Low global demand for products fuelled by a worldwide economic downturn has forced management at the AV Nackawic mill to consider shutting the doors. It looks like this shutdown might be temporary but it is still an impact.
Some folks, including those that post here, pull a nah, nah, nah and say “see I told you FDI doesn’t work” but I respectfully disagree. I know that Oracle dropped 20 people after buying Whitehill and I know that other foreign companies have set up here and closed.
But dozens have not closed. There is an 80% failure rate among new business start ups in New Brunswick – I guarantee the failure rate among FDI investments here is far less – only they tend to be larger and make a splash.
Also, I have said far and wide that FDI is not the only solution. We do need to stimulate local entrepreneurship with an export orientation. We don’t want to become the branch plant for Toronto. But a little branch plant would be nice. GM closed its distribution facility in Moncton so did Chrysler. In fact, I would argue that Toronto-based affiliates of international companies are investing even less in the hinterland like New Brunswick (with the exception of call centres). So we will have to go far and wide to attract business investment.
I read today in the TJ that the feds are going to make $6.5 billion in infrastructure spending to prop up the economy during this downturn. This is an interesting FDRish way to handle downturns. It is doubly fun because it is ‘capital’ spending and not ‘operational’ spending so will have no significant effect on the budget deficit.
I just don’t understand why we can’t use this money to invest in economic development infrastructure. Why we always play the pothole card. I just don’t understand it. Please ‘splain it to me.
If NB is going to get its ‘share’ of that $6.5 billion that’s about $150 million. How about a $150 million environmental technologies development strategy? Matched by a provincial $150 that would mean $300 million over the next five years to start down the road of becoming an ET hub. We could set up research chairs at the universities, attract leading companies here and incubate new ideas as well.
Or we can fill up some more potholes to make the drive out of New Brunswick more comfortable.