An instructive example

You see, now this is an instructive example. The Canadian government sets up something called Sustainable Development Technology Canada to invest in clean technology development.

I, among others, have said multiple times that part of the ‘energy hub’ concept in New Brunswick should be clean energy technologies and related products. But, of course, not one project in this round of funding goes to a New Brunswick project.

In fact, since April 2002, SDTC has completed ten funding rounds, committed $285 million to 125 clean technology projects. Guest how much has gone to New Brunswick projects? $2.3 million. 0.8% of the total funding. Less than one per cent. Of course, 0.8% is better than the 0.2% from this fund.

The truth is simple. New Brunswick spends all its time begging for more Equalization and social transfers while all the Federal funding programs designed to stimulate economic development go virtually untouched.

This is nothing short of a shame. Billions of Federal dollars – SDTC, TPC, NSERC, NRC, on and on – New Brunswick gets a fraction of anything close to ‘per capita’ dollars but for welfare, we get well above ‘per capita’ dollars.

And now, Daulton McGuinty has fought for and won the new federal policy of serving up Health and Social Transfers on a ‘per capita’ basis.

One has to wonder if old Daulton would agree to all the SDTC, TPC, NSERC, NRC, etc. dollars to be divvied up ‘per capita’ (Ontario gets the lion’s share of virtually all these programs – Quebec second).

Some enterprising and cranky researcher should do the math. Take the billions in R&D the feds spend in Ontario. Take all the economic develpment programs (like those mentioned here) spent in Ontario. Take all the federal government employment in Ontario. Divvy that all up ‘per capita’ (like old Daulton gets for health and social transfers) and see if New Brunswick comes out ahead.

That would be a lot of work but an interesting project. I, for one, would take economic development leveraging funds over EI or even Equalization any day.

This entry was posted in Uncategorized. Bookmark the permalink.

0 Responses to An instructive example

  1. Anonymous says:

    Now you are on to something. These programs are specifically designed to make federal dollars flow to targeted sectors. For example, TPC was designed to flow aerospace money into Quebec (and some automotive money into Ontario). This is absolutely how NB needs to position itself to grab more federal money and stimulate our economy.

    The challenge? Well, SDTC for example provides 30% dollars. Business has to come up with the remaining 70%.

    Here is where some progressive policy could come into play. The major NB spend commitmenmts over the past few months have been $100M to tourism and $60M to the Caisee scandal. Perhaps we’d be wiser to have set up a $160M fund to help leverage some of this federal money.

    Imagine the applications that would come forward if NB business came up with 10% R&D money, 30% came from PNB, 30% from ACOA (or VCs) and 30% from the federal program of interest. That is how Quebec and Ontario do it and NB can, and should, do the same.

  2. Anonymous says:

    Quick, name ONE ‘green energy’ technology program going on in NB for the feds to put money into.

    Let’s run down the list:

    NB wants to do more coal…nope, doesn’t qualify
    NB wants to build another refinery…nope
    NB wants to build more nuclear reactors…..nope

    Tidal? Wind? Solar? MicroHydro? Geothermal? No such research going on. These programs require application. You can’t fault the feds because the province is bypassing green energy. Name one green energy group that applied for funding but didn’t get it.

  3. BooBear says:

    No offence, but McGuinty seems to be the only Premier to understand how important these funds are and has made them the cornerstone of a concerted effort to attract research dollars. Ontario is the only government to have a dedicated minister devoted to research and innovation and McGuinty thought it was so important that he’s the minister for that portfolio. Outside of the federal government funding, the province has funded billions in additional programs – Ontario Centres of Excellence, Regional Innovation Network, etc.

    As for the cleantech industry, again it’s about mindset. Ontarians are making a concerted effort to be players in this space. A willingness to pay $0.14Kw/hr for renewable energy has attracted a lot of big names, like SunEdison, who are pouring money into local firms for primary and ancillary services. The province (no federal money) has setup a $650-million to develop green automotive technology. Hell, how many newpapers have a dedicated business columnist for cleantech – only one, The Toronto Star (here’s his blog – http://tyler.blogware.com/)

    I sympathise with your efforts to encourage the kick start the NB economy, but I think it’s difficult without the right mindset and proper scale. I have read about a lot of smaller jurisdictions using a “pilot fish” strategy where they work with successful established cluster to nurture unexploited niches.

  4. Anonymous says:

    No offence, but McGuinty seems to be the only Premier to understand how important these funds are and has made them the cornerstone of a concerted effort to attract research dollars. Ontario is the only government to have a dedicated minister devoted to research and innovation and McGuinty thought it was so important that he’s the minister for that portfolio. Outside of the federal government funding, the province has funded billions in additional programs – Ontario Centres of Excellence, Regional Innovation Network, etc.

    As for the cleantech industry, again it’s about mindset. Ontarians are making a concerted effort to be players in this space. A willingness to pay $0.14Kw/hr for renewable energy has attracted a lot of big names, like SunEdison, who are pouring money into local firms for primary and ancillary services. The province (no federal money) has setup a $650-million to develop green automotive technology. Hell, how many newpapers have a dedicated business columnist for cleantech – only one, The Toronto Star (here’s his blog – http://tyler.blogware.com/)

    I sympathise with your efforts to encourage the kick start the NB economy, but I think it’s difficult without the right mindset and proper scale. I have read about a lot of smaller jurisdictions using a “pilot fish” strategy where they work with successful established cluster to nurture unexploited niches.

  5. David Campbell says:

    All good points. Regarding Federal programs, there should be a provincial strategy – rather than just hoping. NB should be on Clean Tech. What is stopping us? It’s a growing sector. It fits nicely with the ‘energy hub’ concept (or it should).

    As for boobear, don’t get wrong. I think Ontario has always been much better at leveraging public funds in support of sector development than a place like New Brunswick. I just find it ironic that our Premier or regional leaders in Atl. Canada aren’t as vocal about getting ‘per capita’ dollars from these programs as Daulton was about health and social transfers.

  6. mikel says:

    They aren’t vocal for the obvious reasons..namely the political ones that became obvious with their ED stance. Economics is politics, or maybe ‘its the politics stupid’

    Why the province isn’t ‘going green’ is obvious by looking five seconds at the sector. Green is about supplying LOCAL needs first and foremost. To restate what I blogged, NBPpower was SET UP to meet the needs of the mining industry, NOT New Brunswickers.

    Going green means big losses for guess who, the nuclear industry which employs virtually all the technology graduates who stay in NB and is a patronage cash cow, and of course Irving who is, well, bigger than NB Power.

    I may be wrong, perhaps there are groups that applied, and the feds told them to get lost. I doubt it, they’d have no reason to. The feds operate like a bank, if a community or province doesn’t have the initiative, they aren’t going to go out LOOKING for them.

    So there’s no doubt the buck stops with the province in energy, thats their game, they have complete control. If there are no green initiatives then you can’t be surprised the feds don’t INVENT them. I do recall though some funding for tidal around a year ago for someplace around Grand Manan, but I don’t remember the details.

    Get lobbying for research and organizations in this area, that’s what every other province is doing. They literally ‘gave away’ wind power. In fact, for all those Atlantica fans, why isn’t there any comment that PEI has a deal with a company to get wind turbines, so why the hell wouldn’t the province join in with them? They could probably get a deal when buying more, and they could use PEI’s expertise.

    But instead they simply tell an Alberta company they can have it with a guaranteed profit. Again, that’s why so many people protested Atlantica, because it is SO obvious the group has an agenda and has nothing to do with the actual provinces.

  7. NB taxpayer says:

    You make some excellent points about the political interference of such federal programs as the TPC, NSERC, NRC, etc.

    However, one thing to note here is that corporate welfare programs, such as the TPC, do not work — even for the auto sector in Ontario (WHICH YOU REFERENCE QUITE A BIT).

    For example, General Motors and Ford have received hundreds of millions of dollars in handouts and MPs and cabinet ministers are always front and centre at these announcements touting the jobs being created. (think Industry Minister Bernier last fall)

    But in reality, both companies continue to lay off their workers. In January 2006, Ford laid off 2,300 workers in Canada, not to mention, in 2005, GM laid off 3,900 Canadian workers in an Oshawa plant. A total of 30,000 GM manufacturing jobs will be eliminated from 2005 through 2008.

    This is quite damning for business subsidies, especially for repeated offenders like GM and Ford, since the arguement in favour of corporate welfare is that it creates jobs, spurs economic growth and encourages R&D. However, all three pillars mentioned above are achieved at a much higher level when government is limited and taxes are low. Just look at RIM as an example. TPC funding didn’t become involved until the launch of the blackberry (very late).

    And as you can see by their [RIMs] repayment (or should I say non-repayment) of their 38.4 million dollar TPC loan, not to mention, their quarterly profits, it was nothing but a total waste of taxpayers money to grant that firm subsidies in the first place.

    Government should let the market do it’s work with these types of firms, not bureaucrats and politicians.

  8. Anonymous says:

    NB Taxpayer – You are absolutely correct. Government involvement in any activity generally has the effect of adding red tape and reducing logic. Natural market forces will always do a much better job.

    But the trouble is that governments around the world will not stay out of business. Far more important than government funding is government policy. Look what shipbuilding policy has done for Korea versus Canada for example. Look how transportation policies have impacted the Canadian economy (e.g. wheat).

    Entire Federal departments have been created and dedicated to building the auto industry in Ontario and the aerospace sector in Quebec. Laws and trade agreements were created to help business thrive (sure, FORD and GM are suffering at the moment but look at the contribution to the economy over the last 50 years and consider that customer-focused companies such as Honda and Toyota are now moving in). Consider the huge spin off effects for the supply chain (e.g. Magna Corp).

    So, do you think it is time for NB to have some federal funding focused on growing a promising sector, such as clean energy, and back that up with some government policy to stimulate the sector? IF we (NB) would allow for some focus, I think it would have a chance for sustaining benefits. As a taxpayer, I rather invest in a clean energy industry that employees engineers and welders than the current photo-op announcements for tourism information shacks that employ summer students.

  9. NB taxpayer says:

    Great question anonymous?

    I guess I would answer that by saying: the problem is that our country is fairly bulkanized along regional and political lines (and has been for quite sometime), so relying on regional development schemes to spurn on economic growth in a small province like New Brunswick, with little political clout, is a risky venture to engage in.

    If you get a chance, take a look at the old regional development model [DREE] which was administered under the Trudeau government and had every intention of moving our region into self-sufficiency mode. I won’t get into the intricacies of its overall failures or successes, but I will note why it shifted its focus away from the Atlantic region. Plain and simple, meddling government bureaucrats and politicians.

    I guess that’s the problem with these types of development programs and agencies, people who don’t receive them always cry foul and threaten to expell their local Minister, MP or politician if they don’t change the current situation. Not to mention, it’s the risk one takes for being dependent on such things.

    Initially Department of Regional Economic Expansion (DREE) was put in place to focus on economic expansion in Atlantic Canada and Eastern Quebec, and for a brief time, it was working.

    However, when the pressure was put on its administrator, Quebec Minister Jean Marchand, to expand its jurisdiction to an economically slow Montreal region, the program was changed and cutbacks were made which slowed the flow of subsidies into the Atlantic region. So, like I said, it’s a risky venture to rely on these sorts of things when we (as a province) don’t carry the political clout of central Canada.

    In other words, this should be more of a reason why we should reject the policies of the feds instead of being reliant on them. Not to mention, maybe it’s time to focus on policies that don’t involve them. (i.e. Lower taxes, less government and a healthy private sector)