Calling Frank McKenna

Right up front, let’s be clear that I am not picking on either TD Bank or Frank McKenna. It’s just that I came across this information in their well written 2006 Corporate Social Responsibility Report and it helps support my point here in this blog.

Firstly, TD pays less than 1% of its provincial taxes (income and capital) in New Brunswick.

In addition, the bank employs less than 1% of its people in New Brunswick.

Why?

Probably the fact that one tenth of one percent (0.1%) of its loans to business are in New Brunswick as shown in the chart.

So, what’s my point here? Assuming that the other banks have similar debt in New Brunswick (some higher/some lower), it becomes pretty clear that the banks aren’t investing too much in New Brunswick. In fact, at less than 20% of Nova Scotia’s TD invested capital, it’s pretty bad.

So, to sum up. TD Bank is not ‘risking’ its capital in New Brunswick firms (I make no direct reason for this at least in this blog – I am just stating a fact). As a result it pays almost no tax here and it employs relatively few people here.

So for those of you who criticize my desire to attract foreign investment (of which I obviously include ‘national’ investment), take a long hard look. Embedded in this blog is a primary reason why New Brunswick has been mired among the weakest provinces and states in North America.

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0 Responses to Calling Frank McKenna

  1. mikel says:

    That’s not exactly ‘foreign’ though:) I don’t say it enough but this is the best blog in New Brunswick. If there were a prize dude, you’d get it. We’ll send you a six pack of pumphouse, how’s that? Or if you prefer, I’ll just stop posting since I know my points are as repetitive as yours.

    With figures like that you don’t NEED to have a point. What is quite interesting is the comparison with Saskatchewan. There, the low numbers make sense because they have public insurance. Where would you find that document, because it would be great to look at the other banks. We talked about this at other blogs when talking about the Credit Union issue. Yes, its too bad they’ve got to be bailed out, but at least they are trying.

    Its a bit of a catch-22. No doubt that nobody talks about a new free trade deal that would involve financial services. No surprise that banking and investment was protected under NAFTA. American banks are head and shoulders above canadian ones for at least fostering local growth, most american banks require a percentage of deposits be kept local.

    However, since banks do insurance you add into my public insurance argument, you’ve just proven where New Brunswickers money goes, so the question becomes, is it better to nationalize it and keep that money local? Your argument is essentially that since NBers give money to ontario central banks, they SHOULD invest here. Trouble is you can’t MAKE them, which means looking at option two, throwing them the hell out. That takes real balls.

    But whether the companies are in NB is another question. Irving and McCain are international, they go to New York for their banking. It would be interesting to have a list of companies ‘looking to grow’, then at least some sort of lobby could be set up. When you combine Irving with the nervousness that companies feel when companies rely too heavily on government subsidies, I think there is probably a real problem.

    Sorry to post at every one of your threads today, they’re just so damn good I couldn’t help it. At least you know SOMEBODY is reading and taking it seriously eh?

  2. David Campbell says:

    I’ll take whatever is given. The TD info is in the corporate social responsibility report. I assume it’s the same for the other banks.

  3. Anonymous says:

    Do you think that they have a special credit rating criteria for an NBer when they apply for loan which is fundamentally different from Ontario? I’ve received a credit line from a major “Ontario” bank – they stick all my historical and projected financial data into their credit rating system and then some algorithm determines if my company a worth of receiving funding. I’m sure that credit algorithm is pretty much the same regardless of where you reside. Now if you want to truly gauge how “risk capital” is being dispersed, look at how the BDC doles out its money.

  4. Anonymous says:

    I’m not sure about that, interesting comment though. Isn’t the BDC where you go when you can’t find financing elsewhere?

    Either way, New Brunswick has more clients in NB than Nova Scotia. NB has 1109 clients, NS only has 807. Total invested in NB was 364 million in 2006 and $237 million in New Brunswick. Not sure what that means, but in there annual report they don’t feature any NB companies.