The issue of subsidies – of any form – to industry continues to be a controversial activity (except for agriculture where the majority of Canadians seem to be highly supportive).
In fact, I am even opposed to subsidization of bad business models and companies with limited growth potential just to postpone the problem another few years.
I am even opposed to the general idea of corporate subsidies – if every jursidiction played by the same rules.
However, they don’t.
And more often than not, New Brunswick gets the shaft because we ‘can’t compete’ on corporate incentives. This posture has been repeated by government officials since the days of McKenna and I suspect long before.
A new report out by Counterpoint Market Intelligence out of the UK suggests that lucrative incentive programs have been critical to the development of aerospace clusters around the world including the US, Canada and in Europe. In fact, about Canada, this article states:
Canada also comes in for comment as “one of the success stories for state funding of aerospace”, having claimed fourth place in the global line-up with a “particularly generous research and development regime in terms of the tax credit and the breadth of eligible costs”.
I have seen similar research praising government for investing billions into the auto sector in Ontario.
Problem is, what sector are we investing in a ‘particularly generous’ way in New Brunswick?
Employment insurance, if you can call that a sector.
Public services (40% of all new jobs created since 1999) – but I don’t think that creating public sector jobs is an overly practical long term economic development strategy.
Any other sectors? Anyone?