is a drain on the national economy.
Either we get our act together and tackle our economic problems or we are going to get ‘rightsized’ real soon.