Michel Samson

Michel Samson, the Minister of Economic and Rural Development and Tourism, announced the creation of the Invest Nova Scotia Board on Wednesday. (CBC)

Nova Scotia's governing Liberals are nixing a controversial business loan program created by the previous New Democratic government in favour of a new program to aid Nova Scotia businesses.

The Liberals introduced legislation on Wednesday creating the Invest Nova Scotia Board and ending the Nova Scotia Jobs Fund, which they say keeps a campaign promise to end corporate handouts.

Michel Samson, the Minister of Economic and Rural Development and Tourism, said the government is cleaning up the way they hand out money to businesses by taking control from cabinet — which controlled the Jobs Fund — to the as-yet-unnamed members of the Invest Nova Scotia Board.

"The board will make their decisions independently," Samson told reporters on Wednesday.

"Rather than cabinet deciding which businesses get financing, a knowledgeable and arms-length board will choose projects based on clear economic development objectives."

Samson said the government's Treasury and Policy Board would still have the power to confirm whether the fund has the
capital available before each project approved by the new board is finalized.

The board's independence would not be compromised by what amounts to a government veto, he added.

Premier Stephen McNeil said the new funding board would not hand out grants, but there is a provision in the legislation for contributions, such as government-owned land.

"There will be no free money, plain and simple," he said.

"This really is a real change from the way we have done business in this province. We're encouraged by the fact the way the private sector has actually been supportive of this and we're looking forward to the implementation of it."

Changes are cosmetic, say opposition

The plan for the board doesn't sit well with the Progressive Conservatives, who accused the Liberals of breaking an election promise.

During the campaign, McNeil promised to end direct taxpayer grants to businesses. He also said cabinet would no longer control who gets government help.

Opposition leader Jamie Baillie said the plan to create Invest Nova Scotia fails on both counts.

"Once again, another Liberal promise is not exactly as it was advertised during the election. What we learned today is we're just exchanging the NDP chequebook for a Liberal one which comes with a fancy co-signer and that's not what Nova Scotians were promised," he said.

Baillie said the arms-length development agency Nova Scotia Business Inc., created by a previous Progressive Conservative government, should be the one-stop shop for business investments.

Samson ruled that out and said Nova Scotia Business Inc. has enough work to do.

With files from The Canadian Press