Min­is­ter Bains’ lack­lus­ter clus­ters


Last week, fed­eral In­no­va­tion Min­is­ter Navdeep Bains an­nounced new de­tails about the fed­eral govern­ment’s plan to grow Canada’s econ­omy: hand out nearly a bil­lion dol­lars in tax­payer money to a few busi­nesses who are will­ing to ask for it.

To the min­is­ter’s credit, he had the good sense not to ex­press it in such can­did terms. In the rich tra­di­tion of rhetor­i­cal poli-bab­ble, he chose far more ex­cit­ing phrases such as “jump­start­ing in­no­va­tion” “mean­ing­ful eco­nomic ac­tiv­ity” and “su­per­clus­ters”.

But try as he might to ap­ply lip­stick to this pig, it’s still the same old swine un­der­neath.

Gov­ern­ments hand­ing out tax­payer money to favoured busi­nesses is the old­est trick in the in­dus­trial-strat­egy play­book.

The min­is­ter him­self ad­mit­ted as much when pressed, sug­gest­ing his govern­ment was sim­ply copying the ap­proaches of other gov­ern­ments around the world.

Ap­par­ently the min­is­ter didn’t look hard enough. From biotech­nol­ogy in Italy to a pur­pose-built Rus­sian tech park, to bil­lions wasted from Ger­many to Singapore, the num­ber of failed at­tempts by gov­ern­ments to cre­ate in­dus­try clus­ters is long – and ex­pen­sive.

No mat­ter how hard they try, gov­ern­ments are not very good at pre­dict­ing the next big eco­nomic trend.

But maybe Canada can learn from their mis­takes?

Don’t bet on it: the Trudeau govern­ment hasn’t even learned from the mis­takes of pre­vi­ous fed­eral gov­ern­ments in Canada, which spent at least $12 bil­lion over the last half-cen­tury on cor­po­rate wel­fare with zero ev­i­dence of job cre­ation. Mean­while, the In­sti­tute of Fis­cal Stud­ies and Democ­racy at the Univer­sity of Ot­tawa es­ti­mates the fed­eral govern­ment al­ready has 147 dif­fer­ent pro­grams and tax mea­sures aimed at in­no­va­tion and skills de­vel­op­ment.

Con­sider too that the cur­rent govern­ment has made such du­bi­ous “in­vest­ments” as hand­ing over $372 mil­lion to Bom­bardier (af­ter the com­pany laid off 2,000 Cana­dian work­ers), as well as a $100 mil­lion tax­payer gift to highly-prof­itable Ford (which then an­nounced it would be re­duc­ing up to 600 jobs).

Which part of this long, repet­i­tive track record of failed govern­ment in­ter­ven­tions should give us any con­fi­dence they’ll get things right this time?

In a sad co­in­ci­dence, on the same day Bains un­veiled his new bil­lion-dol­lar hand­out ini­tia­tive, Proc­tor & Gam­ble an­nounced it would close its plant pro­duc­ing clean­ing prod­ucts in Brockville, On­tario by 2021, throw­ing 480 peo­ple out of work.

Af­ter show­er­ing Bom­bardier and Ford with tax­payer money, it’s fair to ask why Proc­tor & Gam­ble didn’t get a sim­i­lar hand­out. And it’s hard to con­clude that the an­swer has any­thing to do with eco­nom­ics, and ev­ery­thing to do with pres­tige. In the eyes of politi­cians, planes and cars mean so­phis­ti­cated tech­nol­ogy. But mops and fab­ric soft­ener sheets? Sorry guys, we can’t help you. The hand­outs are for the sexy in­dus­tries only.

This is the in­evitable con­se­quence of a failed ap­proach to eco­nomic de­vel­op­ment that has gov­ern­ments pick­ing win­ners and losers, in­stead of en­sur­ing a busi­ness-friendly en­vi­ron­ment for all. Rather than let the mar­ket de­ter­mine whether Bom­bardier, Ford or Proc­tor & Gam­ble should suc­ceed or fail, the govern­ment ends up de­cid­ing. The re­sult is that busi­nesses that don’t tick enough boxes on an ar­bi­trary check­list pay the price.

Min­is­ter Bains may have the best of in­ten­tions with his su­per­clus­ter in­no­va­tion plan. But if his­tory is any guide, the clus­ter it will cre­ate will be far from the “su­per” kind he has in mind. Ed­i­tor:

With the “wind down” of The Saskatchewan Trans­porta­tion Com­pany the govern­ment is show­ing to­tal dis­re­gard for the wel­fare and safety of the most vul­ner­a­ble cit­i­zens in our prov­ince.

Did The Hon­ourable Joe Har­grave, Min­is­ter of Crown In­vest­ments Cor­po­ra­tion (CIC), Saskatchewan Govern­ment In­sur­ance (SGI), Saskatchewan Trans­porta­tion Com­pany (STC), do any cost com­par­isons for STC, Grey­hound, Puro­la­tor, Fedex, and other com­pa­nies which trans­port peo­ple and/or freight?

Did The Hon­ourable Joe Har­grave do any re­search into the dis­as­trous costs to the Man­i­toba govern­ment when they shut down a sim­i­lar bus­ing sys­tem?

“Ex­pect­ing” pri­vate car­ri­ers to take over the STC routes only means the loss of an ex­tremely high-qual­ity trans­porta­tion sys­tem which the ma­jor­ity of Saskatchewan vot­ers have al­ways sup­ported.

We do not need to have limou­sine pas­sen­ger ve­hi­cles

on mat­ters of pub­lic in­ter­est for pub­li­ca­tion over the writer’s name. All let­ters must be ac­com­pa­nied by the au­thor’s name, ad­dress and tele­phone num­ber so that they can be ver­i­fied. Let­ters are sub­ject to edit­ing and lim­ited to 300 words. Copy­right in let­ters and other ma­te­ri­als sub­mit­ted to the Pub­lisher and ac­cepted for pub­li­ca­tion re­mains with the au­thor, but the Pub­lisher and its li­censees may freely re­pro­duce them in print, The Booster, its Pub­lisher or Pub­lish­ers and Al­berta News­pa­per Group, LP do not nec­es­sar­ily en­dorse the views ex­pressed therein. driven by peo­ple with un­known driv­ing ex­pe­ri­ence driv­ing on poorly main­tained, dis­in­te­grat­ing high­ways dur­ing ex­treme win­ter weather con­di­tions in Saskatchewan.

Did any­one in the Saskatchewan govern­ment con­sider the con­se­quences of this dis­as­trous de­ci­sion? Could it be that some­one in a bud­get cau­cus meet­ing just waved their hand in the air and shouted “Let’s use this deficit as an ex­cuse to get rid of STC!!”?

The peo­ple who des­per­ately need STC trans­porta­tion are truly be­ing “thrown un­der the bus”!

Diane Ca­wood - North Bat­tle­ford

CFIB pe­ti­tion op­poses Car­bon Tax in Sask.

The Cana­dian Fed­er­a­tion of In­de­pen­dent Busi­ness (CFIB) has col­lected more than 1,000 pe­ti­tions from small busi­ness own­ers across Saskatchewan op­posed to the in­tro­duc­tion of a na­tional car­bon tax.

CFIB’S pe­ti­tion en­ti­tled: Tim­ing couldn’t be worse for in­tro­duc­tion of a car­bon tax, thanks the pro­vin­cial govern­ment for stand­ing up for Saskatchewan by op­pos­ing a na­tional car­bon tax. CFIB mem­bers also ask the pro­vin­cial govern­ment to con­tinue lob­by­ing the fed­eral govern­ment to re­con­sider its plan to im­pose a na­tional car­bon tax in Saskatchewan and rec­og­nize the prov­ince’s cur­rent ac­tions to re­duce car­bon emis­sions (e.g. use of car­bon cap­ture tech­nol­ogy, agri­cul­tural lands are sig­nif­i­cant car­bon sinks).

“With a tech­ni­cal pa­per ex­pected soon out­lin­ing Ot­tawa’s pro­posal, the pro­vin­cial govern­ment needs to know that en­trepreneurs share its se­ri­ous con­cerns with a na­tional car­bon tax,” noted Mar­i­lyn Braun-pol­lon, CFIB Vice-pres­i­dent, Prairie & Agribusi­ness. “In fact, 76 per cent of Saskatchewan busi­ness own­ers are op­posed to the in­tro­duc­tion of a car­bon tax, com­pared to just eight per cent who sup­port it.”


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