The province’s auditor general says Business New Brunswick should set measurable targets and make public whether the department is getting value for money from its largest fund for industry.
The Financial Assistance to Industry Program – owed hundreds of millions of dollars by New Brunswick companies – has been assessed, according to the department.
But the results of a review by the government’s internal auditing and accounting office won’t be released.
The comptroller’s office looked at the success of all financial assistance programs over the last nine years but that’s “for internal purposes only,” Business New Brunswick spokeswoman Marie-Josée Groulx said Wednesday.
Kim MacPherson, the auditor general, said in her 2010 annual report to members of the legislative public accounts committee Tuesday that Business New Brunswick should spell out the actual number of jobs created through the various repayable loans, loan guarantees, forgivable loans and equity investments that the department makes for the benefit of New Brunswick companies through the financial assistance program.
Money lent or invested under the program represented about 84 per cent of the total $445.5 million in funding outstanding to Business New Brunswick in 2007, which MacPherson examined along with previous years.
Other targets could include measuring the number of jobs created that still exist years after the delivery of financial assistance; the cost of each job created; the return achieved; and a cost-return comparison on those jobs, the auditor stated.
The department could also do an overall cost-benefit analysis to assess whether the fund’s costs can be justified, she stated.
“We believe that the measurable annual target should be focused on actual jobs and returns, not just committed jobs and estimated returns,” MacPherson wrote in her report.
The department’s response – at the bottom of the report – was that it couldn’t report on actual job creation within the year because positions are usually added in subsequent years after financial aid is given.
Business New Brunswick said it wasn’t looking at long-term targets because the Office of the Comptroller was doing a review of nine years’ worth of financial assistance programs.
Groulx said that review is complete, since the department responded to the auditor general a couple of months ago, before the release of her report.
“We are adjusting our policies,” Groulx said, but wouldn’t elaborate on the review.
“Will it be looked at, at Invest NB? Definitely,” Groulx said. Invest NB is the new economic development agency the Tory government created recently but it has yet to provide details on the agency.
Business New Brunswick Minister Paul Robichaud was not available for comment Wednesday.
But he did respond to a Telegraph-Journal question a day earlier about whether his department should be more forthcoming regarding how many jobs are actually created through the fund.
“There’s no doubt,” Robichaud said. “I do remember the former government was announcing the creation of hundreds of thousands of jobs when they were not materialized.”
“This is the kind of example that we should not do and this is the kind of situation we do not need,” he said.
“The last thing New Brunswickers need is false information and false hope regarding economic development.
“My staff, as we speak, are already working and looking at the recommendations of the auditor general.”
Charles Cirtwill, president and CEO of the Atlantic Institute for Market Studies, said the auditor general’s recommendations don’t prevent Business New Brunswick from making bad funding decisions.
“You’re still going to have all sorts of spectacular failures. By the time we get around to measuring it, it’s too late,” Cirtwill said, citing the roughly $70 million in total funding provided to Miramichi’s now-defunct Atcon Group.
He suggests not funding companies at all, or providing payroll rebates once jobs are created.