Warning: Rant Ahead

I am wound up this morning and it is before my first cup of coffee.  There is just so much content to blather on about.

Take this BDC annoucement.  Its venture capital division has been ranked among the world’s top 100 venture capital funds.

Problem is in its entire portfolio there are only four NB companies and three of them are NBTel offshoots (a large company that fostered an internal entrepreneurial spirit that spilled out after the deconstruction of the company).  There is only one NB company not in the IT area that has received VC from the BDC.

You know my position on this.  Attracting investment into our growing firms is every bit as important as attracting greenfield investments (companies setting up operations here).    We are not doing a good job of attracting companies and we are not doing a good job of attracting investment into our companies.

New Brunswick has the least number of publicly traded companies of all the provinces (or maybe second lowest?).  All of the big VC firms in Canada have almost no investments in New Brunswick.

We aren’t attracting investment.  Period.  Outside of a few large projects (like the potash expansion) and government projects (like highways and bridges) we are not attracting investment. 

And that is what is holding up economic development.

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7 Responses to Warning: Rant Ahead

  1. mikel says:

    And actually, I’d call the potash industry a ‘DIS investment’. If you recall, Sask Potash recieved not a tax break but a ‘royalty break’ on potash which almost gives it away in exchange for jobs. Potash is used for glass, soap and most importantly as a soil fertilizer. For years (forever?) canadian potash has helped american and south american agriculture to strip forests to plant crops.
    About the only other investment in NB goes to highways, as well as to occasional Irving investments like the wallboard factory (which got $50 million but is rarely mentioned in rants about ‘corporate welfare’).
    But again, I don’t know how we’d find out, but I wonder if an email would work-if it could be discovered what those 60% of projects that ACOA rejected, then we’d know exactly in what way the region is getting shafted. It could be that the projects were too small, maybe just VERY bad investments, or it could be that there is some sort of systematic discrimination against certain types of projects. As science doesn’t exactly get high priority in the province though, I don’t suspect they were R&D projects (but we just don’t know).

  2. Ron Gaudet says:

    Right again David – I think your rants tend to be bang on – Stay off the coffee it works!

  3. Well, the cranberry operation and the wind power generators are both examples of investment from out-of-province, so it’s not true that we are not attractive investment.

    The constantly expanding retail forest in Moncton is another instance of the province attracting investment.

    So. There’s investment and there’s investment. External money coming in to fund NB enterprises or startups? Not so much.

    Why would they?

    – existing local businesses (eg. the Irvings) receive preferential treatment from government
    – the workforce is not well educated, and there is constant lobbying by local business (eg. the Irvings) to keep taxes, and hence education expenditures, low. immigration efforts are directed at bringing people back ‘home’ instead of attracting talent and quality
    – transportation options are poor; bus and rail, even in cities, are almost non-existent, air travel is limited and expensive, and road travel or trucking are all owned by local business (eg. the Irvings) and hence expensive to companies from ‘away’.
    – no opportunities exist in natural resource development; virtually the entire province has been leased to local business (eg. the Irvings) for proprietary low-grade processing

    In summary: the major disincentive to new business in New Brunswick is existing business and the existing business climate.

  4. Jon Doe says:

    The retail forest in Moncton serves to employ your teenage daughter at minimum wage for a summer before she ships off to University; it doesn’t form the backbone of a strong economy.

    Quebec has landed a number of game design companies by offering tax breaks and we should be exploring similar options. The opportunity to land Google is potentially one of the most significant IT opportunities that Atlantic Canada has ever had, and we should be willing to throw in the kitchen sink just to get them here.

    Landing Google as our flagship in knowledge based/IT industries would only snowball and put us on the map as a fertile breeding ground for other similar companies.

  5. mikel says:

    Yeah, we aren’t talking about just ‘investment’ but ‘development’. A large proportion of apartments and housing is also owned by albertans, germans, etc., they have been the loudest voices that keep us from getting a residential tenants act which grants basic housing rights to boarding house tenants.

    The mills and leases were all ‘investments’ and some provided lots of jobs, but that’s not ‘development’, thats stasis. Economic ‘development’ requires progression, not just investment or change.

  6. Samonymous says:

    I’ll take eke out. 😉

    Conference Board of Canada: “In the near term, New Brunswick is expected to lead the country in growth this year, but the bar is low. Driven by government infrastructure spending and a provincial tax cut, the province should be able to eke out 0.9 per cent growth this year.”

  7. Cod Father says:

    @Samonymous

    Looks like that self-sufficiency agenda is working after all! Who would have known? I thought is was a tad timid myself.

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