Halifax – Yesterday, Atlantic Institute for Market Studies (AIMS) president & CEO, Marco Navarro-Genie, was formally appointed to sit on an Equalization Fairness Panel struck by Alberta Wild Rose Party Leader, Brian Jean. The panel will review Canada’s equalization programme and make recommendations to reform it when the current agreement expires in 2019.
“I am honoured to have been asked to be a part of this select group. The timing is right and I agreed to sit on the panel because this is an issue crucial to how Canada ought to function. This is critical for the future of Atlantic Canada. In light of today’s Daewoo announcement in Nova Scotia, it seems clear that we still have much work to do on how industry and provinces in the Atlantic economy generate economic value,” added Navarro-Genie. “I am very much looking forward to participate in this important task.”
Whether it is government subsidies to business or subsidies received by government such as equalization, Navarro-Genie contends the bad habits will be hard to break.
He points to the Nova Scotia example: It has been six years since former premier, Darrell Dexter, handed out a $60 million taxpayer subsidy to South Korean manufacturing giant Daewoo Shipbuilding and Marine Engineering Inc. to protect an estimated 500 jobs.
With the province obtaining a 49 per cent minority stake in the company, former Economic Development Minister, Percy Paris, claimed on March 11, 2010 that “any profits from the province’s 49 per cent share of the company would go into provincial coffers.”
Today, Minister of Business, Mark Furey, announced the idle company has built its last wind turbine and will be ceasing operations in Nova Scotia.
The two questions on the mind of Navarro-Genie is “since the final outcome is the same, why the subsidy, and how much profit did end up in provincial coffers?”
“The announcement today confirms what we have been saying all along: subsidies are often a disincentive to market competition, erode productivity and competitiveness, eventually leaving citizens on the hook for millions of dollars with little value to show in return,” said Navarro-Genie. “We genuinely feel for the people and their families who will be out of work, but need to point out that politically expedient, band-aid economic solutions only delay the inevitable and hurt more people in the end.”