This is a very instructive story.
I have read seven stories this morning about the new Pixar animation studio in Vancouver. It is positioned as a coup for Canada. Every story has mentioned, in passing, the ‘tax break’ that got Pixar to Vancouver.
Now, here’s the deal – and it goes back to my previous post about ‘grants’ versus other kinds of incentives for economic development.
Listen to me carefully on this. The tax credit program for new media in British Columbia will be worth five to 10 times as much cash to Disney/Pixar than any ‘grant’ ever given by McKenna or Lord (with the exception of the Molson deal).
When there was a national story about a company coming to New Brunswick (and this was reserved for only the biggest of deals), invariably the story was – at least in part – about this province buying in companies with taxpayer money. The culture of defeat. Picking winners. You know the drill.
Of course, the national media (and I don’t particularly blame them) would be biased towards Vancouver. It’s a large and beautiful city. Of course Pixar would want to go there. Why would Pixar ever want to go to New Brunswick? For a big fat government grant. And, typically, they will throw in a quote from AIMS saying that when the grant runs out, the company will leave because there was no real reason for them to be here in the first place.
This outright crap – is a key reason why New Brunswick has stagnated for all these years. No one really believes that Pixar could ever want to be in New Brunswick. But no one ever really tried. If New Brunswick had put the same new media tax incentive program in place. If it had attracted a number of smaller players (which sets the ground for the big guys). If it had developed a world class research centre in animation at UNB. If it was turning out the top graduates in Canada in animation development, etc. etec. etc. then it is likely that Pixar would set up here.
The national media coverage would likely be about the ‘incentives’ to buy Pixar but no matter. The national media has never supported regional economic development in this country. Not in the almost 20 years I have been following it. The Toronto Star is paternalistic about Atl. Canada (they need more EI and Equalization) with the exception of a growing number of its columnists which have adopted a hostile stance in recent years (in response to McGuinty’s fairness doctrine). The Globe & Mail literally ignores the issue and the National Post has at least a story or commentary virtually ever day about the evils of Equalization.
Back to my point for this post. I’d like to see far less ‘grants’ used as incentives and far more use of other tools such as investment tax credits. Don’t sugar coat it. Both are cash. Both are taxpayer money but for some reason when we put the word ‘tax’ in the title – people don’t seem to mind as much. Maybe we liken it to our own tax rebate cheque each year. Who knows?
Sorry, folks. A little venting this morning. Pixar is the kind of anchor that can really help an industry cluster grow. Vancouver has really done a good job of attracting film and new media. There is really no interest in growing this sector in New Brunswick -at any level.
And that’s fine, I guess. But I’d like to see some sectors where we are trying to seriously compete (other than call centres). And, we need to get out front, on a few emerging industry growth sectors. Green energy? We are the last to the party so I think the opportunity is limited (not zero but limited).
And by the way, as to that “as soon as the grant runs out the company will leave” myth, ExxonMobil is still here and has expanded several times. UPS is still here. In fact, most of the big named international firms that were attracted to New Brunswick in the 1990s are still here and many have expanded.
You won’t read that on the pages of the Globe & Mail.