New Brunswick

Budget will show where PCs really stand on using subsidies to lure businesses

Next week’s provincial budget will provide the clearest indication yet of whether Premier Blaine Higgs is serious about shifting away from traditional job-creation subsidies to attract new businesses.

Premier Blaine Higgs's throne speech indicated shift to helping small and medium-size businesses more

New Brunswick Premier Blaine Higgs campaigned on attracting business to the province without government subsidies. (Hadeel Ibrahim/CBC)

Next week's provincial budget will provide the clearest indication yet of whether Premier Blaine Higgs is serious about shifting away from traditional job-creation subsidies to attract new businesses.

The Progressive Conservative government's first full budget is its chance to make good on a promise to instead cut taxes and reduce red tape to help existing companies grow.

Among other things, the Tory budget will set out how much funding will go to Opportunities New Brunswick for subsidy programs.

We take our cue from the premier and we want to do our best to make sure we continue to help these companies grow.- Stephen Lund, CEO of Opportunities New Brunswick

ONB's CEO Stephen Lund says his agency, which generated controversy when it refused to reveal how many jobs were created at individual companies receiving rebates, will move in whatever direction the government sets.

"We are going to continue to work with small businesses," he said in an interview. "Whether we put a bit of extra emphasis on that — if that's required, sure, we'll do that.

"We take our cue from the premier and we want to do our best to make sure we continue to help these companies grow."

Stephen Lund, CEO of Opportunities NB, said the agency will move in any direction the government sets. (CBC New Brunswick)

Mary Wilson, minister of economic development and small business, wasn't available for an interview.

But she said earlier this year that the government will launch an all-party review of ONB's mandate while looking at other ways to "energize" the private sector.

Attracting business without subsidies

Successive Liberal and PC governments have used taxpayer dollars, from grants to loans to payroll rebates, to persuade companies from outside New Brunswick to create jobs in the province.

But in last year's election campaign, Higgs's PC platform said New Brunswick "must become a place that attracts private business investment without government subsidies."

The People's Alliance, which is supporting the PC minority government in the legislature, called for the end of "corporate handouts" in its platform and for a shift to tax reductions and other measures to help businesses.

People's Alliance Leader Kris Austin also campaigned on ending the subsidies, which he called 'corporate handouts.' (CBC)

The PC throne speech last November said that "success doesn't come from luring one big employer with subsidies, it comes from seeing hundreds of small and medium businesses growing bigger."

Lund said about 75 per cent of ONB's work is already devoted to helping existing small- and medium-sized businesses, with only 25 per cent going toward the more high-profile recruitment of outside companies.

He also said recruiting outside firms to set up shop here will always be important, even if it's less of a priority for the new government.

"We know where their emphasis is," he said. "But I think everyone recognizes that we continue to need new investments and we continue to need to help our companies export.

"It's not one or the other. Will we shift our emphasis here and there? Maybe, perhaps. We'll take our cue from the government. But at the end of the day, you need all of those areas chugging to grow the economy."

Partnership with UNB

ONB is helping fund a new program, Scale Up Atlantic Canada, officially launched this week at the University of New Brunswick's technology management and entrepreneurship program. ONB said it represented "an increased focus" on helping small businesses grow.

The six-month boot camp for 15 existing small businesses aims to help them grow by 25 per cent, which program director Dhirendra Shukla said would translate into about $1 million in revenue growth.

That creates jobs and broadens the tax base in a way that spurs other business growth, he said.

Economic Development and Small Business Minister Mary Wilson has previously said the government will launch an all-party review of Opportunities New Brunswick’s mandate. (CBC)

Although the program was in the works before the PCs took power, it dovetails with their promise to do more to help existing small businesses grow.

"I hope this is a natural fit," Shukla said. "I hope this aligns very well with something they believe in."

But Shukla also said there'll still be a place for attracting larger outside companies to the province.

"To build a strong ecosystem you need lots of exciting startups, lots of companies growing at an amazing pace, and you need those large companies there too."

Small business hopes

Meanwhile, the province's small businesses are hoping the budget will include the elimination of the small-business tax and the reduction of red tape, both of them PC campaign promises.

"We're hopeful we're going to see action on that," said Louis-Philippe Gauthier, the New Brunswick director of the Canadian Federation of Independent Business.

He added the government has already made one major change to help small business: a change to WorkSafeNB legislation to rein in major increases to premiums paid by employers.

Gauthier said there'll always be a need for ONB to recruit outside firms, but its programs are "not necessarily well-suited" to smaller businesses in the province.

Louis-Philippe Gauthier, the New Brunswick director of the Canadian Federation of Independent Business, hopes to see a reduction in the provincial small-business tax. (CBC)

He said programs from the Department of Post-secondary Education, Training and Labour, including funding summer jobs and helping Employment Insurance recipients transition back into the workforce, seem to work better.

"When we hear from our members, these are programs that are seen favourably," he said.

Gauthier also hopes to see the Tories head off a Liberal bill that would end an exemption for heavy equipment in property tax assessments.

The bill, aimed at large industry, has the backing of the Green Party and the People's Alliance, meaning it would have enough support to pass, though Alliance Leader Kris Austin says he wants to make sure it does not hurt small businesses.

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