A bad example

I was in the economic development system when the province lured those two textile mills to Northern New Brunswick.

$76 million provincial money into those projects and they are essentially dead. 

Funny how these things go.  For $150 million, there is a real possibility we could have attracted an auto plant or at least a massive supplier like Michelin up there but in those days the idea of spending $150 million in taxpayer funds to attract 1,000-1,500 high paying jobs was laughable.  I worked on a project that was to be 1,100 high paying jobs and over $600 million in capital investment – NB was on the short list – and the total NB ‘package’ was $25 million.

Now we give AV Nackawic $70 million to keep a couple hundred jobs (no growth) and $76 million to a couple of relatively low paying textile mills just to keep them afloat.

I think the province really needs to come up with an economic anchors strategy.  A deliberable program to attract a few large, multinational, stable firms to key regions in New Brunswick.  These desperate attempts to bail out firms with bad business models – is no substitute for real economic development.

I think an economic anchors strategy doesn’t even have to be about massive transfers of taxpayer monies.  It could involve tax breaks, free land, tailored workforce recruitment/training efforts, maybe an incentive power rate, – we have many models to look at in the U.S and other Canadian provinces.

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5 Responses to A bad example

  1. mikel says:

    New Brunswick doesn’t need an economic anchor ‘strategy’. We can debate economic anchors, but even if we accept that, there isn’t a ‘strategy’ necessary-the province simply needs the ‘anchors’. Of course Irving is an ‘anchor’ and we saw how well that played out. The ‘anchor’ ends up buying all the businesses in the economic supply chain, which kills competition and offers the vertically integrated company access to cheaper materials and energy.

    But even so, can you honestly say that the government is sitting around a table saying “Ok, we don’t want GROWTH companies, we just want to shovel money into a company that will give folks on EI enough weeks”.

    The difference is of course location. Because those are areas in the north, they don’t get the ‘energy infrastructure’ money, they don’t even get the Molsons. And Molson’s if I recall, had some serious government money going into it as well.

    Those COULD attract other companies, but in case you haven’t noticed, auto plants aren’t the ‘sure bet’ they once were. Bricklyn was an ‘auto plant’, and now auto plants in southern ontario are on the brink. Which of course means auto companies are no looking at what provinces can actually afford to bail them out, not just give concessions.

    But I’ll admit, that just means ‘which anchors’. So I’ll mention the pet theme, animation. Imagine how far 150 million would go in enticing young people out of school NOT to leave. It would pretty much pay for that television station, an ‘anchor’ if I ever heard of one (so I guess I AM agreeeing with the anchor strategy-just the quesiton of which anchor). There would actually be a use for all those journalism graduates of STU, as well as an outlet for those few animation houses.

    But again, it comes back to what we know. Despite the protests here, the government DOES have an anchor strategy-in fact TWO. The energy sector in St. John, and the Atlantica ‘anchor’. Even the feds have gotten on board the Atlantica bandwagon. So the problem is not an anchor strategy, but what is here (no doubt) called a BAD economic anchor strategy. We also know WHY those are the main anchors-AIMS pushed Atlantica, and Crowley now works with the PM. And Graham’s father works in Atomic Energy of Canada. So again, how do you provide alternatives to a government that’s already made up its mind?

  2. Just for the record, I like your idea of the provincial television station – if it is a content generator – it could be a good anchor to develop animation but also specialized reportage that could have markets beyond the province. I have pitched this in several contexts but there isn’t much appetite.

  3. richard says:

    ” So the problem is not an anchor strategy, but what is here (no doubt) called a BAD economic anchor strategy.”

    Once again, these are not really anchor economic strategies. They are construction projects, designed to provide short-term employment and generate a rosy picture for the next election, nothing more. There is no sign of any long-term strategy at all; no plan to use energy as a lever for anything. Mainly just pointless infrastructure spending. Its just the textile thing writ large. Not anchors, just one-offs.

    There was an NBTel post a few days ago. NB had a pre-internet communications star but threw it away. Seems to me that could have been an anchor for IT and perhaps animation. Now it’s gone.

    I think the best bet for an anchor now is something rooted in the community. IMO that means natural resources, but nothing will happen there w/o a massive increase in R&D. All signs suggest NB is too short-sighted to do that.

  4. mikel says:

    First, again, we know Richard’s view and my own. There is of course a plan to use energy as a leverage-an energy ‘hub’ is designed for that purpose. Start off with nuclear and gas, then wind. The province announced funding awhile ago for tidal generational studies. Provide the ‘hub’ and other operators want to locate there. Virtually ANY new industry can be said to be ‘short sighted’.

    The problem here is not the province, but the economy (and in some ways the people). The province simply doesn’t have the funds and there is no place to put the R&D that is known of. Again, can anybody source an industry that is out there crying for money but being ignored? They do exist, but not in the research sector.

    For television, I point at government but in today’s climate its virtually impossible for a government to do what Bill Davis did and start up a TVO. A group has to get together and push for it. Take a look at virtually EVERY government legislative priority, it has NEVER come about because government sits back and says “what would be a great idea to push for the people of the province”. Governments respond to political actors, again, thats why blogs are essentially marginalized-they aren’t part of the political picture.

    I highly doubt it, but its possible the government would LOVE a group of people to come together and push for a television station or some other ‘anchor’. But they aren’t going to imagine it themselves and take the political risk that comes with taking chances. The government’s view, and it has a point to a degree, is that if ENOUGH people aren’t interested in it, then its irrelevant, and certainly not worth trying to make political hay. This is a province where Mr. Burke was ordered to stop blogging when he had the gall to complain that his municipal taxes were so high. That’s NOT a sign of a government looking outwards. Don’t you think its a coincidence that this blog has been running almost as long as Charles Leblanc’s and yet in all that time I don’t think a SINGLE MLA has EVER posted even so much as a comment here. Yet they used to comment at Charles’ blog, and some offshoots of his blog-so long as they weren’t much about economic policy.

  5. richard says:

    “Provide the ‘hub’ and other operators want to locate there.”

    There is no evidence that this is the plan. If anything, the ‘plan’ is to export power (and the high-paying jobs that go with it). Again, this is NOT an anchor strategy, it’s just a collection of construction job projects. Your reference to an energy hub to attract industry is David’s concept; no real evidence that it is GNB’s strategy. If that were the case, there would be significant signs of planning to take advantage of energy generation to lure new energy-using industry (e.g data centres, etc) here. A press release is not an anchor strategy.

    “The province simply doesn’t have the funds….”

    That’s because the ‘funds’ are spent on other things (like textile mills); most large projects require fed participation. NB lobbies and gets highway dollars, but does not lobby very hard for R&D spending or university research dollars. The feds are opening the money bag; is GNB lobbying for funds to revamp and double the research lab space at U de M and UNB, or are they asking for more highways? The former and the latter both produce construction jobs aplenty but only the former has a chance of creating business opportunities that will lead to high-paying jobs.

    “Governments respond to political actors..”

    That’s true enough. But that’s just an excuse, not a reason. We expect leadership from those we elect. Sometimes they provide it, most times they do not. NB needs someone with vision and guts. Since LJR is dead, perhaps we can make Obama an offer.

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