Depending on who you talk to, ACOA is either a tremendously important catalyst for Atlantic Canada’s economy or a big fat waste of tax dollars.

Donald Savoie, who holds the Canada Research Chair in Public Administration and Governance at the Université de Moncton, is in the former camp. Savoie, known as the father of the Atlantic Canada Opportunities Agency, admits his bias up-front.

“I’ve watched ACOA very closely over the years and I think it’s truly been a success story,” he says. “Take that agency out of the equation and a lot of research and development would not have taken place in Atlantic Canada.”

Kevin Lacey, the Canadian Taxpayers Federation’s Atlantic Canada director, has a philosophical disagreement with the way ACOA works.

“We’re against handing taxpayers’ money to corporations,” he says. “That’s not the way regional development should work.”

He says the money spent on ACOA and similar agencies should be used to cut taxes and improve infrastructure, creating a good environment for businesses to succeed in.

ACOA has been in the news over the past couple of weeks as federal politicians debate whether or not it’s being properly funded. Moncton-Riverview-Dieppe MP Brian Murphy criticized the Conservative government a couple of weeks ago for cutting $64 million from ACOA’s budget, dropping it down to $318 million, from $382 million.

ACOA Minister Keith Ashfield fired back that ACOA had received extra funding over the past two years as part of the federal Economic Action Plan, which provided funding to projects all over the country to stimulate the economy. He says that funding was scheduled to end, so it should come as no surprise to anyone and it isn’t a budget cut.

“Unfortunately, the opposition is trying to spin that in a different direction,” says Ashfield. “They’re absolutely incorrect. You’d think there might be the possibility of an election the way these groups are spinning things.”

Murphy’s response is that ACOA received an average of almost $407 million under the last five years of Liberal rule before the Conservatives were elected to govern, while under Prime Minister Stephen Harper, ACOA received an average of just over $361 million the past five years.

“The ball is in Ashfield’s court to explain that,” says Murphy.

Savoie says all the debate about the budget is just politics and ACOA hasn’t been treated unfairly by the Liberals or Tories. He says one could always argue that more funding would benefit the agency, no matter which government is in power.

“We’re getting into the silly season of politics, as a general election gets closer,” he says.

As ACOA spokesman Richard Gauthier explains, it’s impossible to compare the agency’s budget each year and say if funding has increased or decreased. Government funding programs are constantly starting and finishing and funding changes from year to year, depending on what stage each project is at.

“We have a fluctuation of spending from year to year,” says Gauthier.

The spokesman explains that while ACOA – which has 710 employees in 30 offices around Atlantic Canada – is mostly known for providing funding to businesses, entrepreneurs and researchers, it’s actually involved in four different areas. The first is enterprise development which includes the business development program, the second is trade and investment, which involves such activities as trade missions and helping companies learn about exporting, the third is community economic development, which involves programs such as the Innovative Communities Fund, and the fourth is special initiatives the federal government wants implemented, such as the Economic Action Plan.

The agency’s enterprise development sees it provide loans to businesses or researchers to help them set up, expand or modernize. Gauthier explains they usually partner with the provincial government and the business involved and ACOA staff do their due diligence before getting involved in any project.

All loans are either repayable or provisionally repayable, meaning the loan is for research and development and isn’t repayable until the project is commercially viable.

Gauthier says ACOA is paid back $45 million to $53 million in loan money each year which is then re-invested in other projects. He doesn’t have the exact rate of default, though Ashfield estimates it’s five per cent or less.

“For the most part our collection rate is positive and default rate is not very high,” says the minister, adding that in the business world, the occasional bankruptcy or similar financial difficulty is inevitable on occasion.

Charles Cirtwill, president and CEO for the Atlantic Institute for Market Studies, says he doesn’t know if Atlantic Canada needs a dedicated agency to hand out money, especially when the federal government distributes funding through many other means.

“I prefer if the feds get out of the business of collecting our money and delivering it to specific groups or businesses,” he says. “Do we want hospitals and schools or money for businesses? If I have to choose between a hospital bed when I have a broken leg and $1 million for a business, I know what I’m picking.”

He says just having the agency exist creates financial waste, even if ACOA does have some successes.

Lacey, of the Canadian Taxpayers Federation, says ACOA picks winners and losers when it comes to investing in businesses, so not everyone shares in the success.

“It’s a debate about should we use taxpayers’ money to prop up businesses or to create an environment businesses can thrive in?” he says.

Savoie has heard similar arguments over the years and he doesn’t buy them. He says since ACOA was created in 1987, economic development agencies have popped up all over Canada, based on the ACOA model.

“Every postal code in Canada has an agency based on ACOA,” says the professor. “I would think there are better places to cut.”

Savoie has spoken to many business people in Atlantic Canada over the years who sing the praises of ACOA and the work it’s done.

Ashfield also thinks ACOA serves an important purpose, which is why he made the Atlantic Innovation Fund and Innovative Community Fund permanent funding programs last year, where they were previously term programs.

“That was significant for ACOA because it will allow for long-term commitment planning,” says the minister. “It’s clear the Prime Minister is very supportive of regional development agencies and ACOA.”

He says to grow the economy in Atlantic Canada, investment is required. The goal is for government dollars to help businesses create more jobs, which means more taxes are paid to the government, benefitting the Canadian public.

While Ashfield and Murphy come from different political parties and butt heads on this particular issue, it’s clear both believe strongly in ACOA.

“It’s essential for Atlantic Canada,” says Murphy, of a properly funded agency.

The MP says ACOA should not fall victim to partisan bickering and should be supported by all sides.

“It’s a time of need in an economy beset with issues of sunset industries,” says Murphy.

He doesn’t think Harper is a believer in economic agencies, but says if Ashfield does what’s best for ACOA, that’s a good thing.

“If he brings home more funding for ACOA, I’ll be right behind him, supporting him,” says Murphy.