N.S. cabinet outspending agency in business aid

Premier Rodney MacDonald's cabinet has promised business incentives and loans totalling nearly three times the amount offered since last April by NSBI, Nova Scotia's business development agency.

Nova Scotia Business Inc., created nearly a decade ago to keep business incentives at arm's-length of government, has committed $13 million to various companies.

Over this same period, cabinet has promised around $37 million, including $12 million alone to maintain ferry service to Yarmouth.

Economic and Rural Development Murray Scott said he expects cabinet to tap into its Industrial Expansion Fund again in the coming months. 

Scott, who's also the minister responsible for NSBI, said many businesses that may need help have been around for decades and have created hundreds of jobs in the province.

"In the financial situation in the world, for them, the only lender they may be able to find is the government," he told CBC News.

Scott sees nothing wrong with the fact cabinet is spending more  than NSBI to help business.

Outpaced by cabinet

The agency was created in 2001 by the government of John Hamm. The idea was to take decisions about economic development out of the hands of politicians.

NSBI would handle the money, though government would set the rules for doling it out.

In four of the past five years, cabinet has given out as much or more than NSBI. Last year, it was almost double.

That worries Nova Scotia Liberal Leader Stephen McNeil.

"We should be moving away from that kind of old-style politics and moving toward more of what the intent of NSBI was," McNeil said.

New Democrat MLA Graham Steele agrees.

"When the Conservatives came in under John Hamm, they realized that there was a problem with the way economic development was being funded [and] they made a change," Steele said.

"It's clear that the current government is drifting back to the way things used to be. Certainly, that's a problem because most of the money is now being spent based on the judgment of political people, not business people."

System defended

Jim McNiven, a former senior bureaucrat, believes cabinet should have a pot of money at its disposal to help companies with proposals that don't fit into existing government programs.

McNiven was a deputy minister responsible for development during John Buchanan's government. He's also a former dean of management at Dalhousie University.

"Do you say, 'Sorry, we don't have a category for that,' and even if we need it and it might bring in 100 jobs and we'll have to let it go because we don't have a category? Is that really what you want?" McNiven said.

McNiven points to the days when the Buchanan government was trying to lure aircraft-engine builder Pratt and Whitney. Cabinet came up with the money for a highway overpass near the Halifax airport to make it happen.

Like McNiven, Pat Ryan, NSBI's chief operating officer, sees how a cabinet-controlled fund can be useful.

Ryan said he doesn't feel the government is undermining NSBI's work. In fact, he added, there are times when NSBI steers people to the Industrial Expansion Fund when it can't help them.

Scott denied suggestions that the cabinet factors in political gain before coming to the aid of a business.

"If we don't support them, who is going to?" Scott said, adding a business case is "always" required before doing so.