Scrap NSBI for more co-operative enterprises?

On many occasions, I think the Canadian Centre for Policy Alternatives adds a lot of value to the debate in Canada but their recent proposal to scrap NSBI and put the money into expanding “co-operative enterprises across the province” is not particularly bright.

There is a certain level of irony when a think tank located in the urban centre with by far the largest inflow of money to fuel the local economy advocates to scrap the only agency in Nova Scotia meant to attract inflows of money into that province.

The Ottawa economy lives on inward flows of cash.  Billions of dollars from the rest of Canada is sent there to be spent in the local economy on the federal government and the vast amount of related spending.

But Nova Scotia, we are told, should focus on small co-operative enterprises in the local economies around Nova Scotia.  Because recycling the few dollars there should give us the growth boost we need (?).

It certainly is possible that co-operative enterprises in certain industries could become exporters and bring in money to rebuild weak local economies in Nova Scotia but I wouldn’t hold my breath.

I like co-operatives and have argued they can and should play a role in the regional economy.  There are industries that are suited to this form of business and I think a cohort of folks who like this kind of business structure.

But it is folly to think that Nova Scotia should avoid the General Dynamics, Lockheed Martins, Airbus’, Michelins, etc. in favour of co-operative enterprises.

I know the CCPA has a problem with concentrated corporate power and doesn’t like big business.  But they should at least understand how economies work at a basic level.  We need lots of new investment and new income flows into Nova Scotia if the economy is to revive – not a focus on recirculating the money that is already there.  If the government isn’t going to flow in the money (like Ottawa), we will need the private sector to do so.

And NSBI is the agency right now meant to do that.

Giddy up.

 

 

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3 Responses to Scrap NSBI for more co-operative enterprises?

  1. mikel says:

    “The Jobs Fund has often been criticized as a slush fund guided by the political motivations of cabinet rather than sound economic policy.
    Last November, the province’s auditor general said he found examples of unsecured loans and loans that were approved but did not always include the required financial and economic analysis.”

    NOT doing that seems pretty reasonable, especially given that the ruling party stated during their election campaign that handouts to corporations would stop. So this isn’t exactly coming from left field.

    And the CCPA in Nova Scotia is just that, you sneakily make it sound like Ottawa researchers are stating this, when this report was done by 50 professional nova scotians.

    And according to the CP, the NSBI only procured 6000 jobs, and there is no evidence that ‘without’ them they would not have been secured anyway. Established corporations don’t deal with flunkies at organizations, they deal with Premiers and PM’s.

    And come on, Irving is not ‘from away’, and McCains is not from away, so virtually ALL the evidence in New Brunswick proves that its not the case that you need ‘foreign investors’ to build an economy. New Brunswick is the poster child for evidence of the reverse!

    And finally, cooperatives are a good idea, the main problem with any business starting out is difficulty finding people. You have to borrow far more that operationally necessary just to pay labour costs, which can then drag down any company. A co op also accomplishes networking for suppliers as well as customers. Its a pretty interesting idea, especially if you are a history buff, you might want to read some on the Antigonish Movement to see just what economic benefits have arisen in the past from cooperatives-its not insignificant.

    PS: Mr. Savoie was raving about what a success story it was for the NSBI to finally get Blackberry to set up a presence in Nova Scotia. I wonder if he still feels that way.

  2. This seems a bit misrepresentative: ” their recent proposal to scrap NSBI and put the money into expanding “co-operative enterprises across the province” is not particularly bright.”

    In fact only about half the money saved by scrapping NBSI would be put into the cooperatives. The rest of the money is just saved.

    The other thing that seems unclear in the post is whether NBSI is actually attracting the business that would make it worth spending the $27 million. The amount of business it would take to replace that amount of money spent (especially given the usual tax breaks and incentives) would be substantial.

  3. Michael Edwards says:

    David, The Ottawa economy is not as dependent on federal transfers as we are. So your view that we should dismiss opinion based on its source, doesn’t really stand up. In any event wouldn’t it be better to attack the argument itself?
    Cooperatives are a legitimate way of getting to critical mass in marginal economies overlooked by corporations with high thresholds of interest. We have, for too long, used public money as incentive to attract outside players, with mixed results.
    In NB we have another problem, investment pools driven by too few decision makers. They only make investments in areas they know best. Understandable, but problematic if you are looking for diversification. Cooperatives can be an alternative model to fill in the gaps. Of course to some co-ops might look like a socialist plot, so we shouldn’t expect the Right to rush forward and embrace them…

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