Was it Chicago that used to sing “you’re a hard habit to break”?
We have a new political party in New Brunswick and their economic development policies sound (and act) just like the other two parties.
The People’s Alliance of New Brunswick economic development ideas are:
-Privatize the liquor corp.
-Turn BNB into an organization more focused on small business exports
-Give more tax breaks to small business owners/investors
-Cut tax rates for new business start ups
When you read the narrative, they cite the CFIB so I guess we don’t have to go far to see the influence.
Another wall to beat my head against.
There is nothing wrong with public policy to try and support small business but there has been an army of bureaucrats supported by dozens of programs to support small business over the past 25 years (BNB, CBDC, ACOA, SEED, young entrepreneur, female entrepreneur, on and on) and what has that got us? 25 years ago New Brunswick’s population was rising, now it’s stagnant. Northern New Brunswick was stagnant, now it is in fairly steep decline.
We have more microbusinesses in our economy than most other provinces and fewer large businesses (over 300 employees).
Despite talk from government for decades, 95% of all our exports are from a few large firms – oil, forestry, minerals and fish. Throw in McCain’s and that is almost all exports from the province.
A new party should have new ideas. Quite frankly, they could have gone far left – at least that would be original. All of these ideas have been tried. Bernard Lord cut small business taxes to the bone and both the PCs and the Libs gave tax breaks for investing in small biz.
As for BNB, 95% of its effort is focused on small businesses under 100 employees. I don’t have the exact figures but I am almost sure this is the ratio. The big firms only come to BNB looking for grants/loans. All of the services – trade assistance, etc. are targeting the relatively small guys. So the PANB is going to push that ratio to 98%?
As for reducing the amount of grants to industry, I don’t have a problem with this but a) it will end up being harder than they think. Many of the small businesses they salivate over are the ones knocking on the door looking for grants, loans, loan guarantees, etc. A tax break won’t help much if the bank demands a loan guarantee; and b) if they are moving off the grant model, what are they replacing it with? Tax breaks. If you add up all the businesses in New Brunswick and divide it into the total corporate income tax revenue the NB government collects every year you get about $4,000 in corporate income taxes paid per business in the province.
So why is the PANB anchoring its economic development policy on cutting that $4,000 down to $3,000? How many jobs will be created in the average firm by cutting $1,000 out of the average corporate tax bill?
New ideas, folks, won’t come from reading CFIB circulars.