This is creepy.  I understand the political need for the Opposition to hammer the government but to attack the ROC contract and say:

To add insult to injury, it was revealed last week that the government hired another Liberal-friendly consulting group (based in Fredericton) to “think outside the box” and try to find ways to help the north. Instead, the government should have directly invested those dollars in empowering our northern communities and offering rewards and incentives for innovative entrepreneurs.

This is fundamentally what I dislike when politics intersects with economic development.  MLA Madeleine Dubé made these comments in her column today.  Regardless about how you feel about this whole ROC controversy you can’t deny that it involved brining in four economic development experts with decades of collective experience.  You can’t deny that they went out and talked to a pile of global firms about the potential of locating operations in northern New Brunswick.

And M. Dube wants to offer “rewards and incentives for innovative entrepreneurs”.

There are two salient points here:

1. It is clear that the Conservative critic for BNB is still stuck in that old mindset that we will be able to reinvigorate the northern NB economy by giving out as much money as we can to local entrepreneurs.  Despite the fact that has been tried for decades and hasn’t worked.  You cannot replace a pulp mill and its 600 high paying jobs with doling out grants to a few local small firms.  We must find large anchor economic development projects.

2. The second point is even more important.  We must de-politicize economic development.  This is absolutely critical.  Frank McKenna, like him or hate him, spent a pile of time trying to convince global firms to locate in New Brunswick and he was having some success.  Premier Lord came in calling for a “made in NB solution” to economic development and totally reversed McKenna’s efforts.  He then ended up with more new call centre jobs than McKenna but those were as the result of an initiative that was in place far before him. So, instead of sitting down with his economic development officials and giving them a simple mandate “find me the next call centre industry or two or three”, he went back to the tired old model of trying to squeeze business investment out of a dried up lemon.

Any company in the north with a good business plan, global markets and great talent as well as their own money should be supported. That’s a given.  But it has not been and is not enough.

Ireland figured out that it needed to attract significantly more global investment and increase trade in order to achieve economic development in a 1957 white paper appropriately entitled “economic development”.   Government changed hands multiple times but both sides agreed on the broad principles of economic development and the path didn’t vary for 30-40 years.

New Brunswick bounces around every 8-10 years or so. 

We have got to get agreement on the fundamental of economic development – outside politics – and when governments change hands we continue on the same broad path to economic development.

There are many things that governments can argue about  but the basic tenets of economic development should not be one of them.

We must de-politicize economic development or we will never get anywhere in this province.

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15 Responses to

  1. Anonymous says:

    Cold and Snow is all we know about the findings of this contract!So they talk,talk,like mckenna,talk,talked.
    For one thing,why is all the money being poured into this area?
    It looks like they be years spending it.

    http://miramichileader.canadaeast.com/news/article/526184

    Your business would no doubt expand,if you forget about the mckenna big smoke.Follow his advice and you do a harm to your clients.
    Such as this present government rides solely on the good operation of one person ,Mr. Lamrock.
    These last pronouncements are Embarrassing.Similar to Mcguinty in Ontario.Clueless

  2. Anonymous says:

    The NB PCs are acting like the NDP; criticize everything and present no ideas of your own, knowing you can get away with it because you will never form a government.

    Where is the intelligent debate and critical anaylsis? Whinning about salaries and contract awards is high school level sensationalism. NB deserves better.

  3. mikel says:

    That’s not actually ‘creepy’, whether you like the policy or not. And like the policy or not, you have to keep in mind the flip side, which is that money is thrown at foreign corporations ‘for decades’ and THAT hasn’t helped. Change that, BOTH ideas have ‘helped’ in some ways and hurt in another.

    Keep in mind that if Lord ‘changed’ McKenna’s focus then we’re talking about policies, which means its illogical to state that for some reason Lord got more Call Centre jobs than McKenna.

    In the news is that Atlantic Yarns has declared bankruptcy and thats 80 million down the drain-80 million that could go a long way in ‘investment’. Combine that with a blog that talks about increasing troubles at Nackawic. So BOTH the ‘buy at home’ AND the ‘increase FDI’ is kind of on the ropes, so maybe there should be ANOTHER option.

    By the way, Bernard Lord did almost as much business travel as McKenna, it was just mostly in the US.

  4. I read/viewed/listened to somewhere between 20 and 30 stories and commentaries (print, radio and TV) on the ROC contract. There were a wide variety of issues from the tendering to the alleged political connections to the quality of the work, etc. Mme. Dube was the only story or commentary that said the money should have been given to local entrepreneurs. And she is the shadow Minister for BNB. Mikel and I will go to the grave disagreeing because I fundamentally believe that economic development in New Brunswick must involve a wide variety of capital sources far and wide. If the future minister of BNB can’t see the value in attracting business investment, we have a problem.

  5. mikel says:

    I’ve NEVER said to restrict capital sources (that would be crazy). They do at least have to make economic sense. If RIM were to set up shop in NB then I’d be ecstatic, in fact personally I think a company that has received as much government help (not just in grants or tax concessions but government contracts) should be FORCED to set up facilities in all provinces-particularly ‘have not’ provinces that need to beef up their educational sector.

    My argument is exemplified by that RIM example. Not only did Nova Scotia have the ‘salesmanship’, but more importantly the province had the educational infrastructure that impressed RIM. So BY investing in ‘home grown’, you attract the foreign investors-the GOOD ones.

    At the CBC page there was a poster who made the argument that Atlantic Yarns is the perfect example of why the government should NOT invest in enterprises run ‘from away’. Dube is a politician, NOT an economist, so maybe you missed this guy’s commentary. She is arguing what New Brunswickers think (just different New Brunswickers than yourself).

    This is heard all the time, its the conservative mantra of ‘less government’. Stop investing in bureaucracy, and invest in people. A recent parrallel came from Mayor Woodside, where in an interview he brags about how Fredericton is the only city in NB to hire a bureaucrat to facilitate between poverty organizations. Yet supporters of the emergency shelter are irate that not one penny is given in grants to that facility. So again, government often invests in ‘bureaucracy’, which is why the conservative movement of ‘less government’ always holds such ground. There is often good sense in such bureaucracy, but even when there is, that isn’t ‘shown’ to the population.

    My point is simply that its not ‘creepy’, it just represents a different ideological view than yours. Even if I disagree with you, which isn’t often, I don’t call it ‘creepy’, its simply a different view. Why SHOULDN”T money go to entrepreneurs rather than consultants? Even in cases where consultants do good work it often gathers dust if it isn’t politically expedient.

  6. Rob says:

    “We must de-politicize economic development or we will never get anywhere in this province.”

    I think thats a very tough nut to crack. If we’re not fighting about North v South, we’re fighting between Fredericton-Moncton-Saint John.

  7. richard says:

    “but more importantly the province had the educational infrastructure that impressed RIM..”

    I think it would be more accurate to say that NS has a uni or two that has focused on research. NB does not. Its R&D investments that attract outfits like RIM. If you want RIM or its competitors, invest in R&D. If you want to chase RIM out of Canada, force them to invest in NB whether they want to or not.

    “Yet supporters of the emergency shelter are irate..”

    They are irate because the city gave money to arts organizations and animal shelters but refused to fund the emergency shelter. That’s because the Freddy Beach chattering class wants its entertainment, prefers dogs to people, and feels that the poor should either quietly huddle on the banks of the river behind Government House or move to Bhutan, where ‘vacationing’ UNB staff will be happy to empower them.

    “a very tough nut to crack..”

    True enough; you will see the same in-fighting between Cambridge ON and Woodstock ON. But the pie is larger there.

  8. mikel says:

    Most universities in NS focus on R&D more than NB. No doubt its not just the number of universities, however, here in Waterloo you can see the effect of Jim Lazaridis’ interest in things other than what you’d consider R&D. The latest is to be a ‘foreign affairs think tank’ that will be funded for several years at least and do what the American council on foreign relations does. The Perimeter Institute does ‘R&D’ but none of it is aimed at anything commercial. And Jim is pretty happy and established in Waterloo and says he has no interest in relocating. I don’t say put a gun to his head, I say that when companies expect somethign from governments, governments should get certain rights in return. If they don’t want it, that’s their business, but I know lots of people who work at RIM and they aren’t any smarter than people I know in New Brunswick.

    The second point of Richard’s is additionally true, but my point was simply about paying bureaucrats instead of organizations that actually ‘do’ something. Finally, there is really relatively little infighting between cities in ontario. When Toyota was setting up outside Cambridge, there was no complaints.

  9. Anonymous says:

    So the government sends in these high paid friends of the politician into an area to tell the people what they should do,after spending years telling the same people they weren’t qualified or capable or big enough to be bothered with.
    Imagine what it now would be like if the 3 million acres of forest controlled by one man was ,instead, supporting 1000 small business’s.
    That could ,presumed mean the 10 billion dollars in one family’s offshore pocket would ,instead be in tens of thousands of NBer’s local pockets!

  10. mikel says:

    Thanks, anon, thats usually what I’m trying to say in long drawn out ways. I’ll remind readers that in forestry the ‘community model’ has been pushed by the town of McAdam and ignored by the province. Meanwhile its the fastest growing sector of forestry in Ontario and British Columbia. And to hammer the above point home, in “Forbidden Forest”, JD Irving says EXACTLY that, that communities simply ‘aren’t qualified’ to understand forestry.

  11. richard says:

    “Finally, there is really relatively little infighting between cities in ontario.”

    Mikel, I lived for 15 yrs in London, so I know that’s not true, especially now. As the pie shrinks, the infighting in ON will dwarf anything NB has seen. Watch TO.

  12. Anonymous says:

    Well mikel,I knew some darn good woods operators.Dedicated 60,80 hour work weeks, high self esteem ,proud wife and kids,community supporters,forced into working for Irving by blocking their ability to sell their wood wherever the price was best,GONE,bankrupted,now running lumber operations out west and being begged to stay ,while NB worries about ways to get more transfer money to the Irving(letmecountheways),and which quebec outfit they can get, to buy with grants, NB company’s, and to do NB jobs.
    Yes just took a guy to the airport this morning,who rushed home Christmas,leaving his Alberta bought $40,000 truck in Regina airport,so he could bring it home to load up because his contractor partner wants him to start as soon as possible,because of the number of Alberta contracts he has got to get done this coming year.It appears quebec has got most NB work all sewed up which the boys are now happy with,because,far more money and well run contracts by the Alberta Government.You see,even the government Engineer inspectors are contracted out,making for a far fairer situation when disputes arise,instead of the,you do it my way ,of the graduate first year engineer.

  13. Anonymous says:

    James Foster
    City Views
    Heaven help those who are charged with invigorating the economy of northern New Brunswick.

    They are darned if they do and darned if they don’t, a good example being the two failed yarn manufacturers that tanked last week, flushing $80 million tax dollars down the toilet.

    Business New Brunswick Minister Greg Byrne says we’ll have to wait and see how much of that money we’ll get back, but the minister is being more than a tad, uhhhh, optimistic; in fact taxpayers as unsecured creditors will never see a dollar’s return on their investment.

    The point is not to pick on poor Byrne. Frankly, he can have that job. The issue is how did anyone conclude that two mills which require subsidies at a rate of almost a quarter-million dollars per job ($80,000,000 divided by 360 jobs) could lead to anything but heartache for everyone; well, everyone except perhaps for the owners who, one might suspect, aren’t rushing to the mailbox to file their EI claims before they run out of Kraft dinner.

    I’m not one of those who believes governments never should stick their noses into the business sector, but surely there’s a happy medium, a balance, that can be struck.

    One is left to ponder how many small start-ups could see the light of day with $80 million, how many PET scans wouldn’t have to stay in storage for four years, as the Dumont hospital’s was, and still is, for lack of a room to put the thing in, or how many senior citizens’ and poor folks’ electricity or heating-oil bills could be subsidized with $80 million.

    I’d wager, a few.

  14. I like Jim Foster’s writing – mostly. Criticism of the approach to the two textile mills is very warranted. I have been highly critical. But then he has to roll into the same old tired mantra “how many small start-ups could see the light of day with $80 million” or “how many PET scans”.

    One, 90% of the economic development resources of all levels of government is geared towards funding small start ups and the result is a) the second lowest rate of new business creation in North America (according to a recent Fraser study) and b) population decline. The textile mills are yakked about constantly. Why? Because how many other $80 million examples are there? Small businesses don’t grow from government grants. They grow out of strong and successful economies that necessitate a whole variety of new niche starts ups to serve that strong and successful economy.

    Two, only Newfoundland spends more on health care per capita than New Brunswick. Guys like Foster always default to the health care noodle to whip governments. We are overspending on health care by any objective measurement. We must figure out how to have a more effective health care system and not just throw more money at it. I will also add my own tired mantra that it takes economic development to get the funds to pay for health care (not to mention the people). Thousands are moving out of northern New Brunswick every year. You think plowing more money into health care will bring them back?

  15. mikel says:

    First, you can look at the print media online for southern ontario and there’s hardly a whisper from each city about the others. In Waterloo there is essentially three cities squashed together. When the school of architecture created a new building in cambridge not a complaint was made. In Londons Free Press there has been no complaints at all about initiatives here in Waterloo Region, and since Toyota is now setting up right next to London, there hasn’t been a word of complaint from Cambridge-where their operations are. If there are some examples…

    One thing people haven’t really talked about with the Yarn ‘fiasco’ is exactly WHO was involved. When government subsidies flow, they often flow to unexpected places-often to generous donations to political parties. Yet none of this is even mentioned in the media, sort of like how the caissie populaire ‘scandal’ got hushed up before it got to the investigative stage. NB is seriously secretive, and the media helps out with that, I’m not saying that something ‘fishy’ was going on, just that there is no way of knowing.

    For the point above, its true that it doesn’t necessarily mean that government subsidies are bad, but we should also remember that its not true that ‘small businesses don’t grow from government grants’. EVERY small business is unique, and virtually EVERY scientific research company relies on grants at their initial stages.

    But still, nobody talks about Molsons or UPS, so the examples of ‘successes’ could far outstrip the failures. But there is a point, it probably takes FAR more subsidy to locate and industry in northern or rural NB than elsewhere, and its probably riskier.

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