STEPHENSON | Business as usual: Big companies, big public investment
Nova Scotia’s South Shore communities were riding an emotional elevator last week after a bust in pulp and paper and a boom in aquaculture.
Up in Sydney, with less dramatic fanfare, there was big talk about a return of the steel industry.
The job numbers, in all three cases, are said to be in the hundreds: Hundreds of jobs lost with the closing of the Bowater Mersey plant in Brooklyn, outside Liverpool. Hundreds promised at three sites where Cooke Aquaculture will expand its Nova Scotia operations.
And hundreds in industrial Cape Breton, should the possibility of an iron ore pellet plant come to fruition.
The other link among the three news items is that all three have received, or would require, an investment by taxpayers. When job numbers get to be in the hundreds — whether in losses or gains — it seems public funding is always part of the scenario.
There are two years left before the $400-million remediation of the Sydney tar ponds will be complete. The site is now home to Harbourside Commercial Park, where Severstal North America is looking at building a pelletization plant.
John Whalley, economic development manager with Cape Breton Regional Municipality, told The Chronicle Herald last week there could be as many as 700 new jobs if the plant were to proceed. That would bring a massive positive impact for industrial Cape Breton, where the decline of the coal and steel industries has left a gutted shell in the local economy over the past few decades.
Millions of dollars have been spent in an effort to stimulate new opportunities in the region, including the recent $38-million harbour dredging project. That work has already provided a return in the form of a $75-million commitment from Provincial Energy Ventures Ltd., which is upgrading its facilities at the Sydney port.
But bringing other long-term investment, in the form of new employers and new jobs that stick, has been elusive.
The province tried to step into this void earlier this spring by pitching a plan that would supposedly move 100 civil service jobs to rural communities as part of a decentralization plan. In New Waterford, 23 positions from the Justice Department’s maintenance enforcement program were to be moved into a shuttered call centre.
But the good-news story took a sour turn when it was revealed last week that 22 of 23 workers had refused a transfer to New Waterford. Four took severance packages while 18 said they did not wish to move. And as it turned out, while some of the jobs were to be relocated from Dartmouth, others were to be shifted from New Glasgow, Kentville and Amherst.
The Justice Department plans to plow ahead and is advertising the positions to be filled with new workers in New Waterford.
After that good-news bubble drifted off course, the news about the Severstal project brought another dose of optimism. The company is also considering a Quebec site for the plant, and there are plenty of hurdles ahead, but this is exactly the sort of project that could lure home at least some expatriate Cape Breton workers.
Naturally, taxpayers are expected to provide significant impetus to a siting decision. Whalley says Severstal has inquired about a break on property taxes and is in discussions with Nova Scotia Business Inc. and Enterprise Cape Breton Corp. Here we go again: big companies, big public investments.
With a double-digit unemployment rate, Cape Breton at least has a workforce available to support such an operation. But Cape Bretoners have held their breath so many times through the past few decades, as various economic life-preservers were discussed, they could be forgiven for remaining skeptical. They know all about emotional elevators.
So we’ll go with skeptical, but still hopeful all the same.
Perpetual Whiners
Submitted by Bill Kelley on June 26, 2012 - 7:35am.
The Sydney/Idustrial CB'ers have never recovered from the glory days of Saint John Buchanan and his endless flow of taxpayers dollars flowing into 2 dead and dying businesses. They have perfected the art of whining so that any Premier is immediately cowed into throwing more money at this out of the way, union loving dead little town/city.
With Halifaxs container terminals on life support, they convince the government to dredge Sydney harbour and this then opens the possibility of another container terminal. No mention of Milford just down the road being built without taxpayers money. In order to get anything resembling a container terminal up and running, they will need CN onboard, so far nothing being said by CN, they recognise a dead duck when they see it.
The pellet plant will never open, any savvy business recognises the threat of union intervention, and Sydneys glorious days of strikes followed by wage demands peppered with more strikes. Close Sydneys pipe dreams down by cutting off any and all demands for tax dollars to keep this place afloat.
@bILL kELLEY
Submitted by mact on June 26, 2012 - 12:07pm.
If the two industries that you are referring to are Sydney Steel and DEVCO, only Sydney Steel was a provincial crown corporation. DEVCO was a federal crown corp. And by the way, more than 50% of that money never reached the causeway. It changed hands either in Halifax or Ottawa. Patronage very seldom makes it to the grass roots level.
..and
Submitted by henry gondorf on June 26, 2012 - 8:55am.
and I hope that Bill Kelley comment doesn't come from Halifax ...the biggest public trough of a city outside of Ottawa in Canada...bar none.
@henry
Submitted by mact on June 26, 2012 - 12:01pm.
agree
The best indicator of future failure is past failure.
Submitted by hav2b on June 26, 2012 - 8:49am.
What's the opposite of "Midas touch"? Oh yeah, Dexter touch.
The trouble with the job numbers is that the hundreds of jobs lost are already a confirmed reality or, at least, a certainty in the near future, while the promise of new jobs is, at best, a promise being perpetuated by a freespending government with a poor track record of telling the truth.
Gagging over here.....
Submitted by Tank on June 26, 2012 - 9:15am.
It makes me gag at the amount of money we throw at big business, it's insane. If we had all the money back we have spent in Cape Breton alone on failed enterprises, we could give every man woman and child each a million dollars and still be in the red. Hell, everyone in Nova Scotia could get a cheque like that and be told that’s it, you are on your own, no more help.
In the black, surely.
Submitted by hav2b on June 26, 2012 - 10:46am.
If being "in the red" is our goal, we need do do nothing different. We can let Dexter toss our tax dollars out the window as usual.
"Investment"
Submitted by High Tide on June 26, 2012 - 10:52am.
The government of Nova Scotia should invest in companies that have options to get money elsewhere. Then their investments would be met with returns, not losses.
When all else fails
Submitted by No problem here... on June 26, 2012 - 5:43pm.
Scary thought, employing all of those highly paid, highly pensioned public servants, and politicians to do what anyone could do with signing authority of the provinces bank accounts. No brains, no experience needed, just the ability to scribble your name on a cheque, don't worry about the amount, the bureaucrats will fill that in, they are experts at squandering and making excuses. they use the spaghetti test, just throw it on the wall if it sticks it is done, if not just keep throwing until it does. Problem is it is not spaghetti they are throwing it is your's and mine tax money, money that they demand, money that unless you are a crook, you have no chance of not passing over.
They would be fools
Submitted by Here on June 26, 2012 - 11:49am.
I don't think government are fools for trying to get business started. I think they are fools each time they stand up and spout "This investment will preserve-create-maintain X jobs in this area of our province." Voters are fools if we buy the line, no matter which party is subsidizing which industry.
Companies would be fools not to take the best incentive. The congratulations when they accept your bribe should be tempered with the practical knowledge that the same smiling CEO will sell the assets and move at the next good offer.
Surprisingly these problem areas are not representative of NS business or the workforce which are both productive and adaptable. However politically we are consumed by the dying communities, as if we can maintain 1870 in some parts of the province forever. It doesn't work that way, never did, never will. Once the reason for a community passes so does the community.
Is it really an 'investment'
Submitted by PF on June 26, 2012 - 11:53am.
I think the word 'investment' is mis-used in the article title.
Throughing money at failed businesses in not my idea of an investment.
If people in government knew how to run a successful business they wouldnt be in the public sector, the public sector attracts people with the least ability to work in the private sector.
Asking the public sector to pick private sector winners is a very poor decision.
I say again
Submitted by No problem here... on June 26, 2012 - 1:34pm.
Hence the spaghetti test, all you need is a good throwing arm.
"Asking the public sector to
Submitted by CoyoteII on June 26, 2012 - 2:33pm.
"Asking the public sector to pick private sector winners is a very poor decision."
Especially when they are led by NDP union hacks with no business experience other than extorting money from the private sector and taxpayers.
Job numbers
Submitted by johnpercy on June 26, 2012 - 12:06pm.
One should always pay attention to the wording of these wonderful announcements of job numbers. They are always predicated with "up to...", "as many as...", "potential of...", "anticipated...".
This translates as, "We really don't know how many jobs this will create, but this is a good sounding number."
Good Strategies Are Hard To Come By
Submitted by daveburris on June 26, 2012 - 1:10pm.
To attract jobs and investment we need spending cuts, lowering taxes, getting out of the green energy con game, scrapping gas price regulation, scrapping the moratoriums, forget about the NIMBYs, and adopt a more general business-friendly jobs-friendly approach to governing.
If our tax and investment climate was competitive, we still might require some funding for incentives, you can't get away from it, every body does it, but the amounts could be significantly less.
So Severstal is also considering a Quebec site, that just about cuts out NS, with the difference in power rates, well, unless of course, huge gobs of tax money goes into it.
As far as the forests are concerned, in 2010 we had the "Resources Strategy" implemented, which the Woodbridge Report condemned, saying they saw "fibre costs in Nova Scotia increasing by...47% within the next 10 years. Wood costs could rise...30% over the next 10 years". Now the forest industry has become uncompetitive and is going down the tube. Not all of the problem is foreign competition.
In Aug. 2011 Natural Resources Minister Charlie Parker had a strategy in which he trumpeted "Sustainability, transparency, diversity, collaboration and informed decision-making...," OOOPS, what about jobs? employment? growing the economy? nothing about that. Right, we lost 3,100 jobs in the past two months and now the Bowater closure. Not doing too well.
A little realism is needed in this province.