In Brief: New Brunswick business development agency should look to Nova Scotia’s agency for inspiration. AIMS Executive Vice-President Charles Cirtwill says government departments tend to go for short-term quick hit responses to business needs that often don’t result in long-term sustainable businesses and economic development.
Charles Cirtwill, executive vice-president of the Atlantic Institute for Market Studies, said he would “enthusiastically endorse” the Nova Scotia Business Inc. model as an alternative to Business New Brunswick.
“Government departments tend to say ‘How many jobs can you create and how quick can you do it,'” he said during an interview from Halifax Friday. “They go for short-term quick hit responses to business needs that often don’t result in long-term sustainable businesses and economic development.”
But the decisions of NSBI – Nova Scotia’s business development agency – are driven more by a company’s business plan and overall viability, Cirtwill said.
“They ask you what your product is, who you’re going to sell it to, how much you’re going to sell it for, who your competitors are, where else you’re getting money from, and if there are people in the province with the skills you require,” he said. “The list is longer and more explicit than what most government departments charged with business and economic development use.”
Cirtwill’s comments come after Denis Losier, chairman of the New Brunswick Business Council, called on the province to set up a business development bank like NSBI, which would be run by a board of directors from the private sector and make it easier for businesses to navigate government programs.
“Sometimes the government is like a maze of red tape and political maneuvering,” said Losier during a recent interview.
“This would take away the political process and base decisions on good, sound business proposals,” said Losier, also the chief executive officer of Assumption Life in Moncton.
Still, Nova Scotia’s model is not without flaws and NSBI is not a single-source delivery for everything related to business in Nova Scotia as it should be, Cirtwill said.
“Unfortunately we still have what’s called the industrial expansion fund, which is a fund managed by cabinet,” he says. “What tends to happen is that companies that are turned down by NSBI call up cabinet and get themselves a cheque that way.
“It’s an ugly fund and the number and size of the grants increase as you get closer to an election,” he added. “Like just before Christmas the provincial government added millions to the fund to they’d have a war chest to go into the spring election.”
Despite the loopholes in Nova Scotia’s business development efforts, Cirtwill said he would still highly recommend Business New Brunswick adopt the NSBI model.
“You just have to make sure you don’t leave any back doors open the way Nova Scotia did,” he said.
In addition, Cirtwill said NSBI almost exclusively uses payroll rebates instead of direct loans or loan guarantees.
“So it’s not an upfront promise to give you money,” he said. “You create the jobs and then we cut the cheques.”
Stephen Lund, president and chief executive officer of NSBI, said he’s built a team with strong business acumen to get things done faster while ensuring a healthy level of due diligence.
“It’s business working for business,” he said during a recent interview from Halifax.
“We work with local businesses, we attract companies to the province, we organize trade missions and we’ve got a finance and venture capital wing.”
Lund said that now is the time to be aggressive about business attraction, but added that although the structure of Nova Scotia Business Inc. works well for Nova Scotia, different areas and governments may work better with other approaches.
Business New Brunswick spokesman Ryan Donaghy said the model in place currently works well and is accountable to taxpayers.
“We have a clear process that’s not only accountable but is adaptable to the needs of business and we have qualified staff that are reviewing each application,” he said during a recent interview.
Donaghy said there are three layers of approval for government programs, which may make it longer to approve an application, but ensures accountability and proper oversight.
But Cirtwill said if Business New Brunswick were to adopt the NSBI model, there would still be checks and balances to ensure accountability while at the same time speeding up the process of applications.
“You could still have the annual report presented each year in the legislature so that the public is aware of what they’re up to,” he said.