Development: Sawmill co-owner says north would be better served than by province’s strategy
BATHURST – A northern New Brunswick business owner is pushing for increased tax-based incentives, which he argues are the best way to revive the region’s economy.
The Graham government’s three-year plan for northern New Brunswick was widely praised by municipal and business leaders when it was released earlier this year, but Norbert Maltais, one of the owners of Chaleur Sawmills, believes the north would be better served if the province focused more on tax credits than investing in new projects.
“We’re all excited about the creation of jobs,” Maltais said in an interview.
“But what we’re saying is that the best way to do it, a guaranteed way to do it, would be to increase the tax credit on investments from 10 per cent to 30 per cent.”
Maltais said his company, one of the Chaleur region’s largest employers, was able to make major investments when a 30-per-cent tax credit was offered to corporations back in 1988.
“That’s when we bought most of our machinery and really got into the business,” he said.
“Now we have more than 350 jobs in 2010, thanks in part to those investments.”
Donald Arseneault, the minister responsible for the northern plan, said the government is still considering introducing a tax-free zone at three northern ports and is open to other tax-related incentives.
Arseneault said New Brunswick already has favourable tax rates, but that northern New Brunswick may need an extra boost to encourage economic growth.
“We’re always open for new ideas as well,” he said.
“We’re currently looking at the whole taxation issue.”
He said the specifics of the tax-free zone for the ports in Dalhousie, Belledune and Bas-Caraquet, such as whether they would apply to property or corporate tax, are still being debated.
Still, Arseneault defended the infrastructure investments, such as the expansion underway at the Port of Belledune, which he said will give local companies new opportunities and attract outside investment.
The northern plan centres on the three ports and their target sectors: Dalhousie for forestry-related products; Belledune for metal-related industries and modular fabrication; and Bas-Caraquet for shipbuilding.
It relies on existing funding, such as the Northern New Brunswick Infrastructure Initiative and the Northern Economic Development Fund. Each is getting $15 million in 2010-2011.
Barbara Pike, vice-president at the Halifax-based Atlantic Institute for Market Studies, said such a plan will help the north, but only to a point.
“The plan that the government has announced has got some very interesting initiatives, but you can’t keep throwing money at it and expecting that it’s going to change things,” she said.
Like Maltais, Pike said tax-based incentives are the best way to encourage economic growth.
“We’ve said all along government isn’t really great at picking winners when it comes to companies,” she said.
“Yes, some of these areas are going to need investments in infrastructure, but at some point you have to sit back and go, ?You can’t have everything.’ This is our money, taxpayers’ dollars and we should be more careful about how we spend it.”
Paul Robichaud, Conservative MLA for Lamèque-Shippagan-Miscou, has suggested in the past the plan was politically motivated to serve as an early election campaign push for northern New Brunswick.
“I hope this is not an empty shell to create the perception they are doing something instead of doing nothing,” he said.
Maltais said he understands that improving infrastructure is important, but he, too, expressed concern it the plan is politically motivated and not necessarily the best route to economic prosperity.
“The only thing I’m scared about is this whole thing is just a big balloon and it will finish with nothing but talk,” Maltais said.
“If we’re serious about creating jobs, offer tax breaks on investments.”
Chaleur Sawmills produces softwood stud lumber for the construction industry, along with rough lumber used to manufacture fencing, pallets, bed frames and packaging. The mill also sells chips, shavings and biomass to local enterprises.
The company has benefited from government investment in the past. In 2009, the province provided the company with a seven year, $1.2-million loan for new equipment.