Wednesday, August 22, 2001
MUN tops list of frequent ACOA clients
By Tracy Barron
If the Atlantic Canada Opportunities Agency (ACOA) offered frequent client points, Memorial University would qualify for a trip for two anywhere the agency serves.
The university is the province’s biggest repeat user of ACOA’s Business Development Program, turning to it 19 times — for a total of $2.7 million in funding for marketing and research — since the program’s inception in 1995.
The top 25 frequent users are all from the non-commercial sector — College of the North Atlantic, a smattering of municipalities and a host of industry organizations.
The City of St. John’s received $1.1 million for seven projects, including widening The Narrows for cruise-ship traffic, building an amphitheatre at Bowring Park and establishing a business development centre for oil- and gas-related inquiries.
The list, however, can be deceiving.
Despite their more frequent returns, only one-third of the $25-million program goes out in the form of non-repayable grants to non-commercial clients.
By far, the majority — 67 per cent — are still loans to businesses.
Commercial repeats few
“(Companies) can only handle so many loans (and) obviously we’re only willing to give them so many, (so) they don’t tend to be repeat users all that much,” said Paul Mills, vice-president of ACOA.
“The typical commercial client would have one or two loans — three would be a lot.”
The repeat users and the nature of the projects aren’t what one might expect.
The funding enables Memorial University to attract researchers and enables faculty to do work with students that they couldn’t do otherwise, said MUN president Axel Meisen.
“It’s a very important part of what we can offer in that respect,” he said.
“It really does provide added benefits to our faculty and students.”
The university has used the money to, among other things, take its expertise to the marketplace, train students and assess what the market is for that knowledge.
“That helps us position our research, helps us position our education and prepare our graduates for more effective careers,” Meisen said.
The $390,914 towards the cost of widening The Narrows enabled the City of St. John’s to tap into the cruise-ship industry sooner than would have been the case had the city had to finance the entire $752,849 bill alone, said Art Cheeseman, the city’s director of engineering and planning.
It’s the type of project that even Brian Lee Crowley, president of the Halifax-based Atlantic Institute of Market Studies (AIMS), supports, although he doesn’t believe in the funding vehicle.
AIMS advocates the dismantling of ACOA and the end of government interference in business.
Role in infrastructure
The federal government does, however, have a role in the building of in-frastructure, which benefits all businesses, and in funding research, Crowley said.
That said, Crowley believes Atlantic Canada should receive support for its universities through Industry Canada and Human Resources Development Canada rather than through a special agency that “ghetto-izes” the region.
“That doesn’t mean there isn’t a role for government, but I think doing it as these special little regional agencies is really an approach that has outlived its usefulness,” he said.
He wants government entirely out of any kind of business assistance, including the funding of industry associations.
Since 1995, the province’s alliance of manufacturers and exporters went to ACOA’s Business Development Program 12 times, getting $350,000 to, among other things, host and attend conferences.
A provincial organization for women entrepreneurs went back six times to get $1.5 million to provide business development support and support services to clients.
“I tend to think that these organizations, if they’re providing a genuine benefit to the community, the community will pay for them,” Crowley said.
Looks for balance
ACOA attempts to strike a balance between building infrastructure and funding businesses, said Mills, who believes the region still has use for a lending agency.
“We still feel there is a need for us to provide those loans in terms of the activity or lack of activity on the part of the chartered banks and those sorts of groups in Atlantic Canada,” he said.
ACOA moved from providing grants to businesses to being a lending agency in 1995.
Since then, the agency has written off $5.8 million in loans in this province under the Business Development Program.
Mills suspects that, over time, less money will be spent in the commercial area as the agency invests more money in other areas, like the new $300-million Atlantic Innovation Fund for research and development.