FREDERICTON – New Brunswick’s New Democrats are calling for an end to provincial programs that provide loans or grants to businesses after the release of government records showing Business New Brunswick’s failure rate over the past six years.
A government list obtained through freedom-of-information legislation shows that 23 per cent of the agency’s loans and grants from January 2005 until last fall went to companies that declared bankruptcy or closed.
NDP Leader Dominic Cardy says the record is poor and the province should shift to providing tax credits to businesses that create jobs.
Of the $653 million invested or loaned by the province’s Liberal and Conservative governments over that time period, $151 million went to firms that closed down.
Cardy says while provincial New Democrats were among the political parties that supported direct support to businesses in the past, he now believes governments can’t choose winners and losers in the private sector.
“We thought having government invest directly in the economy was the way to help jump-start areas of the country or province that were depressed,” he said. “We tried it and it failed.”
Economic Development Minister Paul Robichaud has said the provincial government is concerned by that rate of failure and is going to do a better job of vetting investments in the future.
He also said the province continues to attempt to recover money lost by Business New Brunswick, adding that there are some companies that have restarted under new ownership since their bankruptcy.
Roger Melanson, the Liberal critic for economic development, said his party continues to favour using loans and subsidies to support businesses.
- Canadian man dies during Texas Ironman event. His widow wants answers as to why
- ‘Shock and disbelief’ after Manitoba school trustee’s Indigenous comments
- Several baby products have been recalled by Health Canada. Here’s the list
- ‘Sciatica was gone’: hospital performs robot-assisted spinal surgery in Canadian first
The party was in power for the majority of the investments given in the six-year period.
He said he believes the 77 per cent success rate is “pretty good.”
“This was done while we had a major economic downturn around the world,” he said.
Dropping subsidies to business won’t work because the province needs to use the same investment incentives as other jurisdictions in the country, he added.
“You need to stay competitive to bring investment and grow the economy,” he said.
– By Michael Tutton in Halifax.
Comments