Invariably, when a call centre closes or cuts its staff I get an email or two decrying the McKenna call centre effort with the usual “big companies come here exploit our people, take our tax dollars (incentives) and then leave”.
If you read my earliest writings on this years ago you will find I said total employment in this sector would peak and then start to level off and slowly decline as a result of customer interaction moving online. In 1999 when Marriott set up in Freddy how many hotel rooms were booked online?
However, this certainly doesn’t invalidate the call centre initiative.
CBC reports that Marriott employed 265 in Freddy. The company started smaller but added 95 in 2001. Assuming the majority of those were full time and at the industry average wage that means somewhere between $50 and $70 million in direct payroll between 1999 and 2012 and if you roll that up to operating costs and put a very conservative multiplier on it you are looking at around $150 million worth of economic activity for the Freddy area during that time period.
Not a bad return on investment for whatever the government put in (usually a few thousand per worker – one time). I can’t give you an exact amount of public investment because the Lord government was known for being particularly vague about the public investment in these projects. The press release from 2001 doesn’t mention government incentives. There may have been n0ne – but I suspect there were.
Every year in New Brunswick, hundreds of businesses shut their doors or go bankrupt – from mom and pops to large firms.
In general, the government should do nothing to try and stop this. Businesses close because of business conditions and trying to prop them up makes no sense.
There is an exception, of course. The CBC report states that the “Marriott also has call centres in Saskatoon, Sask. and Sarnia, Ont., as well as several centres in the United States.” This is an important statement. The question for economic developers (and his Worship) needs to be why close Fredericton and not Saskatoon or Sarnia. The U.S. equation is more complicated.
The broader point is that we need to be marching on. What are the new growth sectors? Where is the investment coming from? What is the most intelligent role for government to play?