Commitment matters

There are only a few ways that government can impact economic development. Admittedly, they can have profound effects – positive or negative – but you can boil down the options:

Direct funding of economic development (incentives, R&D, direct training, marketing, etc.)

Focused funding on things that influence economic development (education, roads, rail, etc.)

Regulatory/legislative issues

Something I would call embedding a culture of economic development within government

This is an example of direct funding of economic development. A billion dollar fund taken from oil profits directly to fund research and development and to attract large R&D players to the state of Oklahoma. On a population base of $3.5 million, that’s about $286/per person. Certainly not Ireland in its spending, but a good figure. Remember, this is not all ‘economic development’ spending, just this initiative to encourage more R&D in the state.

Contrast that with New Brunswick. Bernard Lord set up the ‘Innovation Foundation’ to be the catalyst that would move New Brunswick from last in R&D spending to in the ‘top three’ in Canada. Then he funded it with $25 million (or about $33/per person) – nine times less than the Oklahoma initiative.

I had calculated then, an easy calculation really, that if New Brunswick wanted to be in the ‘top three’, it would have to spend at least another $100 million per year (not over many years like the Innovation Foundation’s $25 million). It’s a clear calculation. Either you a) ante up the bucks yourself as a government or b) you go get it – federal government or private sector.

Simple, really.

My point is that all this talk of self-sufficiency doesn’t mean much without commitment. And just getting economic development spending back to mid 1990 levels (as a percentage of the budget) would require 10s of millions more each year.

We didn’t see that in budget #1, I doubt we will in budget #2.

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0 Responses to Commitment matters

  1. nbt says:

    My point is that all this talk of self-sufficiency doesn’t mean much without commitment. And just getting economic development spending back to mid 1990 levels (as a percentage of the budget) would require 10s of millions more each year.

    More spending? I guess if that’s the way u see it. However, I’ll go out on a limb here and say we need to tighten up our spending (at least cut back on our health care spending as a percentage of our GDP). British Columbia did this with great success back in the early part of premier Campbell’s first term (I know how u love the ring of that lol). I think he was of the mentality that you set the agenda early (and deal with cranky unions who disagree with the tough measures) so that you can concentrate on important fiscal measures later in the mandate such as personal tax cuts, incentives for R&D development and small business/KBE as well as money to provide for much needed environmentally friendly infrastructure.

    At the moment, it doesn’t look good in our neck of the woods as Graham’s crew has shown no backbone for tough measures that will open up the economy to business. His tax increase to citizens and SMEs (when every other province is looking to decrease taxes) was a step in the wrong direction and does nothing more than increase state presence on each and every NBer. Not to mention, his penchant for loans to polluting companies in decline is atrocious.

    Because of our checkered past, we really do have to find a way to cut back on wasteful spending, sever the umbilical cord to government friendly firms and start building a province that not only our citizens will be proud of, but outsiders will be as well.

  2. mikel says:

    Again, NB spending is a bare minimum, hardly ‘out of control’. It’s actually GOOD that views like NBT’s are marginalized, because if the NB government were to do what the BC government did, the province would barely exist.

    The hue and cry is always to ‘cut spending’, the reason for that is simple, it keeps the argument off the real issue-MORE spending. Everybody wants it, virtually every poll says so, the perennial question of course-is where do you get it.

    That is quite obvious-from those who HAVE it. Again, the richest 1% of New Brunswickers had a tax increase that was LESS than the middle class. And they had a capital gains reduction to offset that.

    A leader of one of the poverty organizations said that New Brunswick has the highest disparity between rich and poor in the country. And of course it is the home of several millionaire and billionaire families. Add to that the fact that New Brunswick corporations fund a mere 3% of the provincial budget (a low of 2% under Bernard Lord) and you really don’t need a weatherman to know which way the wind blows.

    For comparison of the above, in PEI, corporations contribute 10% of the provincial budget, and 12% in Saskatchewan.

    New Brunswick’s social spending is a national embarassment, virtually every social indicator has the province on the low end of the totem pole, and the regulations, as we saw with the residential tenants act, are more aligned with third world country’s than the rest of the country (in fact even third world countries recognize ‘squatters rights’).

    So putting on the poor mouth doesn’t cut it. As said before, simply investing more of the pension fund in NB would provide millions more in funding. Instead they invest it in New York and you’ve seen what thats been like lately.

    The idea is not to get government in YOUR face, but get in the face of the people with all the resources and wealth. Nova Scotia puts more money in R&D than NB, they arent in a different boat.

    But I”m still not convinced there is that many places for them to put money into. When fatkat made a noise, the province and feds ponied up some dough. When the cancer research in Moncton made noise, the province and feds ponied p dough.

    Is there actually that much R&D going on that isn’t getting funded?

  3. mikel says:

    Again, NB spending is a bare minimum, hardly ‘out of control’. It’s actually GOOD that views like NBT’s are marginalized, because if the NB government were to do what the BC government did, the province would barely exist.

    The hue and cry is always to ‘cut spending’, the reason for that is simple, it keeps the argument off the real issue-MORE spending. Everybody wants it, virtually every poll says so, the perennial question of course-is where do you get it.

    That is quite obvious-from those who HAVE it. Again, the richest 1% of New Brunswickers had a tax increase that was LESS than the middle class. And they had a capital gains reduction to offset that.

    A leader of one of the poverty organizations said that New Brunswick has the highest disparity between rich and poor in the country. And of course it is the home of several millionaire and billionaire families. Add to that the fact that New Brunswick corporations fund a mere 3% of the provincial budget (a low of 2% under Bernard Lord) and you really don’t need a weatherman to know which way the wind blows.

    For comparison of the above, in PEI, corporations contribute 10% of the provincial budget, and 12% in Saskatchewan.

    New Brunswick’s social spending is a national embarassment, virtually every social indicator has the province on the low end of the totem pole, and the regulations, as we saw with the residential tenants act, are more aligned with third world country’s than the rest of the country (in fact even third world countries recognize ‘squatters rights’).

    So putting on the poor mouth doesn’t cut it. As said before, simply investing more of the pension fund in NB would provide millions more in funding. Instead they invest it in New York and you’ve seen what thats been like lately.

    The idea is not to get government in YOUR face, but get in the face of the people with all the resources and wealth. Nova Scotia puts more money in R&D than NB, they arent in a different boat.

    But I”m still not convinced there is that many places for them to put money into. When fatkat made a noise, the province and feds ponied up some dough. When the cancer research in Moncton made noise, the province and feds ponied p dough.

    Is there actually that much R&D going on that isn’t getting funded?

  4. Anonymous says:

    The hue and cry is always to ‘cut spending’, the reason for that is simple, it keeps the argument off the real issue-MORE spending. Everybody wants it, virtually every poll says so, the perennial question of course-is where do you get it.

    You get it from dismantling the corporate and banking systems that have been forced upon us.

    Turn off the suicidal global trade which has stripped workers of meaningful employ and offshored both production and profit.

    Focus on local sustainability across the board – not only for your pet PPP – but in all areas of our economy and society.