Nova Scotia gives BlackBerry $10 million over five years to keep jobs
HALIFAX – Tech giant BlackBerry (TSX:BB) will get $10 million over five years if it keeps at least 400 jobs in Nova Scotia, Premier Darrell Dexter announced Thursday.
Dexter said that without the investment, the company could have moved the work elsewhere, draining high-paying jobs from the province.
“If we wanted to have them here in Nova Scotia, then the simple fact of the matter is that we are competing with every other jurisdiction and location that they have,” Dexter told a news conference Thursday.
He said he approached BlackBerry last summer after it announced plans to cut its global workforce by 5,000 as it struggled to deal with a shrinking market share and delays in deploying its new platform, Blackberry 10.
At the time, the company – then known as Research in Motion – laid off about 95 people from its operations in the Halifax suburb of Bedford.
“They were going through … a core review,” Dexter said, referring to the company’s painful restructuring. “I didn’t want these people working in Waterloo, Ont. I wanted them working here in Nova Scotia.”
A company official later confirmed that more than 400 currently work at the facility in Bedford, though she declined to give a specific number.
In return for the infusion of public cash, the Ontario-based company has committed to spend $4 million annually on a so-called BlackBerry 10 Centre of Excellence. The province says the centre will support the new platform by offering training and research.
Andrew MacLeod, BlackBerry’s managing director for Canada, suggested the future of the Halifax facility was in doubt last year.
“Everyone understands that we had to make some very difficult decisions. … We’re up against some of the giants,” he said. “All options were on the table, not just for this facility but for every facility around the world.”
Both opposition parties remained silent on the issue Thursday, though they have taken many opportunities in the past to criticize the NDP government for what they say is its penchant for handing out “corporate welfare” to well-heeled companies.
The funding announcement came two days after the launch of the new BlackBerry Z10 smartphone in Canada. BlackBerry has said it is smashing its own sales records with the launch, but it has declined to release sales data.
“We want to be part of that for the future,” Dexter said at his announcement inside a new cafe in Hammonds Plains, a growing suburban area where he said many BlackBerry employees now live.
“This is about ensuring that the people who work in this facility who are part of our economy continue to be able to live and work and put down roots here.”
A successful rollout of the new devices is considered crucial for the company, which has lost market share to Apple’s iPhone and Samsung’s Galaxy S3.
The company was lured to Nova Scotia in November 2005 by millions of dollars in payroll rebates and grants. At the time, the province offered $19 million in subsidies, including $14 million in payroll rebates and $5 million for training and recruitment.
The company was told it had to create 1,200 jobs over five years to get the full rebate.
By mid-2011, the company had created about 540 jobs, which means it took in at least $8 million in rebates.