Subsidy to TD for Saint John jobs grows 80% since 2007
Critics say paying for jobs becomes a hard cycle for governments to break
The standard practice of the provincial government paying for job creation by private sector companies is getting more expensive.
On Tuesday, the province announced it will pay $2-million to TD insurance to add 275 jobs in its Saint John call centre.
"So that will be up to $2 million and again, 275 jobs associated with it … which is phenomenal value for the people of New Brunswick," said Premier David Alward at Tuesday's news conference.
"This is a wonderful way to invest with the company in our people here," he said.
It was the third time TD has been given money by the province of New Brunswick to expand its Saint John centre, even though the company is one of the most profitable companies in the country. In August, TD bank announced its earnings for the three-month period ending July 31, 2013 were $1.6 billion.
The money given to TD bank this week is more than the bank used to receive for bringing jobs to New Brunswick.
In 2007, TD added 100 jobs in Saint John and the province paid $4,000 jobs to get them. In 2008, TD added 200 jobs and the provincial government boosted its grant by 40 per cent, to $5,600 per job. This week's $2 million grant works out to a per-job subsidy of $7,270, which is 80 per cent more than TD received six years ago.
While Alward says the new jobs are worth the expense, critics like Marco Navarro-Genie of the Atlantic Institute of Market Studies say paying for jobs becomes a hard cycle to break.
"If somebody is going to give them money — which is essentially what it is — to set up in Place B instead of Place A, of course they will … and then they will continue to seek those kind of subsidies," he said.
While TD has received bigger subsidies with each expansion, they're still a bargain compared to what some others have been getting.
In August, Alward announced that BBM Testlabs was getting $13,700 per job for 27 positions in Moncton. In July 2012, the province agreed to pay almost $58,000 per job to FFG to support 26 manufacturing jobs in Bathurst.