In a story about the Bas-Caraquet shipyard bailout in New Brunswick, the Telegraph-Journal quotes AIMS Vice-President of Research John Williamson, who argues that this “smacks of a risky government bailout.” Read the full story at the Telegraph-Journal website.
By John Chilibeck, Legislature Bureau
The Liberals’ decision to bail out the foundering small-boat shipyard on the Acadian Peninsula is raising questions over government’s role when it comes to economic development.
On one side are critics who say the Bas-Caraquet project, years in the making, should be able to stand on its own without putting taxpayers’ money at further risk.
On the other are supporters who say in tough times, government plays a crucial role in shoring up the economy.
Blaine Higgs is firmly in the opposition camp. The Progressive Conservative MLA and former finance minister says the Liberal government’s pledge to inject $10 million into the project, possibly more if Ottawa gets involved, is wrong-headed.
He said the demand for new and refurbished fishing boats is high in the region because the province’s $1-billion seafood industry is flourishing while the fleet is aging.
Some orders will take until 2020 to fill.
“If the market’s that strong and it isn’t that difficult to get orders to build a fishing boat, why aren’t there private sector investors?” says the Tory leadership candidate. “The reason they often hold back is government jumps in without any further study. In New Brunswick, we don’t evaluate market conditions, we don’t take a serious look at where you can get private money, we’re just too quick to jump in and provide money. And investors and banks stand back and just wait for government.”
To the vice-president of research at the Atlantic Institute of Market Studies, it smacks of a risky government bailout.
“This looks like an industry bailout dressed up as infrastructure by the provincial government,” said John Williamson in an email. “The New Brunswick Naval Centre couldn’t secure its financing to proceed with the project when government was already bankrolling at least 60 per cent of the cost. There is no business plan to create sustainable economic activity, as it appears all the dollars being spent will come from government. This is not plan for success, it is another risky use of tax dollars.”